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What If Workers Comp Was Eliminated Tomorrow?

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Workers Comp Was Eliminated – Then What?

What if Workers Comp was eliminated in the Sunshine State or any other state for that matter?

Graphic Map of Florida Workers Comp Was Eliminated USA State Sunshine
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The Florida State Supreme Court will very likely rule on the constitutionality of Workers Comp in the near future.

Let us look at the insurance landscape if all Workers Comp was eliminated in total.

The first thing that would be affected is the current WC claims.  What would happen to those injured employees?   Would the elimination of WC be retroactive?  That would be a fine mess.

The second thing that would probably happen is the carriers would be so heavily affected that some would actually go into receivership very quickly.   The state guaranty funds would then have to pick up the tab.  That would be a heavy liability for the states.

The third thing that would happen is Work Comp would become a litigious liability situation.   Employers would bring lawsuits against their employee or negligence or contributory negligence.

The fourth set of occurrences would involve employees suing their employers when injured as liability cases.  This development and third one would clog court systems for years to come.

The employers would not have liability coverage except possibly under the Employers Liability clauses in the Workers Comp policies.

Any type of network discount for medical treatment would be thrown out as fee schedules would be heavily affected overall.  Workers Comp providers would have to renegotiate all contracts.

What would each of the states’ Workers Comp departments do as most of their jurisdiction and need for employees would be eliminated very quickly.

 

Picture of Workers Comp Was Eliminated Group of Businesspeople
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Would employers have to cover all employees under ERISA coverages similar to the current Opt-out employers in Oklahoma and Texas?

How would Workers Comp claim staffs respond as most of them are not trained in adjusting straight liability claims?

As a former multi-line adjuster, there is a night-and-day difference between a Workers Comp claim and a liability claim.   Most liability claims are much more slowly paid or settled – the nature of the beast.

How about the injured employee and their family?  They, unless they had a side disability policy (AFLAC, etc.), would not receive weekly benefit payments.

In my humble opinion, Florida may get what they ask for – but not in a good way.  If Workers Comp was eliminated, the state insurance system would likely end up in shambles unless the State Legislature comes to the rescue.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt 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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