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Nixon Administration Workers Comp Federalization – 1972 Landscape


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.

Picture Chinese leader and Nixon Administration Workers Comp
(c) Public Domain

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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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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