Supplemental Job Displacement, Return to Work Issues

Sunday, August 15, 2004 | 0

A number of people have indicated that they heard the new Supplemental Job Displacement Benefit (voucher) regulations have been finalized by the DWC and will become effective on August 1, 2004. This is not true! The industry is desperate for guidance on how to administer vouchers but the DWC must follow a very structured process in developing and implementing regulations.

Although few people attended the public hearing in San Francisco on July 8th, a great many people submitted written testimony. The DWC must review all documents (and public testimony) submitted by 5:00 PM on July 8, 2004; the Division is still involved in that review process. If any substantive changes are made to the regulations proposed by DWC (and it is highly probable that there will be substantive changes), the revised regulations must be published for a 15 day public review period. If no further changes are made, the regulations are then submitted to the Office of Administrative Law (OAL) for review; OAL has 45 days to complete its review. Once OAL approves the regulations, they are submitted to the Secretary of State for certification and become effective immediately thereafter.

Considering the steps remaining in this process, it is highly improbable that the voucher regulations will be available before mid-September. Employers/insurers are already encountering circumstances where injured employees are clearly eligible for vouchers. Until regulations are available, employers/insurers should provide eligible injured employers with more rather than less information. The proposed audit penalties for voucher notices range from $1000 to $5000; it may help to view your actions from the perspective of a DWC Auditor when deciding what notices, forms, and information to provide injured employees regarding their rights to this benefit.

The 2004 Return-to-Work (RTW) Process When the Supplemental Job Displacement Benefit and the return-to-work process were created in L.C. sections 4658.5 & 4658.6 (via AB 227), the initial defense reaction was, "Great! No more QIW dance!" While it is true that defendants no longer have to have to act affirmatively to determine whether an injured employee is "...precluded from the usual and customary occupation," the statute does require a determination regarding the need for job accommodation. Potential eligibility for the SJDB voucher, the + 15% PD payment provisions of L.C. section 4658(d)(2)(3), and the probable DWC penalties of $1000-$5000 for L.C. section 4658.5 violations place considerable pressure on insurers to promptly determine the appropriate means of returning injured employees to the workplace. FEHA exposure places employers at substantial risk for damages dwarfing workers comp costs and create the potential for employer legal action against insurers who fail to timely discharge their obligations under these Labor Code sections. The importance of the Return-to-Work process has thus increased under AB 227 and SB 899.

Unfortunately, the Legislature used the "last payment of TD" as the point to initiate the mandatory RTW requirements rather than the much more appropriate "P&S date." This creates some real problems for insurers and employers for those cases where the last payment of TD and P&S are not synonymous (perhaps 30% of the total). We will therefore address the "normal" (i.e., cases where the end of TD and P&S are the same date) first and then the "exceptions."

P&S Date and End of TD coincide

For injuries prior to 1/1/2004, claims administrators were required to send a NOPE within 10 days of P&S and an offer of modified or alternative work within 30 days of the NOPE - a maximum period of 40 days. This required a QIW determination by the P&S date and a determination of modified/alternative work availability in no more than 40 days from P&S. For injuries on/after 1/1/2004, the claims administrator must determine the need for job accommodation and (if needed) the availability of modified or alternative work, all within just 30 days of the last payment of TD/P&S. If the claims administrator is going to meet this more stringent requirement (and avoid the probable $1000-$5000 DWC penalties), s/he will need to submit a job description of the U&C position to the treating physician before P&S. It would also be advisable to query the employer regarding the potential availability of permanent modified or alternative work before P&S. Does this remind you of the process for pre-2004 cases? The more things change, the more they seem to remain the same.

This does not mean that claims administrators must obtain job descriptions or analyses for all cases where TTD is paid. As with the QIW determination, the administrator needs to assess the probability that the employee will need a permanent job accommodation. Cases where the injured employee has no PD, has low PD and a relatively "light" job, and those who quickly return to work without difficulty probably do not require job descriptions/analyses for review by a treating physician. And there usually will be no need to obtain a description/analysis of the employee's usual position where the need for permanent job accommodation is obvious (e.g., the warehouse worker who needs a laminectomy). But, wherever there is doubt about the employee's ability to return to work at regular duties, the physician will need a job description/analysis to assist him or her in rendering an opinion on the need for job accommodation. In fact, many physicians may insist on reviewing a job description since this will be their only means of controlling a safe return to work for their patient. The need for a job analysis of the employee's regular job should be determined no later than the 90th day of TTD.

As noted above, the claims administrator should also determine the employer's ability to provide modified or alternative work before P&S. The availability and offer of modified/alternative work affects the employers claim costs as well as their FEHA exposure since the VR benefit no longer exists to shield them from their FEHA liability. Once the employee is P&S and TD ends, several things must then happen during the next 30 days if the employee has PD and needs job accommodation:

1. a Notice of Potential Rights must be sent within 10 days.
2. identify a modified or alternative position within the employee's work restrictions.*
3. obtain a job description of the modified/alternative position - if needed.**
4. offer the modified/alternative position via RU-Form RU-94a within 30 days (note that the return to work date must be within 60 days of the last TD payment, which allows some time for medical review if needed).
5. send the mod/alt job description to the treating physician for review.

* Employers are required to engage in an "interactive process" with employees when developing a modified or alternative position. Claims administrators may wish to suggest that employers obtain information about their obligations by contacting their labor attorney. contacting the Dept. of Fair Housing & Employment, or by reading DFEH pamphlets available at http://www.dfeh.ca.gov/Publications/postersEmp.asp (DFEH 184 or DFEH 208DH).

** There is no need to obtain a job description if the job duties are clearly with work restrictions. However, a job description should be submitted for review where duties and work restrictions are close. The job description can be submitted concurrently with the offer of modified or alternative work.

If the employer agrees, offers of modified or alternative work should contain a statement that "...the employer reserves the right to further modify a position consistent with changes in the employee's work restrictions." Claims administrators should also note that the offer of work (RU-94a) is due within 30 days of the last payment of TD but the RTW date can be delayed up to 60 days from the last payment of TD. Although the earliest possible date is preferred, delays may be necessary where the parties require medical review of the proposed modified or alternative position.

The "Exceptions" When it created L.C. section 4658.5, the Legislature failed to consider that the "last payment of TTD" and P&S often did not occur at the same point in time. There are many cases with numerous "last" payments of TTD because the employee was on and off work on several occasions. Which payment incurs the obligation to send a Notice of Potential Rights and an offer of modified/alternative work? Many injured workers return to "temporary light duty" positions while recovering from their injuries. Since they are still TD, starting the permanent modified/alternative job offer process is premature because there are no permanent work restrictions. What kind of notice is required for these injured employees?

Temporary light duty or transitional work assignments are beneficial for both the employee and the employer so this form of RTW certainly should not be discouraged simply because it does not fit the scheme created by the Legislature. Employees tend to recuperate more quickly and retain important employment benefits while employers can control their claim costs and improve employee morale with effective RTW programs. We would hope that employers become more receptive to RTW programs as they come to recognize the positive impact of such programs on their claim costs as well as potential FEHA exposure. Doctors also need to be educated on the benefits of RTW programs now that the vocational rehabilitation "safety net" no longer exists. The problem for claim administrators is to address documentation requirements sufficient to avoid audit penalties and claims for increases in PD payments pursuant to L.C. section 4658(d).

It does not appear that the DWC regulations will address the many cases that fall into this "never-never" land. The best that a claims administrator can do is send a Notice of Potential Rights and a "delay" letter documenting that the employee is TD so an offer of permanent modified or alternative work is premature, and indicate that the employer will evaluate options for permanent job modification or reassignment, if needed, when the treating physician supplies permanent work restrictions. It would also be advisable for the claims administrator to attach a brief description of the temporary light duty or transitional work duties. This is as close as the administrator can come to a "good faith" approximation of the permanent offer process, considering that there are no permanent work restrictions.

It is understandable that claims administrators want certainty and structure to the RTW/voucher process but the reality is that the process and requirements are new to everyone, including the DWC. We are going to have to learn as we go along and we need to be ready to adjust processes at a moment's notice as structure develops via regulations and - unfortunately - the courts.

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

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