January 2016 HL Quarterly Update

Happy New Year! As we start the new year off, on behalf of Hanba Lazar I want to express our sincere gratitude to all of you that have utilized our legal services. You have allowed us to have one of our best years ever, and I’m pleased to advise you that we continue to grow. In December of this year we welcomed two new associates. Brian Zielinski and Steve Cooley have joined the firm and will concentrate their efforts in the defense of workers’ compensation cases and employment litigation.

As we say goodbye to 2015 and begin our journey through 2016, it is appropriate to take stock of the current state of workers’ compensation law in the State. To that end, we have researched the available statistics to give you a glimpse at the macro trends in workers’ compensation.

The number of new cases filed in 2015 (excluding December) was 6,091; as compared to 6,199 in 2014 and 15,221 going all the way back to 2004. As you have experienced, over the last decade there has been a sharp decrease of new case originations; however, that trend has flattened over the last two years. With regard to case aging, during 2015, of the cases not awaiting external resolution (Medicare, FOC, etc.) 61% were aged 0-12 months; 21% were aged 13-18 months; 11% were aged 19-24 months; and 7% were aged over 24 months. The average redemption amount for the 10 years from 2004 through 2014 increased from $45,627.41 to $59,208.72, respectively. The average redemption amount during this time was $57,154.59. As observed, redemption amounts have remained relatively constant despite the drop in new case originations.

We hope you find our first quarterly of the year of interest. We hope that you take the time to look over these articles and contact us with any questions or comments.

As we move forward into the new year, we wish you great success in all of your endeavors, and we look forward to helping you meet all of your risk management objectives.

Best wishes for 2016.

Keeping Care Providers In The Loop

A medical care provider can’t be excluded from the payment process simply because a no-fault insurer settled their claim with the injured party. In Covenant Medical Center v. State Farm Mutual Automobile Ins. Co., 2015 Mich. App. LEXIS 2006 (Mich. Ct. App. Oct. 22, 2015), a driver was injured in a motor vehicle accident in 2011. Covenant treated the driver and billed State Farm over $43,000 for their services. At trial, it was shown that State Farm knew of the bills and responded in writing to Covenant. However, in 2013, the driver signed an agreement releasing State Farm of any liability, in exchange for $59,000, without considering Covenant’s interest. As part of their lawsuit seeking reimbursement from State Farm, the Michigan Court of Appeals held that under MCL 500.3112, given State Farm’s written notice of Covenant’s payments, “the insurer cannot discharge its liability to the third party simply by settling with its insured”, and Covenant can pursue their claim despite the release granted to State Farm.

Michigan Lawyers Weekly, 11/23/15

Investigating an Employee Not an FMLA or ADA Violation

Plaintiff Adams was an assistant principal who was being investigated for allegedly assaulting a student in the hallway of the school he worked at. During the Defendant school district’s investigation into the matter, Plaintiff worked sporadically and was granted three separate periods of leave under the FMLA. During Plaintiff’s leave, he and his attorney met with the school board to discuss the investigation, and the Plaintiff received a written reprimand based on his conduct. Both the doctor examining Plaintiff as part of the investigation and Plaintiff’s own doctor agreed he needed to work in a lower stress environment. The school board transferred Plaintiff to such an environment, But Plaintiff sued, stating that the school’s actions during his leave constituted interference with his FMLA rights and discrimination under the ADA. The 4th Circuit Court took the case, and held in favor of Defendant. The court indicated that an investigation to an employee on FMLA could lead to a violation of that law, but in this case, the Defendant followed a standard procedure, which it had used in prior similar situations, and they gave Plaintiff due process throughout the entire investigation. Employers should not worry about investigating an employee on FMLA leave, as long as they would have taken the same action regardless of the employee’s FMLA status. Adams v. Anne Arundel Cnty. Pub. Sch., 789 F.3d 422, (4th Cir. 2015)

The Leave and Disability Coordination Handbook, September 2015

Congratulations to Peckham!

Hanba Lazar is proud to announce that our long time client, Peckham Inc. won several significant recognitions this fall. In October, Peckham was selected as #11 in Fortune Magazine’s ‘Mid-sized Great Places to Work Award’. Additionally, Peckham Inc. won seven awards from ‘Best and Brightest Places to Work for’. On the state level, Peckham won their second straight ‘Best and Brightest Companies to Work for’ Awards and were selected as the ‘elite winner’ in the Work/Life Integration category. They also won their fourth straight ‘Best and Brightest Companies to Work for’ Awards for Sustainability, as well as, their third straight ‘Best and Brightest Companies to Work for’ in Wellness. They were also chosen for the third straight year as the ‘Wellness elite winner’ in the ‘Philanthropic Company’ category. Winning the state award allowed Peckham to compete for awards on the national stage. In December, Peckham was notified that they were named as National Winners in the ‘National Best and Brightest Companies to Work for’ and the ‘National Best and Brightest Companies to Work for Wellness’. Mitchell Tomlinson, President and CEO commented that “Peckham continuously works to grow a corporate culture of respect, compassion, work and life integration, and diversity to create better businesses, richer lives and stronger communities.” Congratulations to Peckham, Inc. on these well-deserved honors!

Preparing for New Overtime Rules

The Department of Labor has long been announcing its plans to revamp current overtime regulations. The final rules are expected sometime in 2016, and the DOL has stated its intention to double the minimum annual salary for executive/administrative/professional overtime exemptions to $50,440. The burden of this new rule will likely fall more heavily on companies in lower-wage markets, as well as industries where managers earn less than $50,400 in base salary but frequently work significant overtime. As a result, employers may attempt to soften the blow of higher overtime costs by reducing the amount of hours employees are scheduled for. There are three main areas employers can focus on to help ease into the new rules. First and foremost, employers will need to clearly identify which employees earn less than $50,400 in annual salary. Second, for employees who earn close to $50,400, employers may wish to simply raise their salary to that level. If that isn’t an option, employers could track those employee’s hours and determine what work can be reassigned in order to assess their possible exposure once the new rules become effective. Third, it is important that employers keep management informed, and while no formal rules have been put in place yet, changes may take place one the DOL provides the official set of new rules.

H.R. Magazine,December 2015

Distinguishing Between Maternity and Parenting Leave

In an increasingly competitive talent market, a lot of employers are offering a wide variety of fringe benefits, including “parenting leave.” This blanket term covers three basic types of leave an employee may be offered: (1) time off under the FMLA (2) time off for bonding with/caring for a child (3) maternity leave for a new mother during the period of actual physical disability due to pregnancy, childbirth, or subsequent medical conditions. The EEOC has taken notice of this practice, and employers who offer any type of parenting leave would do well to make sure both men and women are treated equally in this regard. That means employers will be vulnerable if they offer different amounts of time off to men and women for bonding with/caring for their child; and of course it goes without saying that both men and women are entitled to take their twelve weeks of unpaid leave under the FMLA regardless of their gender. Further, the EEOC has adopted the legal standard of the 8th Circuit Court of Appeals, which states that the only way an employer can offer different amounts of leave to male and female employees is if that difference is clearly based upon the “pregnancy-related temporary disability” of childbirth. Therefore, employers would do well to make sure that the only time they consider offering different parenting leave benefits is when it is truly based on the physical disability or surrounding medical conditions of a pregnancy.

The Leave and Disability Coordination Handbook, December 2015

Transgender Employees and Workplace Restrooms

In recent history, there has been a stronger societal push toward equality for some traditionally disenfranchised groups of people. This process was somewhat accelerated after the United States Supreme Court ruling in Obergefell v Hodges. There has also been some effort, as well, to bring the transgender community into mainstream society. Accompanying this macro trend are some relatively novel and interesting legal issues for the workplace. Let’s take an example: Janie has been working for ABC Corporation for 10 years. Janie is a transgender women who is biologically male. Her coworkers, until recently, have known Janie as Johnny. Janie only recently decided to openly express herself as female. Janie wants to use the women’s restroom, consistent with her identification, but Janie’s female coworkers are troubled by this. What should the employer do in this situation? There is no federal law that textually prohibits discrimination against transgendered individuals and there are mixed results from the court cases. There are some simple best practices that can help reduce legal liability when confronting this difficult issue. The first and most obvious step is to update your company’s anti-discrimination policy to include gender identification. The employer should publicize the policy and, if possible, complement it with educational programs. Likewise, although it does raise some employee comfort concerns, allow individuals to use the restroom corresponding to their gender identification. If at all possible, provide a unisex bathroom alternative as well. However, note that forcing an employee to use a single-user restroom may create liability for discrimination. The EEOC has issued such a ruling in Lusardi v McHugh, EEOC Appeal No. 0120133395, dated April 1, 2015. That case involved a civilian Army employee who was undergoing gender reassignment surgery and was forced to use a single-user restroom rather than the common women’s restroom, having been told that only after proving that she had undergone surgery would she be permitted access to the common women’s restroom. Steer clear of this situation. The most important thing is to make a good-faith effort and provide reasonable accommodations to transgender employees. Work on using correct pronouns when describing your transgendered employees and never interrogate employees regarding their transition before allowing access to the restroom that corresponds with their gender identification. Employers may, however, make a reasonable inquiry into the employee’s gender identification to ensure proper restroom usage, but that is a slippery slope, so caution is advised.

Medicare Secondary Payer and Workers’ Compensation Settlement Agreements Act of 2015

Medicare’s secondary payer rules and set-asides relating to workers’ compensation settlement agreements have become a source of frustration for many claimants, insurers, and attorneys. What initially started as a well-intentioned set of trust fund rules has become extremely limiting to the fair and speedy administration of claims. The main goal is, of course, the predictable and efficient approval of set-asides by CMS. In order to reform this system, HR 2649 was introduced in the U.S. House of Representatives on June 4, 2015. That same day, the Bill was referred to the Committee on Ways and Means and the Committee on Energy and Commerce. On June 5, 2015, the Bill was referred to the subcommittee on Health by the House Energy and Commerce Committee. The Bill currently sits in subcommittee. It should be noted that this is one of several attempts to amend this particular provision of Medicare. Some highlights of the Bill include:

1. Deadlines: If an optional prior approval of an MSA by the Secretary is sought, that determination shall be made within 60 days after the date on which the Secretary receives the submission. The Secretary shall notify the parties in writing as to the determination. If the MSA is not approved, the specific reasons for disapproval will be noted. If the Secretary fails to give notice, then the party may file an appeal to an administrative law judge within 30 days.
2. Appeals Process: a party who is dissatisfied with a determination of the Secretary may file a request for reconsideration with the Secretary within 60 days, after notice, and become entitled to a reconsideration by the Secretary within 30 days, then a hearing before an administrative law judge and a written decision within 90 days from the date of appeal, and then judicial review.

Proponents of the Bill state that it will establish clear criteria for determining settlements that are qualified, create certainty for calculating the amounts included in the set-aside using fee schedules, provide for efficient review of settlements, and give the system a much-needed appeals process. We will track the Bill’s progress through Congress and report updates periodically.