The first Out Front Ideas with Kimberly and Mark webinar of 2017provided our thoughts on the 20 Workers' Compensation Issues toWatch in 2017. What follows is a summary of the initial 10 issuesdiscussed:

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1. Election impact

The U.S. Department of Labor (DOL) under President Obama feltstate workers' compensation systems needed reform, and they wereprepared to recommend minimum benefit standards to the states.President Trump's nominee for Secretary of Labor, Andrew Puzder,has been a vocal opponent of many federal labor regulations. Fornow, any talk of the federal government getting involved in stateworkers' compensation issues seems to be on hold.

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2. Health care reform

Regardless of which side of the aisle we find ourselves on,surveys have shown that most Americans believe the Affordable CareAct is not working as it was originally intended or as well as theywould like.

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While we wait to see how health care reform progresses, we arehopeful that efforts underway to shift from fee-for-service tovalue-based and outcomes-focused care continue to advance and thathealth care suppliers continue to focus on population wellness asmuch as they focus on chronic disease. Kimberly George views thisas the single most important issue to watch in 2017.

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3. OSHA

Another potential impact of the election results is thedirection OSHA may take in 2017 and beyond. In recent years,employers have complained that OSHA was more focused on enforcementthan education and training, noting its shift of resources. RecentOSHA policies such as the publicly accessible online database andrestrictions on post-injury drug testing were met with significantresistance from the employer community. OSHA falls under DOL andalso is likely to have a new direction under the Trumpadministration.

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4. ADA/FMLA

Leave-of-absence regulations under the federal Family andMedical Leave Act (FMLA) have become increasingly more complex overthe past eight years.

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Americans with Disabilities Act (ADA) accommodation requestswere initially related to ergonomics and transitional workaccommodations following an illness or injury. Today, they havebecome more complex, including everything from bringing serviceanimals into the workplace, allergies and noise accommodations toestablishing work-from-home accommodations.

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Related: 9 best practices for return-to-workprograms

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5. Rates and premiums

Workers' compensation market cycles are generally driven bychanges in competition more than changes in exposures. Claims costsover the last 20 years have steadily increased, yet premiums duringthis same period have gone up and down.

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During the January 1 renewal cycle, rates trended flat orslightly down compared to expiring premiums. Some problem statessaw higher rates, including California, New York, Illinois andFlorida. The declining rates compared to increasing claims costshave caused A.M. Best, Fitch and others to issue a negative outlookon workers' compensation. This hyper-competitive market cycle isexpected to end soon as the new entrants into the marketplace startto see the long-tail losses from their business hitting thebooks.

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Related: California taxi company reaches settlement forfailure to carry workers' compensation insurance

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6. Workers' compensation long-tailexposure

Workers' compensation is a challenge for employers and carriersdue to the long-tail claims, that is, premiums collected today mustcover losses for years to come. It has an impact on both carriersand employers in the cost of insurance today and futurereserves. 

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The biggest drivers are advances in medical science thatincrease life expectancies, which in turn increase the exposuresfor lifetime indemnity and medical benefits. In addition, new drugsand treatments cost more than what they are replacing, especiallywith the cost difference between brand-name drugs and genericmedication. Prosthetics are so much more advanced today than theywere 10 years ago, but they also cost significantly more.

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7. State legislative agendas

We expect to see new workers' compensation legislationestablished in at least four states during 2017:

  • Florida. Last year, the Florida Supreme Courttossed out multiple elements of their workers' compensationstatutes as unconstitutional, which caused a significant increasein claims costs and premium rates. There will be bills introducedto address these issues.
  • Illinois. In 2016 and 2017, Illinois Gov.Bruce Rauner has made workers' compensation reform a key element inhis job-growth agenda. He is calling for medical fee schedulereductions, higher causation standards for conditions to be foundcompensable, and legislation to reverse court decisions that haveexpanded benefits.
  • New York. The state's reform efforts stalledlast year. Employers are pushing for limits on the time for anemployee to reach maximum medical improvement, which triggers the10-year cap on indemnity benefits.
  • California. Every year the legislature passesbills to reverse recent reforms, and with few exceptions Gov. JerryBrown has vetoed those bills. There will inevitably be more reformbills introduced in 2017, so we'll see what those bills address andwhether the Governor will approve any of them.

Options to Workers' Compensation. In 2016, wesaw efforts to push for options to workers' compensation stall.Legislation in Tennessee and South Carolina did not move forward,and the Oklahoma Option was found unconstitutional by the stateSupreme Court.

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8. Treatment guidelines

Workers' compensation stakeholders have become familiar withmedical treatment and return-to-work guidelines, along withevidence-based medicine. Payers and managed-care suppliers workdiligently to embed guidelines in their systems for nurses andclaims adjusters to improve efficiency with access to the guidesand workflow for their colleagues.

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States have implemented a variety of guideline solutions, whichinclude creating unique formularies and treatment guides and alsoadopting industry-available workers' compensation guidelines. Thelack of guideline consensus across stakeholders includingphysicians, regulators, payers and suppliers is an ongoingchallenge to the system.

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Related: Former NFL players push for legal pot as painkilleralternative

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9. Constitutional challenges to workers'compensation

In 2016, elements of the workers' compensation statutes in fivestates were found to be unconstitutional by each state's respectiveSupreme Court, including the following:

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10. Mental health

Mental health is among the top three to five reasons forshort-term disability absences across white- and blue-collarworkers, and across industries. More than ever employers understandthat lack of mental health care impacts productivity, regardless ofhow an injury or illness occurred.

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Ways in which employers are addressing mental health andworkers' compensation include promoting employee assistanceprograms and behavioral health programs for employees regardless ofhow an injury or illness develops.

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Related: New research shows impact of underlying conditionson workers' compensation claims

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