The Supplemental Job Displacement Benefit Process - 1

Saturday, May 22, 2004 | 0

The Supplemental Job Displacement Benefit (voucher) Process

by Alan Leno

The Supplemental Job Displacement Benefit (voucher) was intended to replace vocational rehabilitation as the vehicle by which disabled injured workers could prepare themselves for employment if their employers were unable (or unwilling) to provide medically appropriate work. Unfortunately, legislators did not discuss return to work and training process needs with the professionals who must make it work. The result is a benefit requirement that confuses and confounds employers and insurers and is unlikely to provide significant assistance to injured workers who need it. In these next two articles, we will examine the voucher process and some of its inherent problems (discussion of problem areas are in italicized text).

First we need to identify the basic provisions (and requirements) for the voucher. L.C. sections 4658.5 & 4658.6 provide for the following:

* An injured employee is potentially entitled to a non-transferable voucher if s/he has a PD rating from 1-99%.
* The value of the voucher ranges from $4,000 to $10,000 and is based on the PD award (or C&R).
* Injured employees who are expected to have PD are due a Notice of (potential) Rights within 10 days of the termination of temporary disability (TD) payments.
* An offer of medically appropriate work must be sent to the injured employee within 30 days of the termination of TD payments.
* The employee must be provided a return to work date that is within 60 days of the termination of TD payments.
* An employee is entitled to a voucher if the employer fails to provide a timely offer of medically appropriate work OR fails to provide timely notice.
* An employer is not liable for a voucher if it makes a timely offer of modified or alternative work, expected to last at least one year, to an employee in need of job modification.
* The voucher may only be used for retraining or skills enhancement at approved training facilities (see CCR section 10126(k) for approving agencies).
* Fees for the services of a vocational counselor may not exceed 10% of the voucher's value.

Obstacles in the Process

If all workers' comp indemnity claims could be handled identically, doctors reported promptly, job duties and work restrictions were clear, employers responded promptly, etc., designing a system to meet the preceding requirements would be relatively easy. TD stops, the treating doctor provides ratable work restrictions, and a Notice of Rights is sent to the claimant within 10 days. The employer responds promptly to the claims examiner's inquiry regarding the availability of modified or alternative work. If work is available, the employer provides a list of job duties and the treating doctor responds promptly where clarification is required. An offer of medically appropriate work is sent to the employee and s/he accepts and returns to work within 60 days OR s/he rejects the offer or fails to respond and the issue is closed. If no work is available, the employee is notified that s/he is eligible for a voucher and the voucher will be mailed within 30 days of a PD award or C&R. Simple. Except that cases are not identical and many do not proceed smoothly through the system. Let's consider the requirements that present compliance problems for insurers and employers:

An injured employee is potentially entitled to a voucher if s/he has a PD rating from 1-99%. The claims examiner isn't always going to know if the employee will have, or is likely to have, permanent disability at the point TD ends. Many injured workers return to work while still treating for their injury. Some return to their regular duties while others are assigned to temporary light duty positions or are provided temporary modified work. Some of these injured workers will fully recover (no PD) while many others will have PD. The examiner can incur a notice obligation (i.e., a Notice of Rights must be sent within 10 days of the last TD payment) without knowing the notice is actually due.

Injured employees who are expected to have PD are due a Notice of (potential) Rights within 10 days of the termination of temporary disability (TD) payments. See above. In a practical sense, it will often be difficult for a claims examiner to know whether a Notice of Rights is truly due the injured employee. Many doctors do not respond to inquiries within this time frame so examiners will often be beyond the 10 day time frame when they received their first notice that TD should end.

Employers/Insurers are faced with several possible solutions, none of which is especially attractive. One possible solution is simply to send a Notice of Rights on all indemnity cases. This solves the notice problem but may make it more difficult to identify those cases where an investigation is necessary to identify the availability of modified or alternative work. Another alternative is to tie the Notice of Rights to any "last payment of TD." That means that a lot of "extra" letters will go out (many injured workers are on and off TD several times) and each letter must be sent via certified mail - an extra expense when the goal is to reduce the cost of workers' compensation. The Notice could be tied to the first PD letter but this would almost guarantee that the Notice is late - unfortunate since this is probably the most efficient alternative. The problem with this requirement, as with the requirement for modified/alternative work offers, is that the Legislature used the end of TD as the initiating point for the Notice rather than knowledge of P&S, which would have been more appropriate and workable.

An offer of medically appropriate work must be sent to the injured employee within 30 days of the termination of TD payments. As with the Notice of Rights, this requirement should have been associated with date of knowledge of a P&S determination, not the end of TD. To make matters worse, this provision requires knowledge of the employee's work restrictions, which are rarely available within 30 days of the end of TD. During this same 30 day period, the examiner must also contact the employer to determine if modified work is available AND accumulate the necessary forms and get them in the mail to the employee. We should assume that the offer must include the job title, a list of duties, the wages and hours worked, date the job starts, etc. (see Jack in the Box v. WCAB (Morrison)(2003) 68 CCC 9). Injured workers still have due process rights so evaluating available work may often include completion of a job description.

An additional problem with this requirement is that the statute requires the employee to respond to the offer within the same 30 day window the employer has to make an offer. This creates a situation where the employee would be required to respond the same day the offer is made if the employer doesn't send the offer until day 30. We can hope the DWC resolves this potential absurdity through regulation.

This requirement may force insurers and employers to work more closely with employers to anticipate the need for modified and alternative work (it is unclear if there will be a regulatory provision for "delays" while the defendant obtains necessary information from employers and doctors). Doctors will need to be more responsive as well - perhaps the new treatment protocols will encourage timeliness (we can hope). To facilitate the return to work process, employers and carriers may find it useful to develop structured relationships with vocational counselors who have demonstrated skills in job descriptions/analyses and the return to work process.

The employee must be provided a return to work date that is within 60 days of the termination of TD payments. The intent of this requirement is to assure a timely return to work for the employee; to be valid, the employer's offer must allow the employee to return to work within 60 days of the last TD Payment. If the employer can meeting the preceding 30 day requirement, meeting this requirement will be simple - unless the employee is a seasonal worker.

This problem has been presented to the DWC; perhaps the DWC can address the seasonal work problem in its regulations.

An employee is entitled to a voucher if the employer fails to provide a timely offer of medically appropriate work OR fails to provide timely notice. The statute appears to make an employee eligible for a voucher if the employer fails to meet the preceding time requirements, even where the employee actually returns to work in a regular, modified, or alternative capacity. As noted, the employer may not control the circumstances that result in the failure to meet timeliness requirements.

It seems inequitable to penalize the employer for not providing medically appropriate work when it has, in fact, done so and for failing to meet time requirements in a process it does not entirely control. On the other hand, there should be incentives (and costs) built into the process to insure timely offers of work to injured employees. As with the previous points, this is an area begging for correction with the Legislature's next "clean-up" effort.

The value of the voucher ranges from $4,000 to $10,000 and is based on the PD award (or C&R). Most workers' comp claims are settled by C&R for a dollar amount without a PD rate specified. C&Rs for dates of injury on/after 1/1/2004 will have to specify a PD rating (if the employee was not timely offered medically appropriate work) in order to determine the value of the employee's voucher. This is one more point of contention in an already difficult negotiation.

Compliance will clearly be difficult for employers and insurers, particularly now when there are no regulations to provide guidance. Past VR reform attempts generally didn't require substantial attention for a year or so after their effective dates. Even the VR provisions that did take effect soon after the effective date (such as the 90 day QRR requirement in the 1989 reform) didn't require substantial adjustments. The voucher is an entirely different benefit with entirely new requirements. There are already thousands of injured workers potentially due a Notice of Rights and employers/insurers have no idea what constitutes a viable Notice, when it is due, or how the notice process that follows should work.

The next article will review the actual process.

Contributed by vocational rehabilitation expert Allan Leno, Leno & Associates, (818) 370-8859, allanleno@leno-assoc.com.

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