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Federal Government Shutdown’s Effect on Workers Compensation


Federal Government Shutdown May Have Little Effect

Does the Federal Government shutdown have any effect on WC?   The governmental shutdown was highlighted in a recent article in The Insurance Journal.  I do agree with the author that the shutdown pertains to the federal level and Workers Comp, for the most part, is administered on the state level.

Picture Of Capitol Federal Government Building
Wikipedia Commons – Vcelloho

The ability of the Workers Comp markets to function without federal oversight or intervention may show that most programs are better served on the state level.  The WC markets and systems would be in shambles if they were ever federalized when shutdowns do occur over the long term.

FEMA will even continue to operate the National Flood Insurance Program beyond any normal delays.  A FEMA spokesperson confirmed there is little effect on the Property and Casualty markets.

One area the article alludes to is the federal debt ceiling.  The financial markets could possibly feel experience a very shaky period if there is no agreement on the debt ceiling.   Insurance carriers have experienced better than average returns on their investments over the last year.  Any market or investment downturn would result in the carriers possibly raising rates to offset their short-term investment losses.

Blog On Scrabble Federal Government With Pen And Paper
Wikimedia Commons – Sophie Janotta

The bottom line is the P/C insurance industry including Workers Comp operates very well without federal oversight.   Earlier in this blog, I had pointed out the push for federal licensing of agents, adjusters, and risk managers.  The more areas that are federalized, the more the shutdowns will affect the insurance space in the future.

One future effect of the Affordable Care Act is there may be rationing of healthcare.  Over time, the challenge of providing quick and applicable treatment options to injured workers may be a very tricky affair if the physicians’ offices are already maxed out with patients.

This type of treatment shortage may possibly be countered with more restrictive WC treatment networks where the injured workers would have preference over any other type of insurance.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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