Nixon Administration Workers Comp Federalization – The Landscape Changes in 1972
The Nixon Administration Workers Comp Study of 1972 recommended that the states should continue to administer Workers Compensation individually. Check out this article I wrote last month on the 50-year-old study. The Elvis and President Nixon picture is worth clicking to see an iconic meeting.

What would have happened if total federalization was recommended? The changeover may have taken 20 years for such a leviathan task. Let us look at what areas would have changed due to a changeover to a Federal Workers Comp system.
The changeover would likely have been nightmarish. Agents, adjusters, rating bureaus, and state WC administration and court systems would have had to adapt to the new laws and rules.
Agencies Under Nixon Administration Workers Comp Changes
How would the agents and brokers have functioned under such a suddenly large Workers Comp system? Agents usually must be licensed in their home state and the state of any insured for which they are procuring a policy. A multi-state policy can be procured if the workers’ comp carrier writes business in each of the states.
The territoriality concerns would have been a total mess. Could an agent in New Jersey write coverage for an Oregon-only insured? The development of a Federal License would have taken care of such situations. Agents would have known no boundaries in writing Workers Comp Coverage.
The licensing of agents would have been a big question mark. Would the state require an agent to be licensed in their home state and then also have a federal license?
Would the state and federal systems both require a set of forms that would be filed for each policy procurement? The paperwork requirement increase would have been enormous.
These concerns are but a very few if the Nixon Administration Workers Comp study recommended making workers comp a federal program.
Workers Comp Adjusters
Many workers comp adjusters are licensed in their home state and are then allowed to reciprocate their licenses to other states with an out-of-state license denotation. The licensing of adjusters would not have required too many changes.
The troubling part of the adjuster’s workday would have been tracking and filing the appropriate workers’ compensation indemnity and medical payment benefit forms.
Would each state require the adjuster to file forms with them as usual with another layer of federal forms to file? After handling seven states simultaneously as an adjuster in the 1980s, I can attest to the confusion and workload this would have caused a claims staff.
Which set of rules would the adjuster have followed or a combination of state and federal?
Even having to calculate the workers’ comp benefits and how to process medical bills would have been a huge changeover task. Would the states have individually set benefit rates?
Rating Bureaus Under The Nixon Administration Workers Comp System
The Workers’ Compensation rating bureaus such as NCCI, WCIRB, and independent state rating bureaus are more difficult to assess for Federalization.
The rating bureaus might have stayed the same or have been totally changed when providing insurance rates and Experience Modification Factors.
With NCCI covering 40+ states, it may not have required many changes other than a layer of federal paperwork and figures. The individual state rating bureaus such as the NCRB and WCIRB may have had more difficulty as they may have been required to adapt to or combine figures with another state’s independent rating bureau or NCCI.
Nixon Administration Workers Comp Effect on State Administration and Courts
The Nixon administration’s effect on state administration and courts could be the most complex part of the landscape from 1972.
Would the State WC Courts still hold hearings on would any litigation appear in the Federal Courts? Would the state admin bodies be removed if a federal program was initiated due to the 1972 report?
Would a new Federal Workers Comp court system have to be created to cover all 50 states?
What would happen to the monopolistic states such as Ohio and North Dakota? How would a monopolistic state that administers its own workers comp system without a voluntary marketplace interface with a federal system? Would all the monopolistic states have to open up the states’ Workers Comp system to carriers?
As one can see the decision of the Nixon Administration’s Workers Comp Commission had probably made the right choice – to leave the system as is with a few tweaks.
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