Friday, December 27, 2013


Ergonomics, what else can I say...

Thank you for reading.

Insurers Can be Sued for Profit on Denied Benefits

December 27, 2013

In the ongoing effort to determine what constitutes appropriate remedies under ERISA, the Sixth Circuit U.S. Court of Appeals has gone farther than any court before it. Earlier this month the court affirmed a judgment directing a disability insurer to pay not only benefits due, but also an additional amount representing the profits it allegedly made on the benefits.

The case at issue is Rochow v. Life Ins. Co. of N. America. Rochow was an executive who fell seriously ill and applied for long-term disability benefits, which were denied. He appealed internally and then sued. Both a lower and appeals court found that the insurer’s denial was arbitrary and capricious.

Unfortunately, Rochow died in 2008, but his estate sued for attorney’s fees and argued that the insurer unjustly enriched itself with the money it should have paid to Rochow. His estate sought disgorgement of profits in addition to benefits, and the court awarded $3.78 million that consisted of $910,629 in denied benefits and $2.8 million more in earnings based Life Insurance Company of North America’s rate of return on equity, which ranges between 11% and 39% per year.

The court ruled that ERISA permitted a participant to recover both the benefits payable under the plan (502(a)(1)) plus additional equitable relief (502(a)(3)). The court majority acknowledged that this position conflicts with the Supreme Court’s ruling in Varity Corp. v. Howe, 516 U.S. 489 (1996), which generally holds that equitable relief ordinarily would not be available to a participant seeking plan benefits.

But the majority said that there could be exceptions, such as when a participant seeks benefits that allegedly were wrongfully denied under the plan or requests equitable relief for misrepresentations about how long he would be covered under a different plan provision.

Thus, the majority concluded that their remedy was a “logical extension” of the remedies available under ERISA and prior case law. According to the majority, merely awarding benefits was not adequate relief, so more relief was required.

There was a dissent, which pointed out that there is a need for a distinct injury to the plaintiff, but the majority ignored this position. The dissent was also concerned with the potential a ruling like this might allow plaintiffs to expand every abuse-of-discretion claim into a claim for returns on investments or profits which could create serious problems for plans that are self-insured.

This is probably not the last we will hear about this case.  But it should serve as a wake-up call about the possibility that an abuse of discretion by a plan administrator can lead to much more serious consequences than simply having to pay benefits if they are wrong.

So Who is ERISA? I don't think I know her...

ERISA is the Employee Retirement Income Security Act of 1974. It is a federal law that sets minimum standards for pension plans in private industry. ERISA does not require any employer to establish a pension plan, it only requires that those who establish plans must meet certain minimum standards.

The law generally does not specify how much money a participant must be paid as a benefit. ERISA requires plans to regularly provide participants with information about the plan including information about plan features and funding; sets minimum standards for participation, vesting, benefit accrual and funding; requires accountability of plan fiduciaries; and gives participants the right to sue for benefits and breaches of fiduciary duty.

ERISA is (also) sometimes used to refer to the full body of laws regulating employee benefit plans, which are found mainly in the Internal Revenue Code and ERISA itself. Responsibility for the interpretation and enforcement of ERISA is divided among the Department of Labor, the Department of the Treasury (particularly the Internal Revenue Service), and the Pension Benefit Guaranty Corporation.

What Type of Plans Are Subject to ERISA?

Under the Employee Retirement Income Security Act (ERISA) an employee benefit plan is defined as both an “employee welfare benefit plan” and a “employee pension benefit plan.”

An “employee welfare benefit plan” is any “plan, fund or program” which is “established or maintained” by an “employer” or an “employee organization” or both for the purpose of providing, either directly or through the purchase of insurance, benefits such as medical, dental, disability, vacation, apprenticeship, etc.  An “employer” includes an individual employer and a group or association of employers.

The following are considered welfare benefit plans subject to ERISA reporting and disclosure requirements:
  • Group medical plans, flexible spending accounts & medical reimbursement plans.
  • Group dental and vision plans
  • Group life insurance plans
  • Group short-term and long-term disability plans
  • Employee assistance plans
  • Prepaid legal plans
  • Travel accident plans
  • Funded scholarship plans
  • Formal severance plans
Voluntary plans where no contribution is made by the employer and the employer does not actively sponsor the plan are generally not subject to ERISA reporting and disclosure requirements.  However, if the employer is involved in administering or endorsing the program the plan may be subject to ERISA. 

Also, certain plans are exempt from ERISA because they are considered payroll or employment practices when paid out of the employers general assets, such as vacation and holiday pay.  Finally, government, church, state, foreign and unfunded excess benefit plans are generally excluded from ERISA as well. Virtually every private-sector employer is subject to ERISA and there is no size exemption.

ERISA without a Plan

Courts have also ruled that an ERISA plan exists, “if a reasonable person could ascertain its intended benefits, its benefit procedures, its beneficiaries and the source of its funding.”  Therefore if an employer provides benefits but does not have a written benefit plan, the employer may still be subject to ERISA, especially as it relates to requirements for paying claims, fiduciary responsibilities, reporting procedures, etc.

If a plan document does not exist when certain benefits are provided courts could determine plan terms, letters, company communications could become plan terms and fiduciaries could be exposed to additional liabilities.

What about Work Comp?

In general, ERISA does not cover group health plans established or maintained by governmental entities, churches for their employees, or plans which are maintained solely to comply with applicable workers compensation, unemployment, or disability laws. ERISA also does not cover plans maintained outside the United States primarily for the benefit of nonresident aliens or unfunded excess benefit plans.

What does ERISA have to do with staffing, your blog, and me?

How many staffing companies profit from the underwriting portion of the work comp? Can a deductible, partial self insured, a captive, etc. be subject to ERISA?

Do not forget, work comp IS an employee benefit (just like unemployment). It is compulsory (in all states except Texas). With this ruling in Rochow v. Life Ins. Co. of N. America , it not a far stretch to conclude that staffing companies (or any employer) increase profits when claims are denied (in the form of savings on deductibles, premium increases, etc.).

This could open the door to injured employees suing for denied benefits, legal costs, punitive damages, AND the profits made from the denial of such claims.

The "not applicable to work comp" is only "generally" speaking. There are instances where ERISA does apply, and (further) applicability to work comp is only a court decision away.

There is also the possibility of similar claims if state insurance laws or state work comp laws have similar provisions such as ERISA's (502(a)(3)).

You can read more about ERISA on the (Federal) Department of Labor's website here, or on Wikipedia here:

What to do?

My advice is simple:
  1. Good pay, good benefits, and a good work environment will attract good employees.
  2. Good hiring practices can prevent problems before they occur.
  3. Be involved and be seen. Have a presence at all work sites, talk to employees. Listen to their concerns, address them, and follow through.
  4. Be proactive with safety. Train, train, and train some more.
  5. Have a written safety programs that includes procedures for what happens after an accident.
  6. Investigate all lost time accidents.
  7. Communicate with injured employees and have mechanisms to ensure all injured employees are receiving needed care. 
  8. Implement light duty and "return to work" programs.
  9. Aggressively fight all non-work-related and fraudulent injuries.
  10. Don't be afraid to seek out help.

A Word of Caution:

Be careful not to put yourself in a position for discrimination, especially under the ADA (Americans with Disabilities Ac of 1990). It is not always easy to tell a good employee from a bad employee (it is not like they have a sign on their forehead).

Good pay, benefits, etc. will attract and keep good employees. Good hiring practices, probationary periods,employee handbooks, etc. will help remove bad employees.

Thank you for reading.

Thursday, October 24, 2013

Trying to Lower Work Comp, Why Bother?

S.C. Citizens Persist in Asking Lawmakers about Income

Last week (October 22, 2013), The Nerve’s Rick Brundrett published a piece about South Carolina Sen. Luke Rankin’s income. Rankin, Brundrett wrote, “has received more than $2.8 million in legal fees from workers’ compensation cases from 2007 through last year, or an average of more than $478,000 per year.”

At the same time, Rankin has routinely sponsored and amended legislation affecting workers’ comp laws – and hence his firm’s profitability. Moreover he has long been a member of the Senate Judiciary Committee, which screens candidates for the Workers’ Compensation Commission – the body that approves attorney fees in workers’ comp cases.

Owing to an exception in the state law barring conflicts of interest, it’s not entirely clear that Rankin’s behavior is unlawful. Yet it’s about as clear cut a case of conflict as you’re likely to find.

My Thoughts...

First I think they should change South Carolina's flag to reflect this climate:

Any reasonable person has to ask themselves, "Why bother?" True enough, but SAFETY of your workers is the RIGHT thing to do.Having an effective safety program may not increase profit, but it will lower costs (which is the same thing). It reminds me of Danny DeVito's famous quote from The War of the Roses (1989): "There is no winning! Only degrees of losing! "

True enough that the attorneys always get paid (even if no one else does), but we still need not give employees the opportunity or a reason to get injured and start litigation. You also need to be involved and stay on top of your claims.

Friday, October 18, 2013

Don't Drink the Bleach

It has been awhile since I have done a post strictly on safety, and I do not want to neglect that part of this blog. I have been caught up with technology (which is now half of my job) and Obamacare, so here I go back to safety. At the end of this post, I will show you one of my most effective training exercises. Read on...

Did you ever wonder why there is a warning label on bleach that says, "do not drink?" That is because, somewhere, somebody thought it was a good idea to drink bleach. They then sued the manufacturer because there was no warning label saying "do not drink."

To a certain extent, as safety professionals we have to ask ourselves, do we have to train employees not to drink bleach too?

Just like consumer products the plaintiff’s bar has plenty to do with this silly–and costly–trend. Sham product-liability cases can rack up very real damages. In 2007 the median jury award in product liability cases was just north of $1.9 million, estimates Jury Verdict Research, which tracks results of personal-injury claims.

Warning labels and safety training it don’t stop people from suing because the American legal system has become a litigation lottery. There are some protections afforded the employer from the "exclusive remedy" clause in work comp laws.

Workers' compensation statutes in most states limit a worker's remedies for work-related injuries to a workers' comp claim against the employer. Except in narrow circumstances, such as where the employer actually intends to cause harm to the worker, no matter how egregious the employer's conduct the worker's sole remedy against the employer will be through the workers' compensation system.

Typical workers' compensation laws similarly bar actions against co-employees who cause the worker's injury. Thus, workers' compensation coverage is referred to as the "exclusive remedy" available to an injured worker. In many cases, this works to the advantage of the employee, as the employee will receive benefits for lost wages, medical care and rehabilitation, even if the worker causes his own injury.

Nonetheless, there are circumstances where a personal injury action remains possible. For example, sometimes an employee will be injured while on the premises of another business, or by the actions of a person who is not a co-employee. Under those circumstances, the injured worker may be able to bring a personal injury action against that third party defendant.

Situations where an injured worker may be able to bring a personal injury lawsuit in addition to a workers' compensation claim include the following (from
  •     Product Liability Actions - Sometimes a worker will be injured by using defective or unreasonably dangerous equipment, or due to dangerously deficient instructions or warnings in relation to the operation of the equipment, and the fault for the defect will lie with a third party (e.g., the manufacturer, distributor, or installer of the equipment). It may be possible for the injured worker to bring a product liability action against that third party.
  •     Injury Occurring On Somebody Else's Premises - Sometimes a worker will be performing job duties away from the employer's premises, and will suffer injury due to the conduct of somebody at the remote jobsite. For example, a delivery driver may become involved in a car accident, and will usually be able to sue the driver who caused the accident in addition to claiming workers' compensation. Similarly, a worker who is performing tasks at another facility, who is injured by the negligence of a third party while performing that work, may be able to bring a personal injury suit against the negligent third party (and, again, possibly also that person's employer).
  •     Intentional Torts - If the employer actually intends to harm the worker, the exclusive remedy provision of workers' compensation law will not apply and the injured worker may bring a lawsuit against the employer. Note that this does not extend to situations where the employer acts with indifference, or creates an exceptionally and unlawfully hazardous working environment - it means an actual intent to cause harm. Due to its narrow nature, this exception is rarely implicated.
  •     Third Party on Employer's Premises - Sometimes a third party will be on the premises of the employer, and will commit an act which causes injury to the employee. For example, a contractor may be performing roof repairs on the employer's building, and drop a tool on a worker's head, or a delivery driver in a warehouse may injure an employee by hitting him with a forklift. Where the injury is caused by a person who truly is a third party, and has no employment relationship with the injured worker's employer, it may be possible to pursue a personal injury action against that person (and possibly also that person's employer).

 The last item, Third Party on Employer's Premises, is of particular interest to consultants; creative attorneys have tried to sue consultants saying that their training was "defective," thus leading to the employee's injuries.

 The Warning Labels

 Here are some warning labels:

Label: Do not put any person in this washer.
Product: Huebsch Washing Machine
First load: whites. Next load: the youngest daughter.

Label: Safety goggles recommended.
Product: Staples’ letter opener
Sadly, this was a misprint. According to Amy Sandler, a public relations rep at Staples, “The label is meant for our retractable box cutter, where the blades might slide off. Package redesigns are currently being shipped to Staples and with the correct ‘Keep out of reach of children’ warning.” 

Label: Avoid death.
Product: New Holland’s small tractors
Winner of the 11th annual Wacky Warning Label contest, sponsored in part by the Foundation for Fair Civil Justice.

Label: Do not use if pregnant or nursing.
Product: Extenze "Male Enhancement" Drugs

Label: Never use while sleeping.
Product: Conair Hair Dryer
What about in the shower?

Label: Do not dangle the mouse by its cable or throw the mouse at co-workers.
Product: SGI computer mouse

Label: Flammable. Do not put in mouth.
Product: Black Cat Fireworks

Label: Wearing of this garment does not enable you to fly.
Product: Child's Superman Costume

Label: Caution, Hot.
Product: Mc Donalds (Hot) Coffee

Label: Do not drive with sun shade in place.
Product: Automotive Sun Shade

Label: Warning, risk of fire.
Product: DuraFlame Fireplace Log

Label: Do not hold the wrong end of the chainsaw.
Product: Chainsaws
Really? There is a right end and a wrong end? I just learned something.

Label: Motor vehicles contain chemicals known to the State of California to cause cancer and birth defects.
Product: New Cars
I don't live in California, so I am safe.

My Hands-Down Favorite:

Label: May contain traces of peanuts and human flesh.
Product: Tim Tam brand chocolate biscuits made by Arnott's food company
...Traces of WHAT?!?

 What to Do?

As safety professionals do we have to assume that all employees are stupid? As business owners do we have to assume that everyone who comes in to our place of business is stupid?

Let us look at the numbers. As my brother says, "remember that half of all people are below average." This is funny, but look at it from a statistical standpoint (based on a bell curve): out of every 10 employees, 2 will be brilliant, 5 will be average, and 3 will be "dumb as a stump."

That is a look at intelligence, but common sense is different all together and needs to be factored in. You could be as "dumb as a stump," but having common sense, you will NOT drink bleach. You can be brilliant, but lacking common sense, and you would drink bleach.

Training, Training, and More Training

What to do? To be safe, train, train, and more training. Assume that your audience (employees) know nothing. There are no stupid questions, only stupid answers. Hands on training, with employee involvement is the best learning tool.

Globally Harmonized System of Classification and Labeling of Chemicals (GHS)

That leads me to GHS.

OSHA's Hazard Communication Standard (HCS) is now aligned with the Globally Harmonized System of Classification and Labeling of Chemicals (GHS). This update to the Hazard Communication Standard (HCS) will provide a common and coherent approach to classifying chemicals and communicating hazard information on labels and safety data sheets.
The Globally Harmonized System of Classification and Labeling of Chemicals or GHS, is an internationally agreed-upon system, created by the United Nations. It is designed to replace the various classification and labeling standards used in different countries by using consistent (standardized) criteria for classification and labeling on a global level. Its development began at the United Nations Rio Conference in 1992. It crosses the language barrier by using universally recognized symbols and pictograms.

The revised standard will improve the quality and consistency of hazard information in the workplace, making it safer for workers by providing easily understandable information on appropriate handling and safe use of hazardous chemicals. This update will also help reduce trade barriers and result in productivity improvements for American businesses that regularly handle, store, and use hazardous chemicals while providing cost savings for American businesses that periodically update safety data sheets and labels for chemicals covered under the hazard communication standard.

Major changes to OSHA's Hazard Communication Standard
  • Hazard classification: Provides specific criteria for classification of health and physical hazards, as well as classification of mixtures.
  • Labels: Chemical manufacturers and importers will be required to provide a label that includes a harmonized signal word, pictogram, and hazard statement for each hazard class and category. Precautionary statements must also be provided.
  • Safety Data Sheets: Will now have a specified 16-section format.
  • Information and training: Employers are required to train workers by December 1, 2013 on the new labels elements and safety data sheets format to facilitate recognition and understanding.
 You can find more information about GHS and HazCom on OSHA's HazCom page here:

The best source of information on the GHS is the United Nations' publication: A Guide to
The Globally Harmonized System of Classification and Labelling of Chemicals (GHS)
,  also called "The Purple Book," available on the DOL web site here:

My Best Training Exercise:

This is my best and favorite training exercise. I use this when doing OSHA 10 & 30 hour training. I like to do this on the 2nd day, first thing in the morning.

I start off with 4 consumer products: toluene, Windex, red food coloring, and sand.

I then ask, if used in the workplace, which of these would be considered a hazardous material?

Then I pause......

Let's make this a little more interesting, let me add milk (which I just happen to be drinking that morning as everyone else is drinking coffee and energy drinks).

So, we have 5 consumer products: toluene, Windex, red food coloring, sand, and milk.

Again I ask, if used in the workplace, which of these would be considered a hazardous material, require training to handle, and need to have an MSDS sheet for?

Think. Then scroll down for the answer.





The Answer:

The Correct answer is: ALL of them if used in the workplace, would be considered a hazardous material

Toluene: A hazardous solvent (more on toluene here:), no further explanation needed.

Windex: I chose this because of the controversy about OSHA citing offices for not having MSDSs on white out. OSHA has since come out with Interpretation and Compliance Letters on consumer products such as White-Out and Windex here: I would argue using Windex as intended, would expose the employee to a concentration of ammonia fumes, would trigger  the Haz Com Standard.

Red food coloring: it is made from petroleum, contaminants, and propylene glycol (a.k.a. antifreeze). Yellow #5 (Tartrazine) is made from crude oil runoff and contains a known carcinogen called benzene.  Benzene has been banned from our gasoline in the US. The same Blue 2 dye that colors our jeans also colors our foods. Now times are tough, but I doubt any of us would eat gasoline or jeans willingly.

For reference: The basic ingredients that on on the back of the box of any artifical colors, that you buy from your grocery store.  This is off the McCormick's box

Here is the link:


When food company's buy PROPYLENE GLYCOL they are handed an MATERIAL SAFETY DATA SHEET (link to PDF file here:)

Sand: This is silica (silicon dioxide). Silicon is the same main element that makes up asbestos. Asbestos and silicon have many similar properties and hazards. OSHA has standards on both. OSHA's Asbestos Standard here: OSHA's Silica Standard here:

Milk: This is the tricky one. Back in the early 1990′s, EPA and DOT wanted to define milk as a “hazardous material” under rules pertaining to oil spills. This was because the definition of oils included petroleum-based oils as well as fats and oils from vegetable and animal origin. The rationale was that, in the event a milk truck overturned on or near a bridge, these procedures might reduce the potential effect on fish and other aquatic life.

In January 2009, a U.S.  court and the U.S. Food and Drug Administration (FDA) has essentially ruled that organic raw milk shipped across state lines for use as animal food must be treated like a toxic waste.

Again, I don't have all the answers. Each site is different and you need to first assess your specific hazards. I hope this got you thinking...

Thank you for reading. 

Thursday, October 10, 2013

Big Brother IS Watching!

In my previous post,"Government Shutdown: the Good, the Bad, & the Ugly..."I stated " This is NOT a political blog..." and I stand by that.

I have also stated that this blog is about the staffing industry, safety, risk, and technology. I cover this issues of risk and technology as they relate to the staffing industry and to safety. Risk does not only involve physical harm, but also financial harm, lawsuits, loss of profit, legal compliance, etc.

In another previous post,"Obamacare, the Gift that Keeps on Giving... and Taking" I covered the pandora's box that we are discovering that Obamacare is, and the potential risk that it puts employers in. Today I discovered another risk that it puts employers in.

Along with that, I also feel that I have to (also) voice the dangers that this puts the citizens of the United States in from our own government. Just as it would be wrong of me not to point out a worksite hazard, it is just as wrong of me not to point out the dangers of this law.

“It is the first responsibility of every citizen to question authority.”
Benjamin Franklin

 Furthermore, beyond the civil liberties issues, (the other risk to employers this law poses) IS related to this blog. I have also  want you to develop  Critical Thinking! Hopefully I have accomplished my goal.

“I do this real moron thing, and it's called thinking. And apparently I'm not a very good American because I like to form my own opinions.”
George Carlin

Obamacare Marketplace: Personal Data Can Be Used For ‘Law Enforcement and Audit Activities’

Oct. 8, 2013

Maryland's Health Connection, the state's Obamacare marketplace, has been plagued by delays in the first days of open enrollment.  If users are able to endure long page-loading delays, they are presented with the website's privacy policy, a ubiquitous fine-print feature on websites that often go unread. Nevertheless, users are asked to check off a box that they agree to the terms.

The policy contains many standard statements about information automatically collected regarding Internet browsers and IP addresses, temporary "cookies" used by the site, and website accessibility.  However, at least two conditions may give some users pause before proceeding.

The first is regarding personal information submitted with an application for those users who follow through on the sign up process all the way to the end.  The policy states that all information to help in applying for coverage and even for making a payment will be kept strictly confidential and only be used to carry out the function of the marketplace.  There is, however, an exception: "[W]e may share information provided in your application with the appropriate authorities for law enforcement and audit activities."  Here is the entire paragraph from the policy the includes the exception [emphasis added]:
Should you decide to apply for health coverage through Maryland Health Connection, the information you supply in your application will be used to determine whether you are eligible for health and dental coverage offered through Maryland Health Connection and for insurance affordability programs. It also may be used to assist you in making a payment for the insurance plan you select, and for related automated reminders or other activities permitted by law.  We will preserve the privacy of personal records and protect confidential or privileged information in full accordance with federal and State law. We will not sell your information to others.  Any information that you provide to us in your application will be used only to carry out the functions of Maryland Health Connection. The only exception to this policy is that we may share information provided in your application with the appropriate authorities for law enforcement and audit activities.

The site does not specify if "appropriate authorities" refers only to state authorities or if it could include the federal government, as well.  Neither is there any detail on what type of law enforcement and/or audit activities would justify the release of the personal information, or who exactly is authorized to make such a determination.  An email to the Maryland Health Connection's media contact seeking clarification has not yet been answered

The second privacy term that may prompt caution by users relates to email communications.  The policy reads:

If you send us an e-mail, we use the information you send us to respond to your inquiry. E-mail correspondence may become a public record. As a public record, your correspondence could be disclosed to other parties upon their request in accordance with Maryland’s Public Information Act.

Since emails to the marketplace could conceivably involve private matters regarding finances, health history, and other sensitive issues, the fact that such information could be made part of the "public record" could prevent users from being as free with their information than they might otherwise be.  However, as noted, any requests for such emails would still be subject to Maryland's Public Information Act which contains certain exceptions to the disclosure rules.

My View: The Risk to Employers:

According to the Fair Credit Reporting Act (FCRA), Consumer Reporting Agencies (CRAs) are entities that collect and disseminate information about consumers to be used for credit evaluation and certain other purposes, including employment.

In addition to the three big CRAs (Experian, TransUnion, and Equifax), the FCRA also classifies dozens of other information technology companies as "nationwide specialty consumer reporting agencies" that produce individual consumer reports used to make credit determinations.  

Under Section 603(x) of the Fair Credit Reporting Act, the term “nationwide specialty consumer reporting agency” means a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis relating to:
  1. medical records or payments;
  2. residential or tenant history;
  3. check writing history;
  4. employment history; or
  5. insurance claims.

This designation makes CRAs and speciality CRAs subject to credit reporting and privacy disclosures to the subject of the report (i.e. your employee). I have mentioned before that if a accident investigation is conducted in a certain manner, that opens up the employer and (possibly) the safety investigator to provisions of the FCRA.

A Bad Situation...

Consider this scenario: an employer (in Maryland) gives full time employees a monthly subsidy to purchase health insurance in Maryland's Obamacare marketplace.

The question arises, what responsibility does the employer have to disclose that the market place "...information you (the employee) supply... may be shared... with the appropriate authorities for law enforcement and audit activities"?

More, and More Big Brother

Along with the "retaliation provision" in the Affordable Care Act (ACA) being administered by OSHA, the IRS is granted 46 new powers by the ACA (reference: the Galen Institute). These powers are:
  1. collecting taxes;
  2. distributing subsidies;
  3. collecting information;
  4. and enforcement.

Collecting Information:

  1. State Exchange Information Reporting: Requires state exchanges to send to Treasury a list of the individuals exempt from having minimum essential coverage, those eligible for the premium assistance tax credit, and those who notified the exchange of change in employer or who ceased coverage of a qualified health plan.
  2. Exchange Participation Requirement: Outlines the procedures for determining eligibility for exchange participation, premium tax credits and reduced cost-sharing, and individual responsibility exemptions.
  3. Taxpayer Information Disclosure: Authorizes IRS to disclose certain taxpayer information to HHS for purposes of determining eligibility for premium tax credit, cost-sharing subsidy, or state programs including Medicaid, including (1) taxpayer identity; (2) the filing status of such taxpayer; (3) the modified adjusted gross income of taxpayer, spouse, or dependents; and (4) tax year of information.
  4. Insurance Provider Information Reporting: Requires every person who provides minimum essential coverage to file an information return with the insured individuals and with IRS.
  5. Large Employer Information Reporting: Requires information reporting of health insurance coverage information by large employers (subject to IRC 4980H) and certain other employers.
  6. Medicare Beneficiary Information Disclosure: Authorizes IRS to disclose certain taxpayer information to the Social Security Administration (SSA) regarding reduction in the subsidy for Medicare Part D for high-income beneficiaries. (Conforming amendment)


  1. Health Plan Penalty: Imposes a penalty on health plans identified in an annual Department of Health and Human Services (HHS) penalty fee report, which is to be collected by the Financial Management Service after notice by the Department of the Treasury (Treasury).
  2. New Group Plan Penalty: Subjects new group health plans to certain Public Health Service Act requirements and imposes the excise tax on plans that fail to meet those requirements. (Conforming amendment)
  3. Group Plan Compensation Discrimination Prohibition: Prohibits group health plans from discriminating in favor of highly compensated individuals. (Complaints of discrimination investigated by OSHA) 
  4. Nonprofit Indicator System: Requires the independent institute partnering with the National Academy of Sciences (NAS) to implement a key national indicator system to be a nonprofit entity under section 501(c)(3).
  5. Small Business Exemption for Cafeteria Plans: Allows small businesses to offer simple cafeteria plans-plans that increase employees’ health benefit options without the nondiscrimination requirements of regular cafeteria plans. (Complaints of discrimination investigated by OSHA)
  6. Corporate Tax Advance: Increases the required payment of corporate estimated tax due in the third quarter of 2014 by 15.75 percent for corporations with more than $1 billion in assets, and reduces the next payment due by the same amount.
source: Americans for Tax Reform

ACA and Work Comp....    

....Who Knows?

How the ACA will affect work comp is till unclear.  Technically, Work Comp is a form of health insurance and a form of life insurance. Consider the following taxing powers afforded the IRS:
  • Tax on Health Insurers: Imposes an annual fee on any entity that provides health insurance for any U.S. health risk with net premiums written during the calendar year that exceed $25 million.
  • Excise Tax on Health Insurance: Imposes a 40 percent excise tax on high cost employer-sponsored health insurance coverage on the aggregate value of certain benefits that exceeds the threshold amount.
  • Individual Mandate Tax: Requires all U.S. citizens and legal residents and their dependents to maintain minimum essential insurance coverage unless exempted starting in 2014 and imposes a fine on those failing to maintain such coverage.
We still do not know (for sure) how these provisions apply to Work Comp. Once the IRS gets a hold on this, will they be sending out tax bills to WC carriers and self insured employers?

If the IRS deems that these provisions apply to Work Comp, that has the potential to double premiums.

Independent Contractors

The ACA adds another layer of danger, confusion and potential liability for those companies wanting to use independent contractors across the United States. The ACA may tempt employers to misclassify full time employees as independent contractors.

The ACA mandates that any employer with 50 or more full time equivalent employees is responsible for providing health insurance. Employers who hover around the 50 employee threshold may be tempted to intentionally misclassify workers (meaning incorrectly classify employees as independent contractors) to get around new expenses placed upon companies by the ACA.

The ACA does not require employers to provide insurance to part-time employees. However, part-time employees can be crucial in determining whether the employer meets the threshold number of employees (and therefore whether the employer is actually subject to the ACA). When an employer has 50 full time employees (or a combined total of 50 full time equivalent), the employer is subject to the tax under the ACA.

Independent contractors do not count as employees. Under the ACA, independent contractors do not count as employees when determining whether the employer meets the minimum threshold as a large employer.

Is Your Job, as a Safety Professional at Risk?

When the economy took a downturn, marketing and safety were hit the hardest. Now, with the ACA deadline approaching, are you, as a safety professional at risk of becoming an independent contractor or part time employee? Think of how many other safety professionals that you know who have lost their jobs.

It is common practice for companies that cannot afford a full time safety professional to utilize independent contractors for safety functions. Your company may pay you a little more, but your company will save on Work Comp, health insurance, and payroll taxes.  

Ask yourself; given the option of spending so much more, how likely is my company of re-hiring me as an independent contractor?

Will Health Insurance Replace Work Comp for Independent Contractors?

With all the mandates in the ACA, will health insurance replace Work Comp for independent contractors? If health insurers have to cove a wider range of injury and illnesses, then health insurance can act as WC (excluding indemnity). This will only provide additional incentive for companies to use independent contractors.

More Reporting

The ACA requires Employer Reporting of Insurance on W-2s: Requires employers to disclose the value of the employee’s health insurance coverage sponsored by the employer on the annual Form W-2.

The ACA further requires Insurance Provider Information Reporting: Requires every person who provides minimum essential coverage to file an information return with the insured individuals and with IRS.

Am I crazy?

Am I crazy?

Yes, but that does NOT mean I am wrong. Think about how the government handled things in the past...

George Orwell was Right

I am not going into a rant on how our government has eroded our civil liberties or trounced the Constitution, but I will put some links so that you can read more and think for yourself.

"The Laws That Make It Easy for the Government to Spy on Americans" from

"The Government Is Spying On ALL Americans’ Digital and Old-Fashioned Communications" from

Final Thoughts:

No one is sure yet how the ACA will work and how it relates to WC. I hope it does work. I hope it does not damage our WC system. Having health insurance will reduce WC claims.

You have heard the expression "read the writing on the wall..."

I, your friend and humble narrator, want to thank you for reading.

Monday, October 7, 2013

Government Shutdown: the Good, the Bad, & the Ugly...

My Comments:

  I am doing something a little different, placing my comments at the beginning of this post. This is NOT a political blog, and I do not push or support any particular political view, that being said, I will point out anything that is my opinion and take ownership of it.

I do have to point out the hypocrisy of our federal government during this shut down: OSHA has been reduced to a skeleton staff potentially putting workers at risk, and members of our military lose services and must spend more money on groceries while President Obama's preferred golf course on Andrews Airforce Base remains open.

This is not political, this is insanity!!! Read on...

Government Shutdown: the Good, the Bad, & the Ugly...

The Good:

Shutdown Could Shutdown Waste

Thursday, October 2, 2013

 A benefit of the government shutdown may be that it slows the stream of waste and bad behavior flowing from the federal bureaucracy. Catching up on my reading, I noticed these items in just the last few days of the Washington Post:

  • To maximize their budgets over time, federal agencies drain their bank accounts on often wasteful items at the end of every fiscal year. The rule is “use it or lose it.”
  • A high-level EPA official ripped-off taxpayers $900,000 over two decades, apparently duping administrators, supervisors, and auditors over many years.
  • About $800,000 of federal unemployment insurance benefits were bilked by employed D.C. government workers.
  • The availability of federal subsidies for dredging may induce Key West to destroy an area of unique coral and other sea life. Historically, the Army Corps of Engineers has been an environment-destruction machine, so residents should think twice before going that route.
  • The Department of Commerce has kicked out the National Aquarium from its building after 80 years. There is no bad behavior here, just a sad story since the aquarium is an example of successful privatization. Federal funding was eliminated in 1982, and the aquarium was converted into a nonprofit corporation and supported by admission fees, donations, and volunteer efforts.
  • The FHA is asking for a $1.7 billion taxpayer bailout.
  • Environmentalists are concerned that grasslands and wetlands are being turned into farmland at a rapid pace across the northern prairies. This story mentions the effect of ethanol subsidies, but another cause of the change is the $30 billion of farm subsidies pumped out each year.
  • The central figure in the IRS scandal, Lois Lerner, was finally pushed out. It is pretty obvious that a political and ideological agenda was at work in the targeting of conservative groups, but it has been very difficult to squeeze even an apology out of IRS officials and the Obama administration. Bart Simpson’s line “I didn’t do it” has long been the approach taken by government officials caught violating the public trust.
  • A recent Washington Post article by Joe Davidson—the paper’s advocate for federal workers—was headlined “Shutdown Would Corrode Our View of Government.” I don’t think we need a shutdown for that.

The Bad:

Government Shutdown Reduces OSHA Inspection Force by More Than 90 Percent

Thursday, October 3, 2013
from: Bloomberg BNA Occupational Safety & Health Reporter

The Department of Labor's Occupational Safety and Health Administration furloughed more than 90 percent of its inspectors as a result of the Oct. 1 shutdown of the federal government, leaving the agency with only enough personnel to respond to the most serious workplace emergencies.

Two inspectors at each of OSHA's 92 area offices will remain working, according to the agency's Sept. 10 contingency plan. The agency has followed that plan, spokesman Jesse Lawder told Bloomberg BNA.

OSHA head David Michaels said in the plan that the agency must have enough staff to respond to workplace fatalities, catastrophes and situations posing imminent danger.

“OSHA employees should be able to respond to safety and health complaints or other information when employees are potentially exposed to hazardous conditions that present a high risk of death or serious physical harm,” Michaels said.

Government Shutdown

The federal government was forced to shut down for the first time in 17 years after Congress failed to reach an agreement on a continuing resolution to pay for operations. House Republicans have refused to pass a government funding bill without provisions to suspend portions of the Patient Protection and Affordable Care Act. Senate Democrats and the White House have refused to negotiate on suspending portions of the health care reform law, which was enacted in March 2010.

OSHA will keep 230 of its 2,235 staffers working during the shutdown, according to the solicitor of labor's estimates.

Michaels said the agency's active staff will include: members of the executive, compliance and information technology staff in the national office; administrators and support staff in the regional offices; inspectors in the area offices; and chemists and industrial hygienists in the Salt Lake City Technical Center.

OSHA: Prevention Duties Limited

The government shutdown leaves the agency unable to protect workers, Peg Seminario, director of safety and health for the AFL-CIO, told Bloomberg BNA.

“Regular inspections, responding to complaints, outreach, consultation, preparations for rulemaking--all the ways OSHA prevents injuries and illnesses rather than dealing with them after the fact--won't happen,” Seminario said.

The shutdown of the federal government doesn't seem to immediately impact non-federal workers in the states with their own occupational safety and health departments. For example, the California Division of Occupational Safety and Health will continue its normal day-to-day activities without interruption, spokeswoman Kathleen Hennessy told Bloomberg BNA.

OSHA has approved state plans in 25 states. Twenty-one of those states police occupational safety and health for all non-federal employees; four oversee public sector employees only.

No End in Sight

There doesn't appear to be a clear end date for the shutdown, representatives of federal workers told Bloomberg BNA.

“I don't think anyone knows, because it's a political decision, not a governmental decision,” said Alex Bastani, head of the American Federation of Government Employees Local 12, which represents workers at the Labor Department's headquarters.

Oct. 8 is an optimistic estimate for when federal employees will be able to return to work, said Dennis DeMay, chief of the National Council of Field Labor Locals, which represents OSHA inspectors and other field office workers. But it may last longer due to the deep divide between the two parties and the way that lawmakers in many congressional districts are insulated from voter dissatisfaction, DeMay added.

Impact on Other Worker Safety Functions

The shutdown forced debilitating furloughs in other government functions focused on worker safety and health.

The Occupational Safety and Health Review Commission will keep just two employees active during the shutdown, one to maintain its computer network and one to receive mail, according to the commission's contingency plan .

Two programs at the National Institute for Occupational Safety and Health will remain unaffected by the shutdown, Centers for Disease Control and Prevention spokeswoman Barbara Reynolds told Bloomberg BNA. The World Trade Center Health Program and the Energy Employees Occupational Illness Compensation Program can continue to operate because they draw from alternate funding sources, Reynolds said.

“Otherwise, most all other activities will be suspended until something changes,” Reynolds said. “Most of the research will be halted.”

The shutdown will bring the Chemical Safety and Hazard Investigation Board's core activities to a halt, managing director Daniel Horowitz told Bloomberg BNA. The Chemical Safety Board is keeping active three of its 40 employees and the three board members, according to its contingency plan.

“We'll have a skeleton crew to restart after the shutdown and keep an eye on any chemical disasters that we hope will not occur during this period,” Horowitz said. “But that is limited to just a basic screening. There are no investigators available, and we don't anticipate that we'll be able to respond to any disasters.”

The Ugly:

US House passes bill to retroactively reimburse furloughed workers

Bill, backed by White House, will reimburse federal government employees for lost pay once the government reopens

Thursday, October 5, 2013
from: Associated Press -

  The House of Representatives on Saturday passed another piecemeal bill, to make sure federal workers furloughed under the current government shutdown will be reimbursed for lost pay once government reopens.

The White House backs the bill and the Senate is expected to approve it too, though the timing is unclear. The 407-0 vote in the House was uniquely bipartisan, even as lawmakers continued their partisan rhetoric.

"This is not their fault and they should not suffer as a result," Elijah Cummings, a Democrat representative from Maryland, said of federal workers. "This bill is the least we should do. Our hard-working public servants should not become collateral damage in the political games and ideological wars that Republicans are waging."

Representative Michael Turner, a Republican from Ohio, said federal workers should not have to worry about paying their bills while Congress and the White House fight over funding the government: "They have childcare expenses, house payments to make, kids that are in college, and while the president refuses to negotiate, while he's playing politics, they shouldn't worry about whether or not they can make ends meet."

As Congress and the White House rallied around the bill, one outside group said it "demonstrates the stupidity of the shutdown". Making the shutdown less painful for 800,000 federal employees will encourage Congress and the White House to extend it even longer, driving up the cost, said Steve Ellis of Taxpayers for Common Sense.

Ellis said "essential" federal workers who stayed on the job "will feel like suckers because they've been working while the others essentially are getting paid vacations".

The White House has opposed other piecemeal efforts by House Republicans to restore money to some functions of government during the partial shutdown. White House officials have said the House should reopen the entire government and not pick agencies and programs over others.

President Barack Obama has said he will not negotiate on the temporary spending bill or upcoming debt limit measure, arguing they should be sent to him free of GOP add-ons. Congress, whether controlled by Democrats or Republicans, routinely sent Obama's predecessor, George W Bush, "clean" stopgap spending bills and debt-limit increases.

House Republicans appeared to be shifting their demands, de-emphasizing their previous insistence on defunding the health care overhaul in exchange for re-opening the government. Instead, they ramped up calls for cuts in federal benefit programs and future deficits, items that House Speaker John Boehner has said repeatedly will be part of any talks on debt limit legislation.

 The Really Ugly:

IRS Withholding YOUR Tax Refund During Government Shutdown

Thursday, October 4, 2013
from: via

 The scandal ridden Obama IRS has just announced it is halting ALL tax refund payments to Americans during the government shutdown.  What is not halting, apparently, is the hiring and implementation of the thousands of NEW armed IRS agents responsible for Obamacare.

IRS Suspends Tax Refunds and Tax Court Closes during Government Shutdown

“Tax refunds will not be issued until normal government operations resume,” said the IRS. The IRS emphasized, however, that the underlying tax law remains in effect, and all taxpayers should continue to meet their tax obligations as normal.

“Individuals and businesses should keep filing their tax returns and making deposits with the IRS, as they are required to do so by law,” said the IRS. “The IRS will accept and process all tax returns with payments, but will be unable to issue refunds during this time. Taxpayers are urged to file electronically, because most of these returns will be processed automatically.”

So individuals and businesses are required to keep sending the government money, but owed refunds will not be processed.

The thing is, the IRS claims it has an automated system that can receive your tax payment.  What this notice failed to say is that it is the very same automated system that processes and distributes refunds.  There is NO reason to have one and not the other.

The Obama administration clearly wants more Americans to go without, in the hopes their anger will turn against Republicans.  Playing politics with the people’s own money.

 The Really, Really Ugly:

Obama's Golf Course Has Been Spared from the Shutdown

Thursday, October 6, 2013

 One of Obama's preferred golf courses, the course on Andrews Airforce Base remains open during the government shutdown.  The grocery stores on the base, where troops get discounted groceries for their families are, however, closed.  They will shop "at local stores that cost about 30 percent more, Lieutenant General Raymond Mason, the service’s deputy chief of staff for logistics, said yesterday at a House hearing."

    The Andrews Air Force Base golf course is funded through user fees and that’s why it remains open, said Air Force Captain Lindy Singleton, chief of public affairs for the 11th Wing at Andrews.

Obama hit the links last weekend for a round, on the eve of the possible shutdown. Last week the President played his 35th round of golf this year.

My Final Comments:

I feel that all the money saved during the shutdown should be returned to businesses and the people who pay the taxes in the form of a refund.

Is it fair that government workers get paid for not working???

Do you, in private industry get paid if you do not come to work???

Some people have accused me of being insensitive towards government employees, let me point out that money wasted on government and taxes can be better spent improving the lives and safety of workers in private industry.

I will also acknowledge that some companies may not spend the savings on workers and safety, they may spend it on executives, owners, and shareholders. 

I also don't think it is fair that congress gets paid during the shutdown either.

I don't have all the answers, but we have to start somewhere.

Thank you for reading.