I am so excited to serve this great organization as President and look forward to working with each of you to shine the light on the plight of the injured worker. First, we all owe a debt of gratitude to Tom Holder for the excellent job he did as President last year. Tom kept me in the loop every step of the way and, from a personal standpoint, I appreciate everything he did to get me ready to undertake this job.
As I was preparing for this presidency, one trend that I kept noticing was what seemed like daily headlines announcing workers compensation insurance rate decreases in state after state. I confess I’m a little bit of rate geek having tried cases against NCCI, the South Carolina Department of Insurance, and our state Chamber of Commerce. It seems that every time a state faces a rate increase, alarm bells go off somewhere and the next thing you know a “reform” bill cutting benefits to injured workers is introduced in a state legislature.
Around 2005, NCCI filed a request for a huge rate increase in South Carolina. Almost immediately a draconian workers’ compensation reform bill was filed. Kevin Holmes, a brilliant lawyer from Charleston, SC, joined me in representing the South Carolina Small Business Chamber of Commerce. Together with the South Carolina Consumer Advocate we mounted a quite successful challenge to the rate increase. Despite the result, the insurance and business community proceeded onward with their attempts to gut our workers compensation law.
Currently, 43 states have experienced rate decreases over the last four years. Four other states don’t even count because they are monopolistic states without private insurance. There has been an average decrease of 20% across all states from 2014-2018. Based on daily headlines that trend seems to be continuing into 2019 and 2020.
An even more amazing statistic is that during this time of falling rates, insurance companies are raking in record profits. According to NAIC, carrier profits have risen from 9.4% in 2013 to 16.8% in 2017, a whopping 80% increase. One insurance executive recently told workcompcentral, “Today workers’ comp is literally propping up the profitability of the business.”
In contrast, the 2016 Department of Labor report and the 2015 OSHA report show in great detail how injured workers are not adequately compensated. 50% of the cost of an occupational injury now comes out of the pocket of the injured worker while workers’ compensations systems only pay 21% of the cost of a job related injury and the remaining percentages fall to the community and social programs such as social security disability, Medicare, Medicaid, or the Affordable Care Act. These statistics were recently confirmed in October 2019 when the National Academy of Social Insurance released its report finding that benefits paid to injured workers dropped to 80 cents per $100 of covered wages for the year of 2017. To put that in perspective, that number was $1.65 per $100 of covered wages in 1991. In our individual law practices we all see injured workers who lose their home, file for bankruptcy, lose their jobs, can’t send their kids to college, and get delayed or inadequate healthcare.
This begs the question. If increasing insurance rates are grounds to cut indemnity and medical benefits to injured workers why aren’t decreasing insurance rates a sign that benefits need to be increased to maintain the balance of the Grand Bargain? It only makes sense that if benefits have been found to be inadequate and workers compensation insurance is the most lucrative line of insurance business, something is wrong.
Talented WILG warriors have won constitutional victories across the country on due process, equal protection, and separation of powers grounds. Those victories were genius. However, taking nothing away from those victories, doesn’t it show just how out of balance things have gotten that the courts had to step in to correct things on a constitutional basis? The Grand Bargain must be protected and the scales evened once again.
This is the plight of the injured worker. Help us spread this message. No more cuts to benefits for workers while employers pay less and less for coverage and insurance carriers rake in record profits. Become a WILG board member, join a committee or task force, recruit new members but above all give us your talent and be engaged. Let’s restore the balance of the Grand Bargain. I promise you I’ll do all I can and I hope you’ll join me. The WILG symbol is the lighthouse. Let’s shine that light on the plight of the injured worker.
Mr. William L. Smith II Esq.
Chappell, Smith & Arden
P.O. Box 12330
Columbia SC 29211
Click here to read President Tom Holder's President's Messages
Click here to read President Amie C. Peters President's Messages
Click here to read Immediate Past President's Messages by Michael K. Gruber