Grand Bargain Unraveling?

Workers Compensation was conceived as a "Grand Bargain" between workers and employers, wherein workers traded the right to seek damages for workplace injuries for a "no-fault" system with established benefits. Employers, in turn, traded their various legal defenses for a system that allowed the costs of workplace injures to be made reasonably predictable and affordable.

But as more states have enacted "reforms" to their Workers Compensation statutes that put greater limitations on the benefits due injured workers, pressure has been building to challenge the "exclusive remedy" nature of Workers Compensation. The theory goes that if these "reforms" reduce benefits too much it is no longer a fair bargain for workers.

This story in Business Insider explores this issue in some detail, and makes clear, I think, the potential downsides to some recent Workers Compensation "reforms".

Of course, given how some employers can be subjected to unpredictable premium increases when the audit is done (after policy expiration) I believe a case can be made that employers also have been deprived of the supposed benefits of the Grand Bargain. I know my own view on this is somewhat colored by the fact that we specialize in helping employers fight such "shock audits", and so we tend to hear from employers disproportionately when such audits are threatening to put them out of business, but even so, as long as employers can be billed, at audit, for premium amounts far in excess of what they were led to believe would be their WC insurance costs, one can argue that employers have been deprived of the ability to reasonably predict their Workers Comp costs.