Arkansas' 90th General Assembly is committed to injuring working Arkansans in every possible way. I recently blogged about HB 1907, which would abolish the "made whole" doctrine and force injured Arkansans to become indentured servants to their insurance company for the sole reason that they were an innocent victim of someone else's negligence. I recently blogged about HB 1907 and its awful results for Arkansans.
But the damage to Arkansans does not stop there. Representatives Matthew Shepherd and Jeremy Gillam, as well as Senators John Cooper, Jonathan Dismang, and David Sanders have filed HB 1768. This is another horrible bill that places the interests of insurance companies that write workers comp insurance above those of injured Arkansans.
Now, what does this bill propose to do? We are all familiar with workers compensation laws, right? If you are injured on the job, your employer is required by law to provide workers compensation benefits via workers comp insurance. In return for the requirement of providing this coverage to employees, employees give up all rights to sue their employers for negligence. Workers compensation is the employees' sole remedy. Workers compensation is not perfect, and it does not provide full compensation for injuries suffered. However, it is also no fault and provides medical insurance and some small measure of wage loss (often only a percentage and only for a short amount of time) for individuals who suffer workplace injuries.
However, there are some situations where a worker's injury may be the result of a third party's negligence instead of a workplace hazard. For example, lets say a worker is driving a company vehicle doing company work and is hit by a drunk driver. Those actions were still within the "course and scope of employment," and workers' compensation will pay for the medical care. However, the worker may still have a negligence case against the drunk driver. Under existing law, the "made whole" doctrine applies. The made whole doctrine provides that unless and until the injured party is made whole from his injuries (pain and suffering, permanence, lost wages, etc) then and only then does the workers comp carrier have a right of "subrogation." Subrogation is when an insurance company, despite being paid premiums on the front end, double dips into any settlement or verdict to get repaid for the benefits it paid. It gets paid on the front end in premiums and on the back end by getting into its own insured's pocket.
This was the law in Arkansas for years and years. But this bill seeks to abolish made whole in the workers comp context and provide that the first person who gets paid out of any third party verdict or settlement is not the worker who was injured through no fault of his own, but instead the workers comp carrier. Oftentimes, an individual may be permanently injured or disabled, but under this bill, that is not important. HB 1768 wants to make sure that the comp carrier gets a windfall.
Why is this bad? Several reasons:
1. Injured or disabled workers are made indentured servants to their insurance companies under this bill. If they pursue a case against a third party tortfeasor, they are doing so only so the insurance company can come take it. This bill would deprive these injured workers from any form of complete recovery.
2. This bill will likely force individuals onto government programs that the taxpayers will pay for. If someone is disabled and no longer able to work due to a workplace injury, a third party settlement or verdict will assist them in obtaining suitable medical care they need. If HB 1768 passes, disabled workers will often have nowhere to turn than Medicare or Medicaid. These programs are funded by us, the taxpayers. This bill would give money away to multi-billion dollar insurance companies and let the taxpayers pay for the medical care these workers need. This is the definition of big government.
3. This bill puts profits over people. It values the insurance company's bottom line over the workers that are out there sweating and toiling to put food on the table. This bill sends a clear message that those workers are less valuable and less important than a nameless, faceless, heartless insurance company.
4. Insurance companies are allowed to double dip. They make a net PROFIT when their insureds get hurt. How? They get all the premiums up front and then they force the workers to go out and get their money back on the back end. Do they refund the premiums if they get subrogation? Of course not!
This is another horrible bill that is currently before the Arkansas Public Health Committee. This is bad policy. This is a bad bill. It hurts working people. Please contact your legislators and tell them to vote NO on HB 1768.