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A shifting era for workers' compensation

THE BALTIMORE SUN

When Vernell Harris hurt her back last year dragging an infested, 45-pound box of detergent out of a Howard County school cafeteria, more than roaches came out.

Her workers' compensation claim and eventual court-ordered award opened a new chapter in Maryland labor law. Labor and insurance executives are divided on how much impact the change will have.

The Harris case and its repercussions are gaining attention in Annapolis this winter. Representatives for state employers, businesses and insurers are seeking relief from the legislature, while labor advocates contend that the Harris ruling puts Maryland's 2.5 million workers in line with those in most other states.

"The court decision changed the way we handled claims for some 75 years," said Thomas P. O'Reilly, a former state senator from Prince George's County who is chairman of the state Workers Compensation Committee. The committee tracks claims and hears appeals contested by employers.

Until Harris' case in June before the Maryland Court of Appeals, those injured in the regular course of their workday were not automatically covered under workers' compensation. Their injuries had to occur as a result of an "unusual" event, such as carrying especially heavy boxes of detergent or landing under a falling box.

Attorneys for Harris' employer, the Howard County Board of Education, argued that Harris should not be eligible for workers' compensation because carrying boxes was part of her normal duties. Her back pains weren't caused by an accident on the job, the employer's attorneys said.

Appellate Judge John C. Eldridge said in his opinion that lower courts had erroneously constricted worker eligibility for coverage when the law did not require it. "Ms. Harris, both as a matter of common sense and as a matter of law, suffered a covered accidental personal injury," he wrote.

Those denied benefits must use their own medical coverage and sick leave - if they have earned it - when they are injured. Legislatures around the nation are considering ways to tighten workers' compensation and to deny coverage for workers who might not have been injured on the job, but not to the extent of Maryland's previous practice, some experts said.

"No one is bringing back the accident, or unusual event, test that most states other than Maryland abandoned more than 30 years ago," said Michael Hayes, a professor at the University of Baltimore School of Law. "They are asking for more proof there is an injury and setting a higher standard of proving it really happened at work. They're asking for more proof that medical expenses are required."

Workers' compensation claims around the country are down, possibly because job growth has lagged behind other segments of economic recovery, experts said. Further, high-risk manufacturing jobs historically generated claims at a higher rate than other areas of employment, but more of those jobs have moved overseas.

The decline in claims has been offset by sharply rising health care costs. California, Texas and Florida are among states where insurance premiums have skyrocketed. Maryland, which limited some long-term benefits for injured workers in the 1980s, is still generally considered a low-cost health care state.

Two major areas of claims that have emerged are repetitive-stress injuries such as carpal tunnel syndrome and back pain. Both are often difficult to pinpoint as resulting from an "unusual event" at work, even if the condition has been aggravated on the job. Those injuries are also more prevalent in a society with a bulge of older workers, many of whom regularly use computer keyboards on the job.

Maryland might seem to be behind the times in the Harris case, but it was at the forefront of workers' compensation in 1914 when state lawmakers reacted to the rise of industrialization. The state was the first in the nation to create a system of benefits to protect workers and companies.

By the 1920s, court interpretations led to some workers' being denied compensation benefits if their injuries weren't traceable to events on the job.

The law was not evenly applied, critics said.

"The erroneous judicial insertion into the Workers Compensation Act of the 'unusual activity' requirement has not been uniformly followed by this court, has been inconsistently applied and has treated differently employees who were injured under similar circumstances," Judge Eldridge wrote last summer. "The 'unusual activity' requirement for workers' compensation coverage should be abandoned."

What the eventual impact of his ruling might be isn't yet clear. Some insurers and labor advocates expect little or no impact because injured workers and their lawyers often are able to describe a specific event. But some insurers and businesses contend that new claims will cost millions of dollars.

The state Workers Compensation Commission estimates that 15 percent to 20 percent of the 900 claims denied each year by the board - of 28,500 claims recorded - might now be covered.

"I would express concern if we saw a big increase in claims, but we haven't," O'Reilly said. "We'll continue to monitor the situation."

The National Council on Compensation Insurance, a trade group whose members provide two-thirds of workers' compensation insurance to Maryland employers, also doesn't expect a major impact. Many of its insurers had already been compensating so-called Harris claims in all states where they offer policies.

But officials of the Injured Workers' Insurance Fund, a state-chartered insurer of last resort for businesses in Maryland, warned at a recent Senate Finance Committee hearing that hundreds of workers received some medical benefits but did not file a formal claim because they missed little work. They cost money but are not counted in the commission's statistics.

IWIF has paid $1.9 million to 600 workers who it says became eligible in the past six months.

"We felt Harris changed the law and we had to abide by it," said Thomas L. Bromwell, a former Baltimore County state senator who heads the fund. "The No. 1 concern for small businesses is not taxes, it's insurance. This will hit the industry. There is a cost."

Bromwell said the costs to IWIF, which insures about one-third of the market in Maryland, are expected to grow more than 7 percent from the Harris decision, contributing to a 3 percent premium increase this year.

It raised rates 11 percent last year before the Harris decision because of increased costs.

Some local governments, which often self-insure, also are worried about the new interpretation.

Baltimore County has reported 105 newly eligible cases, and Maryland counties overall are reporting an average of 5 percent more claims for the second half of last year than in the comparable period in 2002.

Suzanne Berger, an assistant Baltimore County attorney, called it "the tip of the iceberg." .

The Maryland Chamber of Commerce is supporting bills in the legislature that would limit eligibility for workers to pre-Harris standards.

It is also promoting legislation to create a panel of physicians to handle workers' compensation cases. The panel would have an "aggressive, more sports medicine-style approach to getting a person back to his job," said Heather D. Hamilton, a chamber vice president.

Robert E. McGarrah Jr., a senior policy analyst for the AFL-CIO in Washington, said employers should be responsible for those hurt on the job, as lawmakers intended in 1914.

"At this point, people are giving you estimates," said McGarrah, who urged a wait-and-see approach. "And you need uniform data. ... We're talking about injured workers."

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