The Potential Ripple Effect of the Repeal of Obamacare

According to the Legislative Analyst’s Office’s February 17, 2017 report, the repeal of the 2010 Affordable Care Act could have substantial ramifications to the State of California. Depending on which components of the ACA are repealed, the consequences could include potential loss of a substantial amount of federal health care funding, the uncertain survival of Covered California and a disruption of the commercial health insurance market.

Perhaps the greatest ramification of the repeal of the ACA will be a potentially considerable increase in the number of uninsured Californians, which would be anticipated to increase from 3 Million to 7.5 Million individuals.

It would not strain one’s imagination to visualize a corresponding increase in the assertion of workers’ compensation actions. Individuals, whose medical care had previously been covered under the provisions of the ACA, will seek to shift responsibility for curing or relieving these conditions to their employers. Although the current workers’ compensation framework has been described as a benefit delivery system, it was never intended to serve as a replacement for failed private insurance or government assistance. Nearly 100 years ago, California Constitution Article XIV was added as an Amendment which provided liability on the part of employers for industrial injuries regardless of fault. This concept was codified in Labor Code Section 3600 which requires that the injury both arise out of and occur during the course of the employment. However, once an industrial injury has been either admitted or judicially determined, the employer bears all responsibility for furnishing medical care in connection with the condition: because there can be no apportionment to non-industrial causes (Granado v WCAB (1968) 69 Cal. 2d 405), the fact that 99% of the reason that the individual is afflicted with the debilitating cardiac condition is due to totally non-industrial factors, for example is irrelevant.

In light of the foregoing, more intensive scrutiny of all claims of industrial injury must be undertaken utilizing not only current tools but also those that may be available in the future.

1. Act expeditiously upon the receipt of a claim form. Labor Code Section 5402 requires that the employer make a compensability determination within 90 days from the filing of the claim form. The failure to do so renders the claimed injury presumptively compensable. (State Compensation Insurance Fund v WCAB (Welcher) (1995) 37 Cal. App. 675) A presumption of injury that is not rebutted by evidence that could not have been acquired within the initial 90 day period is the equivalent of an admitted or judicially determined injury. The mere existence of injury opens the door for the employer’s liability not only in connection with indemnity, but also, more importantly, medical treatment. The duty to conduct a full and fair, good faith investigation as required by CCR Section 10109 must be timely completed. The good faith rejection of the claimed injury based on that investigation can serve to deter those individuals who have attempted to utilize the workers’ compensation system as a means of treating a non-industrial condition from asserting an Application for Adjudication of Claim.

2. Labor Code Section 5402(c) does require that the employer authorize treatment for the alleged injury until a compensability determination is made. However, that requirement is not unconditional. The treatment must be consistent with Labor Code Section 5307.27 (Medical Treatment Utilization Schedule) and the liability will not exceed $10,000. With this in mind, the Utilization Review process as set forth in Labor Code Section 4610 must be timely applied to each and every Request for Authorization.

3. The Legislature has provided a wide array of defenses available to the employers of the state. Each claimed injury must be scrutinized to determine the potential applicability of any of these affirmative defenses. Was the individual claiming the injury an employee? (Labor Code Section 3600(a)(1)) Was the injury proximately caused by the individual’s intoxication by alcohol or a controlled substance? (Labor Code Section 3600(a)(4)) Was the injury intentionally self-inflicted? (Labor Code Section 3600(a)(5)) Did the injury arise out of an altercation in which the individual was the initial physical aggressor? (Labor Code Section 3600(a)(7)) Did the injury arise out of voluntary participation in an off-duty recreational, social or athletic activity not constituting part of the employee’s work-related duties? (Labor Code Section 3600(a)(9)) Was the claim of physical (Labor Code Section 3600(a)(10)) or psychological (Labor Code Section 3208.3(e)) injury asserted subsequent to termination or layoff? Was the claim of psychological injury asserted by an individual who had been working for the employer for less than six months? (Labor Code Section 3208.3(d)) Was the psychological injury substantially caused by a lawful, non-discriminatory, good faith personnel action? (Labor Code Section 3208.3(h)) Assuming that a lawful, non-discriminatory personnel action caused the psychological injury, would any physiological manifestations, such as headaches, internal complaints, etc., also be non-compensable? (County of San Bernardino v WCAB (McCoy) (2012) 203 Cal App. 4th 1469)

4. It can be reasonably anticipated that employees afflicted with debilitating internal, neurologic or cardiac conditions that would have been covered under the ACA program will now claim that the illnesses were work related. In addition to applying the post-termination defense provided by Labor Code Section 3600(a)(10) to terminated employees, the statute of limitations defense furnished by Labor Code Section 5405 can be applied to currently employed individuals. That statute generally provides that any action must be filed within one year from the date of injury or one year from the last furnishing of any benefit by the employer. A group health insurance carrier’s furnishing of benefits to the employee is not the equivalent of the employer’s provision of benefits, absent the employee’s notice to the employer that a work related injury caused the need for treatment. (Nielsen v WCAB (1985) 50 CCC 104) Because claims of debilitating internal, neurologic and cardiac conditions are usually filed as a cumulative trauma theory, the date of injury is defined by Labor Code Section 5412 as the date that there is a concurrence between the employee’s disability and the individual’s knowledge that same was work-connected. In order to avoid a finding of compensable injury, the focus of inquiry should be on not only whether there was a period of absence from work or impairment caused by the condition (medical treatment may be evidence of impairment pursuant to State Compensation Insurance Fund v WCAB (Rodarte) (2004) 69 CCC 579)), but also the date that the individual believed that the condition which necessitated medical care was work related.

5. Recognizing the potential for abuse of the cumulative trauma theory insofar as it potentially obligates employers within this state to be responsible to provide medical care for truly non-industrial conditions, Assembly Bill 221 was formulated on January 25, 2017 and is currently pending in the Insurance Committee. This Bill would substantially modify Labor Code Section 4600 by providing that, for all cumulative trauma injury claims filed after January 1, 2018, neither the employer nor the employee will have any liability to satisfy bills in connection with medical treatment unless the treatment was authorized by the employer, the injury to the body part or parts for which the treatment was provided was accepted by the employer, the Court had judicially determined that the body part or parts for which treatment was provided was compensable or either an AME or QME determined that the claimed cumulative trauma injury was caused, in whole or in part, by the employment. The Bill would also amend Labor Code Sections 4903.1 and 5005 to provide that the employer will not be liable for payment of any lien for medical treatment for a cumulative trauma injury claim asserted after January 1, 2018 unless these conditions have been satisfied or if the case is settled via a Compromise and Release for a figure in excess of $25,000.

The Federal government’s proposed repeal of the ACA should not serve as a basis for employees in this state to claim, in an after-the-fact fashion, that their medical conditions should be the financial responsibility of their employers.