Vocational RehabilitationThe Voucher

Future Earning Capacity

Presented By:

Barbara Elliott, MA

Elliott & AssociatesRIMS – San Diego

April 24, 2008

Vocational RehabilitationVocational Rehabilitation

►► The purpose of Vocational Rehabilitation The purpose of Vocational Rehabilitation was to provide assistance with returning was to provide assistance with returning

an an injured worker to self-sufficiency as quickly injured worker to self-sufficiency as quickly as possible. as possible.

►► VR provided a transition from medical VR provided a transition from medical treatment to return to worktreatment to return to work

►► The end point of healthcare – people The end point of healthcare – people aren’t aren’t better until they are back to workbetter until they are back to work

The End…The End…

Vocational rehabilitation was eliminated as Vocational rehabilitation was eliminated as a mandatory benefit under workers’ a mandatory benefit under workers’ compensation as of dates of injury compensation as of dates of injury 1/1/20041/1/2004

Settlement of VR began as of 1/1/2003Settlement of VR began as of 1/1/2003

Vocational Rehabilitation Vocational Rehabilitation Sunset ClauseSunset Clause

139.5 (l) This section shall remain in effect 139.5 (l) This section shall remain in effect only until January 1, 2009, and as of that only until January 1, 2009, and as of that date is repealed, unless a later enacted date is repealed, unless a later enacted statute, that is enacted before January 1, statute, that is enacted before January 1, 2009, deletes or extends that date.2009, deletes or extends that date.

Until the Sunset…Until the Sunset…

Close review of proper NoticesClose review of proper Notices

Increased demands for vocational Increased demands for vocational rehabilitation by applicant for pre-2004 rehabilitation by applicant for pre-2004 cases to create a “record of demand”cases to create a “record of demand”

Increased litigation for 100% PD based on Increased litigation for 100% PD based on “non –feasible”“non –feasible”

The CURRENT hot issue…The CURRENT hot issue…

Potential increase in PD due toPotential increase in PD due to

““vocational feasibility” issuesvocational feasibility” issues

AKAAKA

LeBoeuf!LeBoeuf!

What is “Vocational Feasibility?”What is “Vocational Feasibility?”

§4635(a) “Qualified injured worker” means an employee§4635(a) “Qualified injured worker” means an employeewho meets both of the following requirements:who meets both of the following requirements:

1)The employee’s expected permanent disability as a 1)The employee’s expected permanent disability as a result of the injury, whether or not combined with the result of the injury, whether or not combined with the effects of a prior injury or disability, if any, permanently effects of a prior injury or disability, if any, permanently precludes, or is likely to preclude, the employee from precludes, or is likely to preclude, the employee from engaging in his or her usual occupation or the position engaging in his or her usual occupation or the position in which he or she was engaged at the time of injury, in which he or she was engaged at the time of injury, hereafter referred to as “medical eligibility.”hereafter referred to as “medical eligibility.”

2)The employee can reasonable be expected to return 2)The employee can reasonable be expected to return to suitable gainful employment through the provision of to suitable gainful employment through the provision of vocational rehabilitation services, hereafter referred to vocational rehabilitation services, hereafter referred to as “vocational feasibility.”as “vocational feasibility.”

Process for determining Vocational FeasibilityProcess for determining Vocational Feasibility

The QRR's determination of vocational feasibility may include the following The QRR's determination of vocational feasibility may include the following steps: steps:

(1) an initial evaluation meeting; (1) an initial evaluation meeting;

(2) an assessment of existing employment skills; (2) an assessment of existing employment skills;

(3) consideration of the current physical limitations and work restrictions (3) consideration of the current physical limitations and work restrictions contained in the medical record; contained in the medical record;

(4) an assessment of the injured employee's perception of his or her (4) an assessment of the injured employee's perception of his or her physical capacities; physical capacities;

(5) an identification of vocational strengths; (5) an identification of vocational strengths;

(6) an identification of factors that may prevent or enhance participation in (6) an identification of factors that may prevent or enhance participation in vocational rehabilitation services; and vocational rehabilitation services; and

(7) the use of vocational testing and/or work evaluation services when (7) the use of vocational testing and/or work evaluation services when appropriate. appropriate.

California Rules and Regulations California Rules and Regulations §10124.1§10124.1

LeBoeufLeBoeufThis is being hotly contested in San

Diego…keep an eye on any case

pre 2004

After the sunset…After the sunset…Who knows…Who knows…

case law may develop where the employer case law may develop where the employer becomes obligated for VR services beyond the becomes obligated for VR services beyond the sunset…sunset…

BUT at this time, as of 1/1/2009, there will be BUT at this time, as of 1/1/2009, there will be NO requirement to provide VR as the statute NO requirement to provide VR as the statute ceases to exist…ceases to exist…

Who knows what will happen with pre-2004 and Who knows what will happen with pre-2004 and failure to Notice issues…failure to Notice issues…

Next…Next…

Injuries on or after 1/1/2004Injuries on or after 1/1/2004

Vocational rehabilitation may be “gone” Vocational rehabilitation may be “gone” but the importance of investigating but the importance of investigating

modified or alternate work is stronger modified or alternate work is stronger than ever…than ever…

Where will all the people go…Where will all the people go…

To the EEOC…85% of claims filed start with workers’ compensation

To FEHA…and there are NO caps on awards, damages…

Wrongful termination…

Post 2004 FormsPost 2004 Forms DWC 10003 Offer of Regular WorkDWC 10003 Offer of Regular Work

DWC 10005 Request for Reimbursement of DWC 10005 Request for Reimbursement of Accommodation ExpensesAccommodation Expenses

DWC 10133.53 Notice of Offer of Modified or DWC 10133.53 Notice of Offer of Modified or Alternative WorkAlternative Work

DWC 10133.55 Request for Dispute ResolutionDWC 10133.55 Request for Dispute Resolution

DWC 10133.52 Notice of Potential Right to DWC 10133.52 Notice of Potential Right to Supplemental Job Displacement Benefit FormSupplemental Job Displacement Benefit Form

DWC 10133.57 Supplemental Job Displacement DWC 10133.57 Supplemental Job Displacement Nontransferable Training Voucher FormNontransferable Training Voucher Form

Maximum Medical Improvement Maximum Medical Improvement (aka Permanent & Stationary)(aka Permanent & Stationary)

At point of MMI, and assuming TD stops at At point of MMI, and assuming TD stops at the same time, the claims administrator the same time, the claims administrator has 10 days to send Notice of Potential has 10 days to send Notice of Potential Right to the SJDB, even if the employee Right to the SJDB, even if the employee has RTW with the employer (10153.51)has RTW with the employer (10153.51)

Notice of Offer of Regular WorkNotice of Offer of Regular WorkDWC 10003DWC 10003

Due to employee within 60 days of MMI for Due to employee within 60 days of MMI for PD adjustment PD adjustment

Valid for PD reduction for employers 50+ Valid for PD reduction for employers 50+ regardless if employee accepts or rejectsregardless if employee accepts or rejects

Must be reasonable commuting distance Must be reasonable commuting distance from residence at time of injury & same from residence at time of injury & same wageswages

Modified or Alternate WorkModified or Alternate Work

For post 2004 DOI, For post 2004 DOI, the employer has 30 the employer has 30 days from the days from the termination of TD to termination of TD to offer modified or offer modified or alternative workalternative work

The employer must The employer must use the mandated use the mandated format set forth by the format set forth by the AR’sAR’s

DWC 10133.53DWC 10133.53 Notice of Offer of Modified or Notice of Offer of Modified or

Alternative WorkAlternative Work

Similar to the RU 94 used for DOI 1994 through Similar to the RU 94 used for DOI 1994 through 12/31/200312/31/2003

Contains language as to job duties, wages and Contains language as to job duties, wages and moremore

2 page form and is MANDATORY and filed with 2 page form and is MANDATORY and filed with DWCDWC

Modified WorkModified Work

Modification includes, but is not limited to, changing or Modification includes, but is not limited to, changing or excluding certain tasks, reducing the time devoted to excluding certain tasks, reducing the time devoted to certain tasks, modifying the work station, changing the certain tasks, modifying the work station, changing the work location, and providing helpful equipment or tools. work location, and providing helpful equipment or tools.

AR AR §§1012210122

Meets the same requirements as Alternative WorkMeets the same requirements as Alternative Work

Alternative WorkAlternative Work

The employee has the ability to perform the The employee has the ability to perform the essential functions of the job providedessential functions of the job provided

The job provided is in a regular position lasting The job provided is in a regular position lasting at least 12 monthsat least 12 months

The job provided offers wages and The job provided offers wages and compensation that are at least 85% of those compensation that are at least 85% of those paid at the time of injurypaid at the time of injury

The job is located within reasonable commuting The job is located within reasonable commuting distance of the employee’s residence at the time distance of the employee’s residence at the time of injury……. of injury……. AR §10133.50AR §10133.50

A DECREASE of 15% in the weekly PD A DECREASE of 15% in the weekly PD payment to injured employees whose payment to injured employees whose employers employers DODO offer/provide medically offer/provide medically appropriate work. appropriate work.

Not retroactive to the date TD ceased. Not retroactive to the date TD ceased.

The overall PD Rating is not affected.The overall PD Rating is not affected.

PD Award AdjustmentPD Award AdjustmentApplies to Employers of 50 or moreApplies to Employers of 50 or more

An INCREASE of 15% in the weekly PD An INCREASE of 15% in the weekly PD payment to injured employees whose payment to injured employees whose employers do employers do notnot offer/provide medically offer/provide medically appropriate work.appropriate work.

Not retroactive to the date TD ceased. Not retroactive to the date TD ceased. The overall PD rating is not affected. The overall PD rating is not affected.

AR 10001 - 10005AR 10001 - 10005

Return to Work Program shall be funded by the Return to Work Program shall be funded by the Return to Work Fund which shall consist of all Return to Work Fund which shall consist of all penalties collected pursuant to Labor Code penalties collected pursuant to Labor Code section 5814.6 and transfers made to this fund section 5814.6 and transfers made to this fund by the Administrative Director from the Workers’ by the Administrative Director from the Workers’ Compensation Administrative Revolving Fund…Compensation Administrative Revolving Fund…

LC 139.48 and Admin regs 10004 & 10005LC 139.48 and Admin regs 10004 & 10005

Ergonomic ReimbursementsErgonomic ReimbursementsDWC 10005DWC 10005

$1,250 to accommodate each temporarily disabled employee, for $1,250 to accommodate each temporarily disabled employee, for expenses incurred in allowing such employee to perform modified or expenses incurred in allowing such employee to perform modified or alternative work within physician-imposed temporary work alternative work within physician-imposed temporary work restrictions; and restrictions; and

$2,500 to accommodate each permanently disabled employee, for $2,500 to accommodate each permanently disabled employee, for expenses incurred in returning such employee to sustained modified expenses incurred in returning such employee to sustained modified or alternative work within physician-imposed permanent work or alternative work within physician-imposed permanent work restrictions; restrictions;

However, if an employer who has received reimbursement for a However, if an employer who has received reimbursement for a temporarily disabled employee under paragraph (1) is also temporarily disabled employee under paragraph (1) is also requesting reimbursement for the same employee for requesting reimbursement for the same employee for accommodation of permanent disability, the maximum available accommodation of permanent disability, the maximum available reimbursement is $2,500. reimbursement is $2,500.

What if there is not What if there is not Modified or Alternate Work?Modified or Alternate Work?

The injured employee is then eligible to The injured employee is then eligible to receive the Supplemental Job receive the Supplemental Job Displacement Voucher Benefit.Displacement Voucher Benefit.

Supplemental Job Displacement Supplemental Job Displacement Voucher BenefitVoucher Benefit

The “Voucher” was The “Voucher” was created in AB 227 to created in AB 227 to replace vocational replace vocational rehabilitation for those rehabilitation for those injured after 1/1/2004injured after 1/1/2004

LC LC §§4658.5 4658.5

What is the Voucher?What is the Voucher?

“ “If the injured employee does not return to If the injured employee does not return to work for the employer within 60 days of work for the employer within 60 days of the termination of temporary disability, the the termination of temporary disability, the injured employee shall be eligible for a injured employee shall be eligible for a supplemental job displacement benefit in supplemental job displacement benefit in the form of a nontransferable voucher for the form of a nontransferable voucher for education-related retraining or skill education-related retraining or skill development, or both, at state approved or development, or both, at state approved or accredited schools…”accredited schools…”

Voucher NoticeVoucher Notice The employee is noticed within 10 days of The employee is noticed within 10 days of

the end of TTD of Rights by certified mailthe end of TTD of Rights by certified mail The Notice includes information about The Notice includes information about

potential of modified or alternate work offer potential of modified or alternate work offer within 30 dayswithin 30 days

The Notice must contain information as to The Notice must contain information as to the voucher amountsthe voucher amounts

This is a MANDATORY notice set forth in This is a MANDATORY notice set forth in AR AR §10133.57§10133.57

Voucher Values Based on Voucher Values Based on Permanent Partial Disability Permanent Partial Disability

AwardsAwards

Up to $4,000 for < 15%Up to $4,000 for < 15% Up to $6,000 for between 15% and 25%Up to $6,000 for between 15% and 25% Up to $8,000 for between 26% and 49%Up to $8,000 for between 26% and 49% Up to $10,000 for between 50% and 100%Up to $10,000 for between 50% and 100%

What the Voucher What the Voucher cancan pay for: pay for:

Tuition, fees, books and other expenses Tuition, fees, books and other expenses required by the school for retraining or required by the school for retraining or skills enhancementskills enhancement

Up to 10% of the Voucher can be for Up to 10% of the Voucher can be for VRTWC fees (a counselor)VRTWC fees (a counselor)

Does NOT provide weekly living allotment, Does NOT provide weekly living allotment, mileage, child care and other costsmileage, child care and other costs

Voucher PaymentVoucher Payment WHEN they get paid – 25 days after finding of WHEN they get paid – 25 days after finding of

PPD by the JudgePPD by the Judge

Upon submission of receipts or directly to an Upon submission of receipts or directly to an approved training facility, school must have state approved training facility, school must have state accreditation or approvalaccreditation or approval

Reimbursement by the claims administrator Reimbursement by the claims administrator must be within 45 calendar days of receipt of must be within 45 calendar days of receipt of documentationdocumentation

There is NO EXPIRATION date on the voucherThere is NO EXPIRATION date on the voucher

Settlement of the VoucherSettlement of the Voucher

AR AR §10133.52 states that the potential §10133.52 states that the potential eligibility for the voucher may be settled eligibility for the voucher may be settled as part of a compromise and release as part of a compromise and release settlement for a lump sum payment.settlement for a lump sum payment.

Settlement of the voucher must be Settlement of the voucher must be approved by a Judge and set forth on C&Rapproved by a Judge and set forth on C&R

When Employer NOT liable for When Employer NOT liable for VoucherVoucher

When the employee has been released to When the employee has been released to return to usual & customary and the Offer return to usual & customary and the Offer of Regular Work is completedof Regular Work is completed

When an offer of modified or alternative When an offer of modified or alternative work has been made within 30 days of the work has been made within 30 days of the termination of TDtermination of TD

Liability for provision of the Voucher ends:Liability for provision of the Voucher ends:

SettlementSettlement

All $$ spent, could be in bits over yearsAll $$ spent, could be in bits over years

Claimant diesClaimant dies

There is no form for termination of the Voucher!There is no form for termination of the Voucher!

Other CircumstancesOther Circumstances

Employee has multiple dates of injuryEmployee has multiple dates of injury Seasonal employees Seasonal employees Out of state – Employee has movedOut of state – Employee has moved Terminated Employee Terminated Employee Undocumented WorkersUndocumented Workers Disputes raised by the employeeDisputes raised by the employee

Seasonal EmployeesSeasonal Employees

AR AR §10133.60 (a)(1)(A)§10133.60 (a)(1)(A)

Offer of modified or alternative employment Offer of modified or alternative employment must be on a similar seasonal basis to the must be on a similar seasonal basis to the employee’s previous employmentemployee’s previous employment

Therefore, for modified or alternative Therefore, for modified or alternative employment to meet AR, the employee has to employment to meet AR, the employee has to return on the same schedule as prior to DOIreturn on the same schedule as prior to DOI

Out of StateOut of State

The employee may move out of state for a variety of reasons. Once eligible for the voucher, they remain eligible. The schools or training must be accredited by a parallel organization.

Terminated EmployeesTerminated Employees

If terminated after a return to work, and If terminated after a return to work, and terminated for CAUSE, then most likely terminated for CAUSE, then most likely not eligible for the voucher (but may get a not eligible for the voucher (but may get a PD payment increase)PD payment increase)

If terminated while on TTD, must still If terminated while on TTD, must still follow determination procedures and follow determination procedures and processes for modified or alternate workprocesses for modified or alternate work

Undocumented WorkersUndocumented Workers

If the employer was aware the employee If the employer was aware the employee was undocumented, the employee would was undocumented, the employee would be eligible for the voucherbe eligible for the voucher

If the employer was not aware, and the If the employer was not aware, and the employer can offer modified or alternate employer can offer modified or alternate work, the employer would NOT be work, the employer would NOT be obligated for the voucherobligated for the voucher

DWC 10133.55 Request for DWC 10133.55 Request for Dispute ResolutionDispute Resolution

If the employee has any disputes If the employee has any disputes regarding return to work either regular, regarding return to work either regular, modified or alternative, refer them to the modified or alternative, refer them to the DWC for Dispute ResolutionDWC for Dispute Resolution

DWC 10133.55 Request for Dispute DWC 10133.55 Request for Dispute Resolution to be filedResolution to be filed

Next…..Next…..

Future Earning CapacityFuture Earning Capacity

Disability RatingDisability Rating

1 - AMA Guides whole person impairment

(WPI) rating determined by physician

2 - WPI rating adjusted for age, occupation, and FEC to determine final permanent disability rating

Future Earning Capacity FECFuture Earning Capacity FECLabor Code section 4660(b)(2) states:

“An employee’s diminished future earning capacity shall be a numeric formula based on empirical data and findings that aggregate the average percentage of long-term loss of income resulting from each type of injury for similarly situated employees”

Labor Code section 4660(c) notes that the 2005Schedule “shall be prima facie evidence.

Costa v. Hardy Diagnostic and State CompensationInsurance Fund (2006, 2007), the (WCAB) stated that the California Legislature intent was to allowrebuttal evidence regarding the Rating Schedule andthat the effect of such evidence will likely be decidedon a case by case basis…and the DFEC evaluation by the applicants needed to be paid for by thedefendants.

Van de Bittner, 2007

Empirical FormulaEmpirical Formula

3 or 4 formulas have been developed by 3 or 4 formulas have been developed by vocational experts to determine DFEC in vocational experts to determine DFEC in California.California.

A function of work life pre and post injury, A function of work life pre and post injury, factored into earnings pre injury and factored into earnings pre injury and estimated return to work wages, estimated return to work wages, considering time off work and time needed considering time off work and time needed to return to work….to return to work….

Quick Case ReviewQuick Case Review

Of 20 cases where the use of a Diminished Of 20 cases where the use of a Diminished Earning Capacity evaluation was Earning Capacity evaluation was presented:presented:

15: Defendants ordered to pay applicant’s 15: Defendants ordered to pay applicant’s DFEC evaluation DFEC evaluation

12: Expert’s opinion used to rebut PD 12: Expert’s opinion used to rebut PD Rating Rating

Van de Bittner, 2007Van de Bittner, 2007

So…you decide…So…you decide…

Work with applicant side to AGREE to an expert Work with applicant side to AGREE to an expert to compile ONE Diminished Earning Capacity to compile ONE Diminished Earning Capacity EvaluationEvaluation

Ignore and hope it goes awayIgnore and hope it goes away

An old Chinese proverb. . . .

“The older I get, the less I know, but the

wiser I am.”

The BEST way out of this…The BEST way out of this…

Effective return to Effective return to work programs work programs that minimize or that minimize or eliminate TD, eliminate TD, protracted claims, protracted claims, litigation and litigation and disgruntled disgruntled employees!employees!

Disability Discrimination AwardsDisability Discrimination Awards(Employment: Practice Liability - Jury Verdict Research - LRP Publications - (Employment: Practice Liability - Jury Verdict Research - LRP Publications -

2004)2004)

State MedianState Median

$194,245$194,245

Federal MedianFederal Median

$250,000$250,000

Compensatory AwardsCompensatory Awards(Employment: Practice Liability - Jury Verdict Research - LRP Publications - 2004)(Employment: Practice Liability - Jury Verdict Research - LRP Publications - 2004)

AverageAverage Disability Disability AwardAward in in State CourtsState Courts

$365,444$365,444

Total RangeTotal Range

$200 - $4,545,000$200 - $4,545,000

Merck / Rutgers StudyMerck / Rutgers Study(J. Douglas Phillips, Director of Corporate Planning, Merck & Co.)

As % of annual salary:As % of annual salary:

Hourly = 75%Hourly = 75%

Management = 150%Management = 150%

Employee replacement cost

Merck / Rutgers StudyMerck / Rutgers Study((J. Douglas Phillips, Director of Corporate Planning, Merck & Co.)J. Douglas Phillips, Director of Corporate Planning, Merck & Co.)

Time for employee to reach 100% Time for employee to reach 100% productivity:productivity:

<<13 months/new employee13 months/new employeetaking 30-36% of co-workers’ timetaking 30-36% of co-workers’ time

Employee replacement cost

Average cost (JAN) $935

Median cost (JAN) $200

Employer study $230

Source: Job Accommodation Network

The Cost of Accommodations

Job AnalysisJob AnalysisThe Key to Cost ContainmentThe Key to Cost Containment

Determination by employer of transitional workDetermination by employer of transitional work

Determination of return to work full dutyDetermination of return to work full duty

Determination of permanent modifications Determination of permanent modifications

Determination of proper occupational IDDetermination of proper occupational ID

Critical to an effective Interactive ProcessCritical to an effective Interactive Process

WHY a JA?WHY a JA?

The best tool…The best tool…

To open up communication between the To open up communication between the employee and employeremployee and employer

To obtain accurate information and start To obtain accurate information and start the claim rightthe claim right

To facilitate a decision by the doctor that is To facilitate a decision by the doctor that is based on factbased on fact

Question:Question: How can a doctor state in a report that an How can a doctor state in a report that an individual cannot return to regular job duties if there individual cannot return to regular job duties if there is not an objective, clear, agreed upon analysis of is not an objective, clear, agreed upon analysis of what those duties are?what those duties are?

Question:Question: How can an employer effectively How can an employer effectively determine an employees status to return to without determine an employees status to return to without regular job duties if there is not an objective, clear, regular job duties if there is not an objective, clear, agreed upon analysis of what those duties are?agreed upon analysis of what those duties are?

Question: Question: What is the first piece of information the What is the first piece of information the EEOC and the DFEH will ask for in an employment EEOC and the DFEH will ask for in an employment discrimination matter?discrimination matter?

ResourcesResourcesJob Accommodation NetworkJob Accommodation Network: : http://http://

www.jan.wvu.eduwww.jan.wvu.edu// The Searchable Online The Searchable Online Accommodation Resource (SOAR), which can Accommodation Resource (SOAR), which can be accessed at be accessed at www.jan.wvu.eduwww.jan.wvu.edu/soar/soar, allows , allows you to locate accommodation options for a you to locate accommodation options for a worker with a disability by providing information worker with a disability by providing information on disabling conditions, accommodation on disabling conditions, accommodation products and techniques. products and techniques.

Division of Workers’ Compensation:Division of Workers’ Compensation: http://http://www.dir.ca.gov/dwc/dwc_home_page.htmwww.dir.ca.gov/dwc/dwc_home_page.htm for for forms, information, labor code and fact sheets.forms, information, labor code and fact sheets.