Host Sean Harris talks with OAJ member, Chelsea Fulton Rubin, about the interaction between the workers’ compensation system in Ohio and politics.
Sean: Hello, I’m your host Sean Harris and this is episode 46 of Civilly Speaking brought to you by the Ohio Association for Justice. Today is March 19th and I’m here with our guest Chelsea Fulton Rubin from Columbus. Chelsea thanks very much for joining us here on Civilly Speaking.
Chelsea: Thanks for having me, Sean.
Sean: Our topic today is the interaction between the workers’ compensation system in Ohio and politics. How did workers’ comp get started in the first place?
Chelsea: There was a constitutional amendment in 1912 that gave the Ohio General Assembly the power to create a workers’ compensation system in Ohio. Basically, it was a, it is a no-fault system, which is contrasted with torts so those cannot be used as a defense by the employer basically if it happens at work, you can be compensated you have the right to participate in the system. It was a mutual compromise between employees and employers. They thought that it would be a more efficient system if they take out fault and they thought it could solve the problems of the industrial revolution. Obviously, there was going to be a lot of catastrophic injuries happening because of that.
Sean: It’s funny it’s probably a symptom of the times right because it’s hard to imagine a quote no fault system being created today outside the confines of burgeoning industry and wanting to have jobs and create jobs and create products and all those things that were happening at the turn of century.
Chelsea: Right, and actually it was a humanitarian system the goal was for social protection in as you say employers wanted to opt into the system because employees couldn’t get damages so they were giving up some benefits and employers were giving up benefits as well. And so, in exchange we have this system that they thought again injured workers could get compensated faster and get treatment faster and so it was supposed to be a system that that benefited all sides.
Sean: How does Ohio compare to other states where its state run, the comp system?
Chelsea: Yes, so Ohio’s actually unique. It is a monopolistic state-run system there’s only four like it at this time North Dakota, Washington, and Wyoming. Other states have privatized work comp systems so you have private insurance companies that will compensate versus our state where we have the Ohio Bureau of Workers’ Compensation which is basically the administrative arm of our system and the Ohio Industrial Commission that kind of is the adjudicatory body where we do hearings. So again, Ohio is a minority in that respect it is run by the government and it is very unique.
Sean: And of course, privatization has been discussed at least recently and probably much longer. Do you have a sense of how Ohio’s system compares to the private systems?
Chelsea: Well it’s interesting that you brought up privatization because actually the insurance industry was most recently against privatization because they don’t want insurers coming into the state.
Chelsea: Exactly. But I am not quite sure how other states are run just because each state is so different and especially Ohio because we have the Bureau and it’s monopolistic system, but obviously we’re not dealing with private insurers. We just are dealing with state fund employers and then employers also have the choice to be self-insured. So, you have the Honda’s, you have the bigger employers in the state that basically manage their own benefits.
Sean: So employers have a choice whether to self-insure or participate in the state system?
Chelsea: Correct. So it’s a privilege. So employers that can afford it can be self-insured and then employers that cannot afford it generally pay premiums into the state fund and that’s how it works.
Sean: Do you find a difference from the injured workers side dealing with a self-insured employer versus somebody who pays into the state fund.
Chelsea: Yes. Generally, the self-insureds can afford bigger firms. I would say the legal representation is different. Sometimes when you’re dealing with a state fund employer they may not even have an attorney at the table in a hearing they could actually just have a TPA and with a self-insured employer your generally always going to have an attorney that you’re dealing with and from firms that have a lot of expertise in the workers’ compensation system.
Sean: And forgive me when you say TPA that means?
Chelsea: A third party administrator.
Sean: So many three letter acronyms to keep track of. My sense always whether it’s in workers’ comp or otherwise when someone’s self-insured they quote treat it as their money, right? And so they kind of fight harder to giving up those dollars.
Chelsea: Right. I think that’s accurate. Yeah definitely.
Sean: And again for me as a non-workers’ comp practitioner when I hear about the Bureau and the Industrial Commission I don’t know what the difference is. To me it’s all workers’ comp. What do the two bodies do?
Chelsea: So those are the two state agencies that basically run the workers’ compensation system in Ohio. So you have the Ohio Bureau of Workers’ Compensation and they deal with all the administrative parts they’re running the fund, the administrator is the head of that, the administrator is appointed by the governor, and the Industrial Commission is where practitioners do hearings they are the adjudicating body so it’s kind of the ying and yang of the work comp system if you will in Ohio and it’s all the executive branch that are obviously two state agencies.
Sean: But they’re both in the executive category?
Sean: I would imagine the law in this regard stays the same and never changes and you’d never have to be aware of any changes in workers’ comp law.
Chelsea: Yes, that actually is not correct.
Chelsea: So, since 1912 when the constitution gave the General Assembly the authority to make the workers’ compensation statutory scheme basically they created what’s called The Workers’ Compensation Act since that time the General Assembly can and does change the statute as it likes. So, work comp practitioners obviously need to be in the know of those changes. The Bureau can change the law. Right now, we have the budget bill for the Ohio Bureau of Workers’ Compensation coming up. It’s right now it’s in the house insurance committee and so if the bureau wants to make any changes to the law it can and it goes through the legislative process, but as a practitioner you need to be aware of any changes that occur. But it’s just a little different than let’s say tort law because, we do have case law and that has developed as well, but the bulk of our law is statutory law that comes from this Ohio Workers’ Compensation Act and then there’s the administrative code that also has a force of law and that can change as well. So, there’s a lot of different things that we need to be aware of.
Sean: I was going to ask you about that. You’re dealing with both the revised code and the administrative code?
Chelsea: That is correct. So, I guess what I want to point out is that workers’ compensation involves all three branches of government. You have the governor who appoints the administrator of the Bureau, you have the governor who appoints the three commissioners of the Industrial Commission, they have six-year terms. You have the General Assembly who can change the law on the Workers’ Compensation Act and then you have the courts which obviously can change the law too. So, it’s kind of an interaction between all three branches. It’s interesting too because the General Assembly could change the law after a Supreme Court comes out with a decision it doesn’t like, which may be happening right now in terms of voluntary abandonment as well. The Ohio Supreme Court has continued to kind of judicially legislate from the bench and create law that is not anywhere in the statutory law and right now in the BWC budget bill that may be changed.
Sean: You use the term voluntary abandonment. What do you mean by that?
Chelsea: The voluntary abandonment doctrine has been an ever evolving judicial construct that basically allows employers to not pay injured workers compensation if I go into the voluntary management doctrine that may be a topic all on its own, but for the purposes of this podcast I just wanted to point out that the origin of it is basically in judicial decisions and not in the Workers’ Compensation Act and so it’ll be interesting to see in this budget bill if the General Assembly acts on that. Voluntary abandonment has had the impact of kind of putting fault into the no-fault system and so we will see if the statute is changed in the next few weeks.
Sean: I mean we’re talking about the employer claiming that the worker quit his job.
Chelsea: Yes, voluntary abandonment can arise from an injured worker being terminated for violation of a work rule, for possibly quitting their job, for basically separating employment on their own terms and that has been defense that employers have been using more and more to deny injured workers’ compensation. And I would argue that impedes the bargain between employers and employees about a no-fault system.
Sean: Well and I note that you mentioned it was a no-fault system and certainly it was conceived that way originally, but my sense is that there’s been attempts, legal attempts to inject fault over the years.
Chelsea: That would be accurate. There has for instance Gross II which was before the Supreme Court years ago. A worker was like frying chicken and then he didn’t follow work rules so it burned him, but he also was injured and so he wanted to participate in the workers’ compensation system and he was denied for that because it he said that he violated the work rule and the Supreme Court came out with a decision denying it and then they ultimately changed that decision and created an exception and said that he should be entitled to benefits because, you know that kind of jeopardizes the no-fault system, but I would say that the voluntary abandonment doctrine itself has gotten very shaky and has gotten very close to injecting falls into a no-fault system
Sean: Is there isn’t there something about drugs or alcohol, but fault?
Chelsea: Yeah but that’s a little different because the statute says that if you can prove that somebody was drunk or on drugs and they wouldn’t be entitled to the system so the General Assembly has actually created that and put that in the statute.
Sean: But that’s not, but that’s still fault right? Aren’t you still blaming the injured worker for doing something?
Chelsea: I guess, I think that the logic behind that is that if you show up drunk or on drugs you’re putting yourself and others at risk.
Sean: So it’s your fault?
Chelsea: So, I guess that I thought that was a rational exception to the no-fault philosophy. But I think if you look at politics in general the work comp system your kind of looking at the interest between business and labor not necessarily Democrats and Republicans. So, you have the AFLCIO who’s always been allied with OAJ and again, since you know the beginning of 1912 the system just interesting to see how the systems evolved, how the economy in Ohio has evolved and I think that has had direct impact on the workers’ compensation system in Ohio. I will say that this year the administrator was just appointed, Stephanie McCloud, and she just announced they’re doing a 20 percent rate reduction for private employers which is the largest rate reduction in the last 60 years, but I think that shows how the economy, I think that shows how the transformation of the economy in Ohio has kind of been going the last you know 50 60 years there’s not as many jobs that are unsafe. You have the gig economy now you have automation, not as much blue-collar work. So it will be interesting to see how the workers’ compensation system continues to evolve.
Sean: I saw that headline that they were rebating 20 percent premiums to employers and I thought well that’s good that means all the injured workers’ have been completely compensated and there’s money left over to give back, is that what that means.
Chelsea: Yeah that’s not exactly true and I think with the impending threat or maybe even opportunity for new legislation, I think it should be OAJ’s argument to say that you know employers in this grand bargain they have continued to have their premiums reduced and reduced but injured workers’ benefits have stayed the same. They have not continued to rise. So I think, with any impending legislation it’s important to look at why the system was started and that great bargain between employers and employees and make sure that both sides are still holding up their end of the bargain.
Sean: Chelsea that was great. Thank you very much, thanks for being here today on Civilly Speaking.
Chelsea: Thanks for having me Sean. It’s been a pleasure
Sean: And thank you to all our listeners out there. If you like our show and want to learn more check out civillyspeaking.com or please leave us a review on iTunes and we’ll see you here for the next episode of Civilly Speaking.