I-1082-Good for the Insurance Industry, Bad for You

by Steve Bulzomi

Out of state insurance giants, such as AIG and Liberty Mutual, want to take over Washington’s Workers’ Compensation System.  To do so, they have submitted I-1082, which will allow private insurance companies to sell workers’ compensation coverage for profit.

As things currently stand, the State and self insured employers provide workers’ compensation insurance coverage. This system has worked well providing benefits to injured workers, and retraining in some cases. Washington’s premium rates for employers have been low; in 2008 they were in the lowest third in the nation. The current system has provided a critical safety net for injured workers and their families.

 

Who wants to change this? The Building Industry Association of Washington (BIAW) gave $500,000 to a paid signature gathering campaign to get I-1082 on the ballot. Ironically, I-1082 would hurt homebuilders, who would have pay an additional $14.6 million annually if it passes — the employee’s share of workers’ compensation premiums that would be forced onto employers. Why would they do this? The fine print in I-1082 allows BIAW to set up a kickback scheme with private insurance carriers that is illegal in any other line of insurance. That’s what they want for their investment in I-1082.

 

For decades, BIAW’s political money has come from a state workers’ compensation program that allows groups to collect workers' compensation insurance premiums from members, pool them, and promote job safety. If claims are less than premiums at the end of a year, the group has a surplus. BIAW used insurance refund money to promote ultra-conservative candidates and causes, such as fighting environmental protection for endangered orca and salmon. But last year, the state reformed the program, and revenues to BIAW dropped sharply — from $50 million three years ago to less than $5 million so far this year. BIAW needs the cash, badly. I-1082 will help them get it from private insurers. I-1082 will allow BIAW to siphon premium rebates that would otherwise go back to the people who paid them.

 

Under I-1082, BIAW would be able to contract with an insurance giant and receive a fee, illegal under any other line of insurance, but allowed under I-1082.

 

Who else stands to benefit? Mega insurers like AIG and Liberty Mutual. They will be able to “cherry pick” workers’ compensation coverage for less dangerous industries and leave higher claim industries such as forestry and construction to the state system. The insurers will score millions in profits from low risk policies while those in risky industries will face higher premiums and a depleted state fund.

 

I-1082 will hurt employers as well. Under the current system, an employee pays part of his/her workers’ compensation premium. I-1082 will force employers to pay this premium. The average business owner will see an 18% rate hike. I-1082 increases costs for small business owners. These costs are not temporary or small. The initiative imposes immediate and permanent additional costs. The 1082 campaign even admits that 1082 will cost small business owners $315 million. How many businesses can handle a hit like that in the current economy?

 

I-1082 is loaded with fine print that creates special privileges for insurers at the expense of workers and the existing system. For example, it would allow private insurers to set their own rates with virtually no oversight. No other insurers doing business in Washington have this privilege. The initiative also exempts workers’ compensation insurers from the voter-approved Insurance Fair Conduct Act. This would permit workers’ compensation insurers to intentionally delay and deny legitimate claims—with virtually no way to hold them accountable.

 

I-1082 offers no protection for businesses, workers, or doctors if an insurance company suddenly declares bankruptcy. We all remember AIG’s bailout by the federal government. Should Washington’s injured workers be put into jeopardy by the type of business practices that almost bankrupted AIG?

 

I could go on, but you get the point. I-1082 is bad for Washington employers and workers. It is a cynically misleading attempt to demonize injured workers and exploit their injuries in the name of insurance profits and BIAW’s political agendas. Vote NO. Our system is not for sale.

Trip and falls are not always cut and dry

We at MBC handle a variety of injury cases.  Some are clear cut and involve catastrophic injuries.  Others are not absolutely clear cut and may involve injuries that are not catastrophic.   My next trial is such a case, but it will be given the same preparation and treatment as all cases.

This case involves a 70-year old man who tripped and fell over a pallet underneath a box of watermelons at the local grocery store.  He landed on his right side, injuring his shoulder and having to undergo surgery. 

The pallet was the same color as the box and one could hardly see the four to six inches that the pallet protruded from the box.  Store employees had “pallet guards,” which were soft devices to put around the edges of the pallets to prevent tripping.  They forgot to put them on this particular day.  That would seem like a clear cut case, but the store says it is not at fault, that our client should have seen the protrusion and, in any event, he was old and his shoulder was already worn out.

To counter the argument that they did nothing wrong, we have shown standards of the industry regarding guarding protrusions such as this and that this store and every other store that has such a protruding pallet needs to mark it with cones or similar warnings or use pallet guards.

To answer the claim that our client was at fault, we hired a “human factors” expert to explain that the main marketing tactic of stores is to attract your visual attention to displays, products and activities.  They want people looking anywhere other than the ground.  That was the situation in our case.  There was an outdoor kiosk selling fish just across from the watermelons and there were people crowding around.  It was a visual attraction.  The corner of the pallet was not.

In response to the cynical argument that the client was old and already had a bad shoulder, we have two answers.  First, his surgeon says that, but for the fall, the client would not have had the surgery.  Second, the law says a negligent party is not entitled to a healthy victim.  If you hurt someone who, because of age, prior disability or other weakness, has a worse injury than a younger, healthier person might, you pay for the whole injury caused.  That is basic fairness.

The case is not the biggest in the office, but we are busy preparing it for trial and hoping to report a positive result on a blog in the near future.      

Balancing Work and Play

by John R. Christensen

Hello to everyone in the Blogosphere.  This is my first foray into “blogging” so I thought I would start by telling you a little about me and what we do here at the MBC Law Firm. 

 I grew up in beautiful Salt Lake City and attended the University of Utah, graduating with two degrees in English and Political Science.  “Go Utes!”  I moved to the Great Northwest in 1986 and attended the University of Puget Sound, School of Law. “Go Loggers!”  After graduating I worked for the Washington State Attorney General’s Office representing the Department of Corrections and the Department of Labor and Industries, where I met my beautiful wife Penny Allen, who turned out to be a University of Washington graduate.  “Go Dawgs!”  In 1994 I started with the MBC Law Firm and haven’t looked back. 

When I’m not working on cases you will find me playing guitar or tending to my oyster farm.  But my real passion in life, and what we do best at MBC, is helping people.  When people call our office they are usually in some state of distress.  Whether it’s a car accident or a loved one who has passed away, I do my best to listen and give them the best advice I can. 

I look forward to continuing this blog and talking about local and national events and developments in the law that affect our community.  Don’t expect only law related topics on this blog…..from time to time I will slip in tidbits about guitars, oysters, and old cars just to keep a good balance of work and play. 

Working with the MBC team of attorneys and staff, and helping accident victims regain the shattered pieces of their lives is something I look forward to each and every day. 

Sincerely,

John R. Christensen

Attorney at Law