May 2013 - Issue 15

Safeguarding Children Training Workshop

eDiscovery in a Cloud-Based World

Employer Wellness Programs Need Guidance to Avoid Discrimination

Panel Strikes Down Law on Disruption of Council Meetings

Setting the Standards for use of Personal Protective Equipment

Mechanical Breakdown Coverage (formerly: Boiler and Machinery Coverage)

Legislative Update

SB 863: Shortening the Life of Claims?

News: Worthy

Safeguarding Children Training Workshop

by Catherine Sloan, Senior Training Specialist

Parents and guardians of minors put tremendous trust in those authorized to care for and safeguard their children while they are participants in agency programs. What are the warning signs of sexual predators and how do you handle suspicious or unusual behavior? What should you look for when hiring staff that work with children? Should you screen independent contractors or volunteers any differently than you screen prospective employees? 

This new training workshop offered by the California JPIA, will present basic principles and procedures for recreation staff to help mitigate exposures arising from predators in the midst. Learn how the California Public Resources Code §5164 and California Penal Code §11143 address the process of hiring employees and the use of volunteers who have supervisory or disciplinary authority over a minor.

Topics will include: 
• Fundamentals for safeguarding minors in your care
• Basic procedures and programs for activities that include children 
• The importance of background checks and the best approach to obtaining them 
• Behavioral patterns, attitudes, techniques, and strategies of predators
• Afterschool programs vs. childcare 
• Insurance requirements
• Emerging trends

John Chadwell, Regional Director with ehs International, Inc., will present the Safeguarding Children training workshop. Chadwell is an expert investigator with over 15 years of experience in workplace violence, internal/external theft and fraud, embezzlement, forensics, and harassment. He has testified as an expert witness and has been a consultant to organizations in the areas of loss prevention, employee conduct evaluations, threat assessments, site assessments, interrogations, and training. 

The Safeguarding Children workshop will be offered to member agencies on Tuesday, June 4 at the California JPIA campus in La Palma. The two-hour training workshop will be presented at 9:00 a.m. and again at 1:00 p.m. For additional information or to register for the Safeguarding Children workshop, visit the California JPIA Resource Center. You will need to log in with your username and password.



eDiscovery in a Cloud-Based World

Legal Matters

eDiscovery in a Cloud-Based World

by Scott J. Grossberg, Esq.
Cihigoyenetche, Grossberg & Clouse

Cloud computing is where we all seem to be headed. For storage and syncing, there are certainly mainstream services like Dropbox, SugarSync, SkyDrive, Google Drive, Box, SpiderOak, and other similar third party offerings. And just recently BitTorrent Labs put forth an alpha release of its new sync and share option (called BitTorrent Sync) which the publisher claims is a “private” and “secure” way to share information. For others, the cloud provides the freedom to use cloud-based vendor sites like Facebook, Twitter, Amazon, PayPal, Salesforce, QuickBooks, and a dizzying and ever-growing array of similar services.

While the use of the “cloud” certainly makes data archiving, collaboration, and paperless storage cost-effective and easy, everyone should take the time to consider what would happen if you or your cloud service provider received a subpoena or other legally sufficient court order to turn over your cloud-based information. From the research I have seen, it appears less than 20% of cloud service users have an eDiscovery plan in place. And many of the organizations I have consulted with don’t even know if they have an eDiscovery plan in the first place. These failings will ultimately lead to the inability to readily access requested information in a timely and cost-effective manner and could lead to catastrophic results.

Some other authors have proposed that cloud users need to carefully research, delineate, and in some cases revise service level agreements with cloud vendors to address everything from preservation of data to admissibility in court. While the use of negotiated service level agreements makes sense in a vacuum and on a hypothetical basis, let’s get real. The fact remains that most organizations are not going to be able to negotiate on a case-by-case basis with the likes of Google as to eDiscovery issues. Likewise, most organizations are not going to host their own private cloud server for a variety of economic and ease-of-use reasons. Cloud users, then, need to assume that at some point in time the privacy of their data will be compromised. In other words, it’s not a matter of “if” you will have to turn over information to someone, it’s a matter of “when” that will happen.

With the massive push towards tablet computing, Dropbox, as an example, is gaining in popularity and ease of use. In fact, most apps are now built around automatic synchronization with Dropbox! Organizations I work with are, at the very least, using Dropbox for agenda and other document handling between iOS devices. Most of those same organizations, however, don’t realize that, although Dropbox touts its security features, those protections are in place to prevent hacking from the outside - not to prevent Dropbox, itself, from giving up of information in response to a subpoena. So there is no doubt in your mind where this is all headed, here is the current privacy posting from Dropbox on that topic: “Compliance with Laws and Law Enforcement Requests; Protection of Dropbox's Rights. We may disclose to parties outside Dropbox files stored in your Dropbox and information about you that we collect when we have a good faith belief that disclosure is reasonably necessary to (a) comply with a law, regulation or compulsory legal request; (b) protect the safety of any person from death or serious bodily injury; (c) prevent fraud or abuse of Dropbox or its users; or (d) to protect Dropbox’s property rights. If we provide your Dropbox files to a law enforcement agency as set forth above, we will remove Dropbox’s encryption from the files before providing them to law enforcement. However, Dropbox will not be able to decrypt any files that you encrypted prior to storing them on Dropbox.”

(As a side note: I highly recommend activating what is called “two-step” or “two-factor” authentication when using the cloud. This takes security in cloud computing to the next level by requiring a user to provide two authentication factors/data pieces that are then used by the provider to prevent unauthorized access and/or identity theft.)

For those of you who want to use the cloud and are not in a position to negotiate a personalized service level agreement (that’s most of you), here is a massively powerful yet easy to employ tip to which Dropbox itself alludes - use encryption programs for your cloud-based data. Continuing with our Dropbox example, there are products like Viivo (http://viivo.com) and BoxCryptor (http://boxcryptor.com) that will readily accomplish this goal. These types of products permit a cloud user to create encrypted cloud-based folders/data. If Dropbox, for example, were to be served with a subpoena, then there is likely not much that can be done with the encrypted data by the receiving party without a court order that also mandates the requesting party be given the encryption key. Voila! You now have an added layer of protection. And, both Viivo and BoxCryptor offer cross-platform and multi-device solutions. Viivo is free for personal and commercial use. BoxCryptor is free for non-commercial use.

Finally, as organizations develop their technology policies, it remains a hard fact that proper training of employees and consistency of policy enforcement is the day-to-day challenge. By creating a heightened sensitivity to cloud storage matters, some of the concerns over eDiscovery can be mitigated.



Legal Matters

Employer Wellness Programs Need Guidance to Avoid Discrimination

Reprinted from the U.S. Equal Employment Opportunity Commission – May 8, 2013

Panel of Experts Tells EEOC of Need to Clarify Interplay Between Programs, Anti-Discrimination Laws

Wellness programs are an increasingly common feature of employee benefits programs, and guidance is needed to avoid violations of federal equal employment opportunity laws, a panel of experts representing business, advocacy groups and providers told the Equal Employment Opportunity Commission (EEOC) at a meeting held today.

"We appreciate the valuable insights and diverse perspectives provided by today's panelists," said EEOC Chair Jacqueline A. Berrien. "There has been broad, bipartisan support for the expanded use of wellness programs to reduce health insurance and healthcare costs, but today's meeting underscored the importance of insuring that those programs are designed and implemented in a manner that is consistent with federal equal employment opportunity laws."

Commissioner Victoria A. Lipnic added, "As wellness programs become more prevalent, fostered in part by the signature health care initiative of the Administration, we can be certain that their use will present more questions with respect to the federal laws we enforce. I believe we have a responsibility where possible to let stakeholders know the Commission's position on these important questions."

A majority of employers now offer some sort of wellness program: 94 percent of employers with over 200 workers, and 63 percent of smaller ones, according to Karen Pollitz of the Kaiser Family Foundation, which researches issues relating to health care. She added that many of these programs offer some sort of financial incentive for participation, which can range from gift cards to higher employer contributions for insurance premiums, or penalties like additional surcharges to employees for health insurance.

The most common intersection of these programs and the statutes EEOC enforces occurs when the programs require medical exams or ask disability-related questions, both of which would ordinarily give rise to a violation of the Americans with Disabilities Act (ADA), EEOC Acting Associate Legal Counsel Christopher Kuczynski told the Commission. He explained that, while the ADA allows employers to ask for medical information in connection with voluntary wellness programs, the meaning of "voluntary" merits further clarification by the Commission.

Some panelists also argued that EEOC's regulations under the Genetic Information Nondiscrimination Act (GINA)-which prohibits acquiring genetic information including family medical history--should provide guidance on whether spouses of employees may be asked for health information in the context of wellness programs.

Speaking on behalf of the Consortium of Citizens with Disabilities (CCD), Jennifer Mathis warned against the use of penalties or monetary incentives for participation in wellness programs. Citing the high rate of unemployment for people with disabilities, Mathis told the Commission that the CCD "is concerned that employer-based health programs which penalize people with disabilities for not being as 'well' as others-and for failing to disclose disability-related information the ADA permits them to keep confidential-make it even more difficult for individuals with disabilities to obtain employment on fair and equal terms."

Other panelists, including Leslie Silverman, a former EEOC Commissioner now a lawyer representing large employers, urged the Commission to provide guidance on the application of the ADA and GINA to wellness programs in order to facilitate employer compliance and clarify the relationship between the ADA, GINA, the Health Information Portability and Accountability Act (HIPPA) and the Affordable Care Act (ACA) provisions on incentives and penalties.

While most of the panelists discussed wellness programs in the context of ADA or GINA violations, Judith Lichtman of the National Partnership for Women & Families, warned of potential violations of Title VII of the Civil Rights Act's prohibitions on race, sex, and national origin discrimination, and the Age Discrimination in Employment Act's (ADEA) prohibitions on discrimination against people 40 and older.

Lichtman noted that women tend to have more health problems than men and older people tend to have more problems than the young. Many health conditions, such as obesity, diabetes and hypertension, disproportionately affect members of racial minorities. Punitive measures for failing to meet certain biometric markers therefore could have an unjustified disparate impact on certain groups, in violation of both Title VII and the ADEA, she told the Commission.

The Commission will hold open the Wellness Commission meeting record for 15 days, and invites members of the public, to submit written comments on any issues or matters discussed at the meeting. Public comments may be mailed to Commission Meeting, EEOC Executive Officer, 131 M Street, N.E., Washington, D.C. 20507, or emailed to: Commissionmeetingcomments@eeoc.gov.

Comments submitted by the public will be made available to members of the Commission and to Commission staff working on the matters discussed at the meeting. In addition, those comments may be publicly disclosed on the EEOC's public website, in response to Freedom of Information Act requests, or in the Commission's library. Persons submitting comments in response to this solicitation are consenting to their use and consideration by the Commission and to their public dissemination. Accordingly, they should not include any information that persons would not want made public, such as home address, telephone number, etc. Note that when comments are submitted by e-mail, the sender's e-mail address automatically appears on the message.

The EEOC enforces federal laws prohibiting discrimination in employment. More information about the EEOC, including panelists' statements, biographies and a transcript of this meeting, can be found at www.eeoc.gov.



 

The Court Report

Panel Strikes Down Law on Disruption of Council Meetings

Reprinted from the Metropolitan News-Enterprise - May 6, 2013
by Kenneth Ofgang

A city ordinance regarding misconduct by members of the public at city council meetings is invalid on its face because it punishes conduct beyond actual disruptions, the Ninth U.S. Circuit Court of Appeals ruled Friday.

On rehearing Friday, the panel departed from its ruling last September that only a portion of Costa Mesa Municipal Code Sec. 2-61 was invalid, and that that part was severable. But it again affirmed a judgment in favor of city officials, saying they cannot be held liable for violating Benito Acosta’s civil rights because there is undisputed evidence that he was actually disrupting a meeting when he was arrested under the ordinance.

Acosta is an immigrants’ rights activist who also uses the name Coyotl Tezcatlipoca. At a 2006 council meeting, he addressed the council during the public comment period, protesting a recent agreement allowing city police to enforce immigration laws under the authority of Immigration and Customs Enforcement. 

Now Assemblyman
When he called on his supporters to stand up, then-Mayor Allan Mansoor—now a Republican assemblyman—said “No, we’re not going to do that.” Acosta, however, repeated three times “Do it,” and about 20 to 30 people stood and some applauded. 

Mansoor then declared a recess, but Acosta remained at the podium, refusing police instructions to step away and claiming he was being deprived of his right to speak for three minutes under the public comment procedures. Police then arrested him for violation of Sec. 2-61, making it a misdemeanor for members of the public who speak at council meetings to engage in “disorderly, insolent, or disruptive behavior.” 

He later testified that his face and legs were bruised during the altercation.

‘Racist Pigs’
Acosta—who had called council members “racist pigs,” preceded by an expletive, at a previous meeting—pled 11 causes of action against the city, Mansoor, and the police chief and individual officers. Among other things, he challenged the ordinance facially and as applied, and asked for damages for an unreasonable search and seizure in connection with his arrest. 

Acosta noted that a half hour before he spoke, Jim Gilchrist, a former congressional candidate and one of the founders of the Minuteman Project, often described as a vigilante group opposed to illegal immigration, had encouraged his supporters to rise at the end of his speech. The city responded that Gilchrist discouraged applause, and that the mayor allowed the action solely so that those standing could indicate their position without taking up time speaking. 

Judge David O. Carter of the U.S. District Court for the Central District of California dismissed in part, holding that the ordinance was constitutional on its face. He subsequently granted partial summary judgment that the individual officers had qualified immunity in connection with Acosta’s arrest and removal from the meeting room. 

The remaining claims were submitted to a jury, which found in favor of the defendants. 

Partial Invalidity
The Ninth Circuit, in its original ruling, found the ordinance partially invalid on its face, but otherwise affirmed. The panel—Judges Richard C. Tallman and N. Randy Smith and visiting District Judge Dee V. Benson of the District of Utah—said the term “insolent” was too vague to place a speaker on notice of what conduct was prohibited. 

But the judges upheld the remainder of the ordinance and said that Acosta’s arrest was lawful. They noted that his own evidence, including a videotape of the meeting, showed him at the podium, continuing to exhort his followers, after the council recessed and officers asked him to leave. 

In February, however, the judges withdrew that opinion and granted rehearing, and Friday they found more fault with the ordinance than they had originally. 

Protected Speech
They said it unnecessarily swept a substantial amount of non-disruptive, protected speech within its prohibitions, and that the terms “personal, impertinent, profane, insolent” in describing the prohibited behavior were vague and overbroad. 

“Because §2-61 fails to limit proscribed activity to only actual disturbances, we reverse the district court’s constitutionality ruling and find the statute facially invalid,” the court said in a per curiam opinion. “Moreover, since the unconstitutional portions of the ordinance cannot be severed from the remainder of the section, we invalidate the entire section. Nevertheless, §2-61 was constitutionally applied to Acosta, because the jury implicitly found that his behavior actually disrupted the Council meeting.” 

The Orange County Register noted after the trial that the city had spent more than $522,000 defending itself, as well as some $40,000 in a failed attempt to prosecute Acosta. 

Copyright 2013, Metropolitan News Company



Personal Protective Equipment

Risk Solutions

Setting the Standards for use of Personal Protective Equipment

by Maria Galvan, Risk Manager

Personal Protective Equipment (PPE) reduces employee exposure to hazards when engineering and administrative controls are not feasible or effective in reducing exposures to acceptable levels. PPE includes eye and face protection, foot protection, head protection, and hand protection. California Code of Regulations, Title 8, Section 3380, Personal Protective Devices requires employers to do the following: 

1. Identify the tasks employees perform. For those where there are or likely to be hazards, perform a Job Hazard Analysis (JHA) to identify PPE necessary to protect employees from the identified hazards.

2. Select and have each affected employee use the types of PPE that will protect the affected employee from the hazards identified in the JHA.

3. Communicate selection decisions to each affected employee.

4. Select PPE that properly fits each affected employee.

5. Verify that the required workplace hazard assessment has been performed through a written certification that identifies the following:
     - Workplace evaluated
     - The person certifying that the evaluation has been performed
     - The date(s) of the hazard assessment
     - Identify the document as a certification of the hazard assessment

6. Provide training to each employee who is required to use PPE. Employees should be trained on:
     - When PPE is necessary
     - What PPE is necessary
     - How to properly don, doff, adjust, and wear PPE
     - The limitations of the PPE
     - The proper care, maintenance, useful life and disposal of the PPE

Despite agencies’ proactive efforts, employee injuries connected to not wearing required and employer provided PPE are all too common. Employee behavior and safety performance depends on the effectiveness of communicating the personal consequences of not utilizing or not properly using PPE while on the job. “Wear your PPE because it says so in the safety manual” may not necessarily lead to employees being sold on its importance. Suggestions include:

1. Set an example. In addition to reinforcing the need to wear PPE on a regular basis, supervisors need to show employees that they also use PPE in the workplace. 

2. Allow no exceptions. Establish and consistently enforce a policy requiring the use of assigned PPE. Employees should be aware of the rules and consequences of noncompliance.

3. Discuss and Inform. Talk about PPE in safety meetings. Train employees regularly on the proper fit and care of PPE. Request employee input. Listen to complaints and reasons for noncompliance. Make employees aware by posting signs indicating what type of PPE is required in work areas.

4. Discipline. Unfortunately, discipline be necessary under certain conditions. If choosing to discipline, it is critical to discipline in a consistent manner. Employee morale may be diminished or a supervisor may lose credibility if they are perceived as being inconsistent with disciplinary action. Discipline according to your agency’s written policy and/or union MOU.

5. Provide examples. Demonstrate how the proper selection, use, care, and maintenance of PPE can prevent workplace injuries and save lives. Provide statistics and examples of accidents that have occurred as a result of workers not wearing required PPE. 

The Authority has templates available through the Resource Center that incorporate PPE into various safety programs. Samples include a Bloodborne Pathogens Exposure Control Plan, Hearing Conservation Program, Injury and Illness Prevention Program, and a Respirator Policy. 

If you have questions about PPE, contact your designated Risk Manager. Information is also available at:

https://www.dir.ca.gov/title8/3380.html
http://www.osha.gov/dte/library/ppe_assessment/ppe_assessment.html
http://www.osha.gov/Publications/osha3151.html


Coverage Matters

Mechanical Breakdown Coverage (formerly: Boiler and Machinery Coverage)

by Jim Thyden, Insurance Programs Manager

“We don’t have any boilers and there isn’t any machinery here.” Do you say this when the Property Insurance Program renewal comes around every year? There are reasons you should seriously consider purchasing this coverage, if you don’t already do so.

The Property Insurance Program has several components, including coverage for structures and contents, vehicles, and other property owned or in the care, custody, or control of the member. However, some losses are not covered by the “all risk” coverage and extra coverage must be purchased. Many members know that earthquake losses are not covered by the “all risk” coverage, but some are not aware that the following losses are also not covered:

• Steam explosions to generators, engines, building system piping, and pressure vessels.
• Mechanical breakdown of air conditioning systems, refrigeration units, and blowers.
• Electric arcing of circuit breakers, transformers, and electrical distribution panels.

This is where the Mechanical Breakdown Coverage comes in. For the cost of $.005 per $100 of value (50 cents for a $10,000 piece of equipment), members are provided coverage for losses to property they own or operate, as well as liability for certain losses and legal expenses to property of others in the member’s care, custody, or control. Furthermore, when there is a covered loss, the member is also covered if a stream of revenue is lost, as well as spoilage (usually spoiled food), ammonia leaks or spills, and the cost to obtain replacement utility service when necessary.

One of the most used benefits of this coverage is the board-certified risk consultants who perform state required inspections on covered vessels. Appointments are made directly with the member and your designated risk manager will follow-up if any issues are identified.

Following is information about Mechanical Breakdown Coverage. For questions about the coverage, contact Gail White at Alliant Insurance at gwhite@alliant.com or (949) 660-8127.



Mechanical Breakdown Coverage (formerly: Boiler and Machinery) and Why You May Need It


“What do you mean it's not covered…?”

The "all risk" property coverage does not cover certain kinds of losses. Some of these uncovered losses can damage your equipment and cause expensive equipment replacement, clean-up expenses, delay in the delivery of services, or even interrupt cash flow. The following perils are not covered in the Authority’s all risk property coverage, however Machinery Breakdown Coverage provides coverage for such events. 

• Steam Explosion – occurring in the following building machinery:
     o Boilers
     o Engines
     o Electrical or gas Generators
     o Building System Piping 
     o Rotating Machinery
     o Pressure Vessels 

• Mechanical Breakdown - most often occurring in machinery such as:
     o Air Conditioning Systems
     o Blowers
     o Motors/Pumps
     o Refrigeration Units

• Electric Arcing - typically occurring in the following mechanical apparatus:
     o Circuit Breakers
     o Electrical Distribution Panels
     o Motors/Generators
     o Transformer

Members who purchase Machinery Breakdown Coverage are protected for:
     o Losses due to steam explosion, mechanical breakdown or electric arcing to property you own or operate
     o Liability for covered losses to property of others in your care, custody or control
     o Repair or replacement cost for damaged property
     o Legal expenses incurred for your defense against a claim or suit alleging liability under the policy

Machinery breakdown losses can go beyond the repair or replacement cost of damaged equipment. This coverage is enhanced to include coverage for indirect losses such as:
     o Business Interruption (if you have a stream of revenue tied to the damaged equipment and that revenue is interrupted because of the loss) 
     o Extra Expense (if you incur expense while waiting for repair of the damaged equipment)
     o Spoilage (organic inventory stored in refrigerator units lost due to equipment breakdown) 
     o Ammonia contamination (leaks or spills of ammonia that require special handling for clean-up and/or repair)
     o Utility interruption (Your expense to obtain replacement utility service if your normal service is interrupted due to damage) 

Loss Control
Board-certified risk consultants perform required jurisdictional inspections on covered vessels, conduct surveys and will perform accident investigations to provide ongoing loss control assistance. Services also include infrared testing, vibration and oil analysis, as well as other predictive tests.

Claims
The insurance carrier’s claims unit handles all machinery breakdown losses. When a loss occurs, the insurer will provide a claim specialist to work with you to get your machinery, or other equipment, up and running as quickly as possible.

Could one of these losses be yours…?
• An air conditioning system shorts out, damaging the drive motor and creating carbon that mixes with the freon in the system 
     o Total cost to repair exceeds $300,000
• A power surge arcing in the main electrical panel in the basement at City Hall 
     o Cost to repair: $350,000 (damage to unit and surrounding area)
• A wastewater treatment plant digester “burps” and the sealed cap and its joints are damaged 
     o Total cost to repair: $800,000
• Incoming power automatic transfer switch arcs, following a utility company power outage, requiring its replacement 
     o Replacement cost : $150,000
• Building heating boiler loses feedwater, resulting in dry-firing of boiler, leading to destruction of internals of boiler, including all boiler tubes and tubesheets 
     o Cost of re-tube: $200,000 
• Mechanical breakdown of emergency generator, during either weekly testing, or during a power outage, resulting in significant repairs and overhaul of engine components 
     o Cost of repairs: $150,000



Legislative Update

Legislative Update

by Jeff Rush, Workers’ Compensation Program Manager

On Wednesday, April 10, the California Association of Joint Powers Authorities (CAJPA) hosted its annual Legislative Action Day. Norm Lefmann, Assistant Executive Officer, and Jeff Rush, Workers’ Compensation Program Manager, from the California JPIA joined with other public agency representatives and associate vendors from throughout the state to educate legislators and their staffs about bills that can significantly affect joint powers authorities and their members. 

In addition to the legislative meetings, attendees heard from Mark Rakich, the consultant to the Assembly Insurance Committee, and Gideon Baum, the consultant to the Senate Labor and Industrial Relations Committee. Rakich and Baum provided insights into last year’s workers’ compensation reform and the current legislative session.

With the assistance of CAJPA’s lobbyist, Julianne Broyles, the CAJPA Legislative Committee selected a number of bills to serve as the focal points of the legislative meetings. Those bills include the following:

• AB 517 (Achadjian). Occupational safety and health: local public entities: penalty moneys: grants.
Position: Support

Currently, school districts are allowed to receive a refund for penalties assessed by Cal/OSHA if the school district remedies the condition that resulted in the penalty. This bill would provide counties, cities and special districts to apply for refunds in similar circumstances.

• SB 189 (Monning). Health care coverage: wellness programs.
Position: Oppose
This bill would prohibit health plans from offering lower premiums or co-pays to consumers who participate in wellness plans.

• SB 626 (Beall). Workers' compensation.
Position: Oppose

This bill would repeal many of the provisions of the recent workers’ compensation reform that are beneficial to employers. 

Collectively, the attendees visited the offices of dozens of State Senators and Assembly Members to express the concerns of California JPIA members and public agencies statewide. 



Legislative Update

Legislative Update

SB 863: Shortening the Life of Claims?

by Jeff Rush, Workers’ Compensation Program Manager

Two of the key provisions of the recent workers’ compensation reform (SB 863) may prove successful in shortening the amount of time for which some workers’ compensation claims remain open. One of the key provisions of the law was an effort to curtail the filing of liens and establishing a statute of limitations for liens. Beginning January 1, 2013, a lien claimant must pay a $150 fee to file a lien. The Workers’ Compensation Insurance Rating Bureau recently reported numbers that confirm lien claimants have been gearing up for these changes. 

While 463,856 liens were filed throughout 2011, a staggering 513,129 liens were filed in the 4th quarter of 2012 alone! Once these liens have been removed from the system and liens are submitted at a lower rate in the future, it will lead to a more timely resolution of clams. 

Another significant element of SB 863 is the creation of an independent medical review (IMR) system. Previously, medical disputes were addressed by utilization review and when an injured wanted to appeal the utilization review determination, their only remedy was to seek an opinion from a Qualified Medical Examiner (QME) or an Agreed Medical Examiner (AME). It could often take six months or more for a QME or AME to address the dispute, while the IMR process has a timeframe that is expected to produce a final opinion within 45 days of the date of the request. Some of the benefits of this system may include reduced disability costs, more streamlined provision of medical care and a more timely recovery for injured workers. The IMR process does have a fairly hefty pricetag with typical reviews costing $560 although that cost may be far outweighed by the benefits. 

If you have questions about SB 863 or the Authority’s workers’ compensation program, contact Jeff Rush, Workers’ Compensation Program Manager, at jrush@cjpia.org