AEU Longshore Blog ISSUE: Amendments to the Act – Part One

It’s been 100 years since the U.S. Supreme Court’s decision in Southern Pacific RR Co. v. Jensen, (244 U.S. 205 (1917)), established the “Jensen” line, limiting the coverage of states’ workers’ compensation laws to the landward side of the water’s edge and creating a gap in workers’ compensation coverage for employees working over the navigable waters of the U.S.  The decision ultimately led to the passage of the Longshore and Harbor Workers’ Compensation Act in 1927.

The Longshore Act was significantly amended in 1972 and 1984.  Since 1984 there have been several unsuccessful attempts to add amendments (and, of course, one success, amending the recreational vessel exclusion in 2009).

Previous unsuccessful amendments, in my opinion, can be grouped into two categories.

First, listed here in Part One, are significant changes that should be made in the interest of equity and to match broad changes that have been enacted in many state workers’ compensation laws.

Second, to be listed in Part Two, are changes that would be welcomed by the insurance carrier/maritime employer/self-insured employer community rationalized as restoring balance in the administration of the Act.

Part One – Significant changes

The intoxication defense in section 903(c) should be amended to strike the requirement for a successful defense that the injury must be occasioned “solely” by the intoxication of the employee.  Simply remove the word “solely”.  A corresponding change would have to be made in section 920(c) that creates a rebuttable presumption in favor of the injured worker.

The last maritime employer doctrine should be addressed.  The Act can be amended to reflect liability for intervening, post maritime employment.  Suggested language proposed in the past has been along the lines of, “Intervening Employment – If the last employment exposure that contributed to an injury or death was the result of employment that was not covered under this Act, no benefits shall be payable under this Act for the injury or death.”

The problem of concurrent Longshore Act and state act jurisdiction in many states should be addressed.  Section 905(a) can be amended to reflect that state workers’ compensation laws are expressly preempted by the Longshore Act.  Procedures can be provided in section 905 for the maritime employer to enforce this preemption of state laws.

The free choice of physician provision in section 907 should be addressed.  Previous proposals have reflected changes in many state laws that provide that insurance carriers may designate participating networks of health care panels that would be the obligatory choice for medical services and supplies for injured workers.

With regard to hearing loss several changes should be considered.  A combination of the aggravation rule and the last maritime employer rule has maritime employers frequently paying for hearing loss that they did not cause.  One change would involve language to remove the effects of lifestyle and aging from awards for hearing loss.  For example, the employer would not be liable for any part of an employee’s hearing loss caused by presbycusis, non-occupational causes, and documented pre-employment hearing loss.  The employer should only be liable for the percent of hearing loss for which it is responsible.  Pre-employment and post-employment should also be accounted for in a more equitable manner than in the current jurisprudence.

The time limits for notice of injury and filing a claim in sections 912 and 913 should be amended to reflect outside time limits.  The employer should be protected against claims filed years after an alleged workplace injury or exposure.

Past draft amendments have included a proposed change to section 921(b)(3) dealing with the payment of benefits in disputed cases.  Current language reads, “The payment of the amounts required by an award shall NOT be stayed pending final decision in any such proceeding unless ordered by the Board.  No stay shall be issued unless irreparable injury would otherwise ensue to the employer or carrier” (emphasis added, and a stay is virtually never issued).  Proposed new language would read something along the lines of, “Disputed amounts required by an award shall be stayed”.

An attempt should be made to improve the methodology for calculating the injured worker’s Average Weekly Wage.  Current methods under section 910(a) inflate the compensation rate calculation by a judicially created presumption that a worker who works 75% of the year preceding his injury is credited with a full year.  Also, section 10(c), the very broad and discretionary calculation provision, has resulted in workers receiving credit for part-time jobs, short overseas assignments that inflate weekly wages by a factor of three times or more and assorted other methods of inflating an injured worker’s wage earning “capacity” at the time of the injury.

The 20% penalty provision in section 14(f) should be amended.  An amendment should provide that payment under an award is due within 10 business days after receipt by the employer or carrier of a priority delivery or communication containing the award.

Finally, the issue of reduction or offset against disability payments based on receipt of retirement income from Social Security or retirement benefits furnished by the employer should be considered.

These are what I consider to be the most important, significant changes to be considered in amending the Longshore Act.

In Part Two, we’ll review further changes that would be welcomed by insurance carriers, maritime employers, and self-insured employers alike.

 

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John A. (Jack) Martone served for 27 years in the U.S. Department of Labor, Office of Workers’ Compensation Programs, as the Chief, Branch of Insurance, Financial Management, and Assessments and Acting Director, Division of Longshore and Harbor Workers’ Compensation. Jack joined The American Equity Underwriters, Inc. (AEU) in 2006, where he serves as Senior Vice President, AEU Advisory Services and is the moderator of the AEU Longshore Blog.

 

AEU Longshore Blog ISSUE: Annual Increase & Attorney Fees

ANNUAL INCREASE

By Industry Notice No. 162, dated September 12, 2017, The U.S. Department of Labor, which administers the Longshore Act, has announced the new National Average Weekly Wage (NAWW) effective October 1, 2017, and consequently the new maximum and minimum rates for weekly benefits derived from the NAWW under Section 910(f) of the Longshore Act.

The new NAWW effective for the period October 1, 2017, through September 30, 2018, is $735.89.  This represents a 2.46% increase over the October 1, 2016, NAWW.  All beneficiaries receiving permanent total disability or related death benefits as of September 30, 2017, receive a 2.46% increase in their weekly rate.

The weekly rates for temporary total disability and permanent partial disability are subject to the maximum rate that is applicable on the date of injury.  These benefits are not increased annually.

The new NAWW provides the new maximum and minimum weekly rates.   Effective October 1, 2017, the maximum weekly rate under the Longshore Act is 200% of the NAWW, or $1,471.78.  The new minimum weekly rate is 50% of the NAWW, so it is $367.94.

Note on calculating the weekly compensation rate:  The weekly rate for permanent total disability and temporary total disability and for permanent partial disability based on the schedule in Section 908(c) is two-thirds of the worker’s Average Weekly Wage (AWW).  The weekly rate for permanent partial disability based on a loss of wage-earning capacity is two-thirds of the difference between the AWW and the post-injury wage-earning capacity.  The weekly rate for a widow is fifty percent of the AWW.  The AWW is established as of the date of the injury.

The minimum weekly rate does not apply in Defense Base Act cases.

ATTORNEY FEES

Section 28(a) of the Longshore Act states, “If the employer or carrier declines to pay any compensation on or before the thirtieth day after receiving written notice of a claim for compensation having been filed from the deputy commissioner on the ground that there is no liability for compensation within the provisions of this chapter and the person seeking benefits shall thereafter have utilized the services of an attorney at law in the successful prosecution of his claim … “ then the employer may be liable for the claimant’s attorney’s fee.

In the case of Steven Lincoln v. Director, Office of Workers’ Compensation Programs, U.S. Department of Labor; Ceres Marine Terminals, Inc., decided March12, 2014, the federal Fourth Circuit Court of Appeals affirmed a Benefits Review Board’s (Board) decision denying an employer paid attorney fee.

In the Lincoln case, based on a 4/11/11 audiogram the claimant filed a claim for hearing loss on 5/24/11, which the employer controverted on 5/26/11.  The employer received written notice of the claim from the Department of Labor (DOL) on 6/14/11, and on 7/7/11 the employer voluntarily paid $1,256.84 in compensation, which was the equivalent of one week’s compensation at the maximum weekly rate and was paid within the 30 day time limit of Section 28(a). The employer acknowledged that there was workplace noise-induced hearing loss, but that additional information was needed before it could determine the correct compensation payment.

The Board held that the term “any compensation” in Section 28(a) is unambiguous and plainly encompasses an employer’s partial payment.  The Fourth Circuit affirmed that the payment of one week’s compensation was directly tied to the alleged injury and was not merely an attempt to avoid fee shifting.  Thus, under the terms of Section 28(a), the employer was not liable for the claimant’s attorney’s fee.

The Lincoln case did not mention medical benefits (whether they constitute “compensation”) in relation to the phrase “any compensation”.   Now we have a case that deals with medical benefits and Section 28(a).

The case is Arthur B. Taylor v. SSA Cooper, L.L.C. and Homeport Insurance Company and Director, Office of Workers’ Compensation, U.S. Department of Labor, Benefits Review Board No. 16-0174, issued June 30, 2017.

In the Taylor case, the employer paid medical benefits within the Section 28(a) thirty-day time limit but did not pay weekly disability compensation.

The employer argued that it satisfied the Section 28(a) requirement of “any compensation” by the payment of medical benefits and should not be liable for the claimant’s attorney’s fee.

The issue, thus, was whether the employer’s payment of medical benefits within the thirty day period constitutes payment of “any compensation” such that the employer cannot be held liable for an attorney’s fee, even though the claimant was successful in obtaining disability benefits after using the services of an attorney.

The Administrative Law Judge (ALJ) denied an employer paid attorney’s fee, finding that the phrase “any compensation” includes medical benefits, and in this case, the employer paid medical benefits and thus did not decline to “pay any compensation” within thirty days.

The Board reversed the ALJ’s decision.

The Board held that the term “compensation” in Section 28(a) should be read as “disability and/or medical benefits”.  The Board stated, “Its (compensation) precise meaning in the phrase “declines to pay any compensation” depends on what benefits are claimed and what benefits the employer paid or declined to pay in each case.  Whether a claimant files a claim for both disability and medical benefits or for only one or the other type of benefit, fee liability under Section 28(a) depends on whether there is success in obtaining the claimed but denied benefit”.

Essentially, if any type of claimed benefit is denied with no payment within 30 days of receipt of the claim from the DOL and legal services are necessary to obtain the denied benefit, the claimant will be entitled to an employer-paid attorney fee.

Doug Matthews, a New Orleans-based attorney at King Krebs & Jurgens who specializes in longshore cases, raised several questions related to this case.

For instance, if there are issues with regard to medical bills in the first 30 days after receipt of the claim from the DOL, is a direct analogy with the Lincoln case suggested?  Should the employer tender some amount “directly tied to the alleged injury” against potential medical liability to protect itself under Section 28(a)?

It’s not unusual for a decision to resolve the issues between the immediate parties, but in a broad sense, it seems to raise more questions than it answers. We’ll wait for future cases for clarification.

 

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John A. (Jack) Martone served for 27 years in the U.S. Department of Labor, Office of Workers’ Compensation Programs, as the Chief, Branch of Insurance, Financial Management, and Assessments and Acting Director, Division of Longshore and Harbor Workers’ Compensation. Jack joined The American Equity Underwriters, Inc. (AEU) in 2006, where he serves as Senior Vice President, AEU Advisory Services and is the moderator of the AEU Longshore Blog.