Common misconceptions regarding schedule loss of use awards - Injured Workers' Bar Association

Aug 12, 2017
One of the primary agenda items for New York’s business and insurance lobby in 2017 is the reduction and/or elimination of so called schedule loss of use awards in workers’ compensation. Various reasons have been advanced as to why this goal is purportedly laudable. The purpose of this memorandum is to correct several common misconceptions regarding schedule loss of use awards, associated costs, and the compensation process itself, that have been perpetuated by interest groups adverse to the rights of New York’s permanently disabled workers.
 
 
 

MYTH #1: The current schedule loss of use guidelines “reflect thirty - year old medical assumptions” and thus lead to inappropriate calculation of SLU awards.

The Board’s SLU guidelines, much like the 2012 update to the non - schedule permanency guidelines, are almost entirely indexed to measurements of a person’s residual functional capacity in determining permanency ratings, and are based little if at all on the nature of any particular pathology or procedure. 1 As such, any improvements in medical technology, the result of which would be a better outcome for the patient, will automatically by the very logic and structure of the current guidelines result in a lower severity or pe rcentage loss. A n accounting for improvement s in medical technology is thus already built in to the cur rent guidelines.

MYTH #2: Eliminating schedule loss of use awards will dramatically reduce costs for insurance companies and businesses.

Contrary to the above notion, the elimination of schedule loss of use awards will dramatically increase the number of disputes between workers and insurance companies regarding every aspect o f a person’s disability and lost time, temporary or permanent. Whether in the form of requests for judicial intervention, or carrier defenses to workers’ claims, litigation in the compensation forum will skyrocket, which in turn will markedly increase the costs of defending each file over time. In the end, the only true casualties of this proposal will be New York’s permanentl y disabled workers, and the only true beneficiari es the defense counsel who bill the carriers for their services. Cost s will not be decreased overall but simply transferred.

MYTH #3: If a permanently impaired worker does not lose sig nificant time from wo rk, s he is not truly disabled and do es not deserve to be compensated.

Those who have sustained any form of permanent injury in any aspect of life can likely attest that lost time from work is not the only gauge of permanent damage to one’s existence or fu ture earning capacity, it is merely the most immediate. A worker who has lost an entire arm (even a doctor or a lawyer) will almost certainly experience impairments in wage earning capacity over the course of her life, however accommodating her present emp loyer or situation may be. In l ight of all the effects such a permanent loss would engender, should a worker that loses one entire arm in a work accident get no monetary compensation whatsoever simply because she r eturns to work the day after her amputatio n surgery?

MYTH #4: People who are injured in work accidents are unfairly given too much compensation.

When a worker – or anyone for that matter – is permanently disabled, for example having lost one of his arms, it can fairly be stated that no amount of monetary recovery will ever truly make that person whole again. The workers’ compensation system begins by entirely exempting many forms of monetary recovery for injury that other tort systems provide, such as pain and suffering, loss of life enjoyment, and loss of spousal relationship, to name only a few. In other forums, a monetary recovery for a truly devastating permanent loss can be in the millions.

MYTH #5: Only New York has such a bizarre system of compensating permanently disabled workers

In reviewing the compensation systems of nearly all 50 states, it can fairly be said that there is no perfect calculus for adequately compensating injured wor kers while maintaining the lowest pos sible cost structure to do so. Compensation premiums are based primarily upon average wages, which of course are higher in New York than elsewhere; this renders a dollar - for - dollar comparison inadequate. As of 2004, however, about 43 states utilized some form of schedule, or list of cove red body parts, to compensate for permanent impairment to an extremity. 2 Several states actually employ a “whole body” schedule, which also includes lump - sum payments for spinal and other impairments.

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