WASHINGTON (FNS) -- A worker's compensation revision passed in Oregon is expected to save the grocery industry there almost $4 in insurance rates for every $100 in payroll.
Under the recently enacted law, which was passed with strong backing from industry and opposition from organized labor, grocers should pay about $4.80 per $100, instead of the $8.50 per $100 in payroll they had been paying, according to Ross Dwinell, risk manager for United Grocers and president of the Grocers Insurance Group. Dwinell predicts it could be a model for other states looking to cut the cost of their compensation system and said he already has had requests from Tennessee officials for details about the new law.
United Grocers is a cooperative based in Portland, Ore., serving independent grocers in Oregon, Washington and California. Grocers Insurance is a wholly owned insurance subsidiary of United Grocers that deals with property and casualty insurance in 22 states.
The reform brings Oregon's worker's compensation costs, once among the highest in the nation, in line with the national average, Dwinell said. It is Oregon's second major worker's compensation reform, the first occurring in 1990. Tom Mattis, Oregon compliance manager, called it a "reaffirmation of the 1990 reform," and said it is specifically aimed at reversing the case law spawned in the wake of the 1990 reform that permitted claimants to sue their employers for compensation. While narrowing the opportunities for receiving worker's compensation on one hand, the measure also increases disability payments by $21 million yearly for permanent or partial disabilities or fatalities. Last year Oregon's employers spent $720 million on worker's compensation, with 1.4 million workers eligible for benefits.
Dwinell said the second reform was needed because "Oregon courts had started to undermine the reforms of 1990. Several cases threatened the declining costs and stabilized costs to grocers." Dwinell predicted that the new reform is so stringently written it may be more difficult for the courts to overturn key provisions. "This time, we think we're holding the line on costs," he said.
The new law would do several things: employees able to return to work would no longer be eligible for the "loss of wage earning capacity test." Consequently, only employees who are not able to return to regular work may apply. The reform aims at cutting costs by allowing employers to refer injured workers to managed care facilities and permits employers to appeal vocational rehabilitation decisions. Furthermore, employers will not be required to pay vocational costs until the appeal is final. The new law also would prohibit workers released to light duty from earning more at temporary disability than they were earning at full wages.
The law also eliminates survivor benefits for cohabitants, toughens the law regarding benefits given for pre-existing conditions and permits the denial of claims when pre-existing conditions are a major cause of the need for treatment, puts limits on expense reimbursement if workers use their own doctors, gives the state authority to set fee schedules for medical services, requires physician authorization of all temporary disability and reduces the time to file an occupational disease claim to one year after the worker discovered the disease or became disabled.
