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Employers’ Response to Affordable Care Act May Complicate Workers’ Compensation Claims


Employers’ Response to Affordable Care Act May Complicate Workers’ Compensation Claims

September 16, 2013

The coming implementation of the Patient Protection and Affordable Care Act may result in unintended consequences at the state level in reference to workers’ compensation designs and regulations. 

In New York, for instance, its impact may indirectly lead to a potential for the expansion of claims in workers’ compensation cases involving continuing or permanent disabilities. 

Take a claim for reduced earnings in New York as an example. Absent a complete voluntary withdrawal from the labor market, under Workers’ Compensation Law (WCL) Section 15(5–a), the state’s Worker’s Compensation Board is directed to measure reduced earnings at two-thirds the difference between post-injury earnings and a claimant’s pre-injury average weekly wage. The standard for a reduced-earnings award in New York is not a significant hurdle when there has been a finding of a permanent partial disability. In fact, that finding of a permanent impairment gives rise to the inference that the reduction in earnings is due to the disability. 

The problem arises from the response that larger private entities have had to the coming regulations. While U.S. companies have been hiring at an improved pace, most of the jobs created this year (three out of every four, based on some estimates) are part-time. This is coupled with the move by some employers to reduce the hours of their employees to avoid the coverage mandate for employers. 

Under the ACA, an employee working 30 or more hours per week is considered full-time. As organizations reduce the hours of current workers, the jobs that become most readily available are part-time positions designed to allow employers to maintain their capacity. 

It is easy to see, therefore, the potential complication in the New York State workers’ compensation system. Workers found to have continuing or permanent disabilities will either return to employment that runs the risk of being reduced, or they may find new employment that is more likely to only be part-time. The presumption in a future reduced-earnings claim, however, will be that the claimant’s loss in earnings will be due to their disability, not the continuing economic struggles that have dogged commerce since 2008. 

Employers and their insurance carriers will then be left with the task of overcoming the presumptions saddled on them by law. Case law supports the proposition that general economic conditions may overcome this presumption, but the practical application of that sentiment, in combination with the design of the New York State Workers’ Compensation Law, leaves far too much leeway for a successful reduced-earnings claim under these conditions. 

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