The Big "I" and many in the industry are concerned about a recent report by the U.S. Department of Labor (DOL) that criticizes state workers' compensation systems and suggests that increased federal oversight may be needed. The Big "I" strongly opposes federal regulation of insurance, including federal oversight of state workers' compensation systems.
The report says that state workers' compensation systems are failing to provide workers with adequate benefits. The report also suggests a race to the bottom in state laws, citing recent legislative efforts in some states to restrict workers' compensation benefits such as consideration of opt-out laws in South Carolina and Tennessee.
Of note, the report says that the "current situation warrants a significant change in approach" and "whether to increase the federal role in oversight of workers' compensation programs, including the appointment of a new National Commission and the establishment of standards that would trigger increased federal oversight if workers' compensation programs fail to meet those standards" deserves additional consideration.
This DOL report is the first such effort by the agency in more than a decade and was prompted by an October 2015 letter from 10 Democrat members of Congress. The letter questioned the adequacy of state workers' compensation laws and urged the DOL to use the agency's "expertise and authorities" to take a "renewed interest" in overseeing state workers' compensation programs.
The DOL report agreed with a contention in the 2015 letter that raised concerns that state workers' compensation laws were shifting the costs associated with occupational injuries and illnesses to social benefit systems such as Social Security Disability Insurance and Medicaid.
While the report suggests that increased federal oversight may be needed, it did not outline any specific plans. Sen. Sherrod Brown (D-Ohio) has told news outlets that he will work with his colleagues on legislative options, such as possible minimum standards for workers' compensation systems, to address the DOL's findings in the next Congress.