remaining payments are made to dependents, or if there are no dependents, for funeral expenses One justification for the distinction could be that the fund is specifically designed to further certain beneficial policies and must be conserved to accomplish these goals Whatever appeal this position may have, it seems to this Commission to be outweighed by the inequities inherent in the fund attempting to capitalize on a fortuitous tragedy The employee's family should not be penalized because the source of the employee's workmen's compensation benefits differs from another employee similarly situated. In any event, the employee, under our new proposal, will not be receiving any benefits from the fund and he therefore will have no need for any vested rights. The employee will receive all his benefits from his employer and be subject to the provisions of NJSA 34 15-12e Accordingly, it is recommended that NJ.S.A. 34:15-95.2 be abolished 5. Medical Benefits Currently, the fund does not apply to medical or rehabilitation benefits even though they may amount to substantial sums Logically, to include medical and rehabilitation coverage within the fund would seem to further the purposes of the statute. The employer would know that if he hired the handicapped and an injury ensued, he could be relieved of some of the impairment benefits and the medicalrehabilitation expense Apportionment of responsibility may be a problem, but there is no reason why the 104 week rule as modified could not be applied across the board. For example, the employer would be responsible for all benefits, in accordance with the Act. After the first 104 weeks, or impairment benefits for the subsequent injury, the fund would be available for the employer's reimbursement. In view of the intention to give the Division greater power of supervision over rehabilitation and medical services (see above at page 34) the Commis sion feels that there is little chance of employers or carriers delaying medical or rehabilitation benefits until after 104 weeks. Accordingly, it is recommended that the Second Injury Fund be further expanded to include medical-rehabilitation expenses H. Conclusions The recommendations made herein are not in substantial conflict with many of the Second Injury Fund revisions which have been proposed regularly since 1964. As an example, reimbursement procedures were proposed in S282 (1969). A273 (1970), A379 (1970), A953 (1972) and $45 (1972). Expansion of the fund to cover permanent partial and death was proposed in S282 (1964). A407 (1970), $193 (1970), A273 (1970), A379 (1970), A953 (1972) and S45 (1972). The State was added as a contributor in A365 (1969) and A216 (1970). The 104 week rule was first proposed in A282 (1964) The hindrance to employment test was phrased slightly differently but proposed in $282 (1964), A273 (1970), A379 (1970), A953 (1972) and $45 (1972). In view of the fact that none of these revisions ever became law, this Commission has made an effort to justify each conclusion reached It is felt that these recommendations together with our other recommendations, particularly those dealing with permanent injuries, will cure the fund abuses. It is difficult to assess the impact of these recom mended changes upon the Second Injury Fund court calendar. Certainly expanding the coverage as recommended will increase the number of cases brought under the fund. However, there will be no unneces sary delays for the employee and the recommended reimbursement procedure has removed these cases from the ordinary hearing list. They should be more easily resolved with much less consumption of time. The end result should benefit all of the parties involved PART V I. The Need for Safety Services Testifying before this Commission, an employee who was partially blinded by a work-related injury stated that accident prevention was the most important service a Workmen's Compensation agency could render. However, in New Jersey the Division of Workmen's Compensation does not provide any accident prevention services. Whatever reputation for safety the Division has acquired derives largely from the work of the Department of Labor and Industry's Bureau of Engineering and Safety. The Division of Workmen's Compensation is largely unaware of the operations of the Bureau of Engineering and Safety and, according to the Bureau, in the past 6 years there has been no coordination We recommend that the Division of Workmen's Compensation become more active in accident prevention services, since encouragement of safety is one of the basic objectives of a modern workmen's compensation program II. The Division's Role A. Coordination and Data Collection New Jersey's Workmen's Compensation system could make a contribution in encouraging the reduction of injuries, diseases and deaths in conjunction with Federal and State governments, insurers, employers, unions, safety consulting firms and nonprofit organizations. One service the Division could perform is to coordinate the various safety efforts relating to work-connected injuries, diseases and deaths. It should begin with a proper collection of important data Combined studies could be mounted to support safety programs and improve conditions under which our employees work Furthermore, the Director of the Division should consider meshing the reporting forms he will require with those of the Occupational Safety and Health Act of 1970 to permit the exchange of safety information between Federal and State agencies in accor dance with R 5.1 of the National Commission Report (see Part VI, for discussion of reporting). The data to be collected by the Division could also be of assistance in its efforts to audit accident prevention services of carriers and self-insurers and to encourage carriers to devote reasonable safety efforts to smaller firms in accordance with R. 52, which we have recommended adopting The Division should publish the results of the collected data to encourage engineering which could reduce work accidents and also to educate all em ployers and employees in their safety responsibilities Efforts should be made to publish the data in an interesting, readable fashion. For example, the Oregon Workmen's Compensation agency employs an artist who is responsible for illustrating reports and producing informative posters for safety campaigns The Processing of Workmen's Compensation Cases-Bulletin 310, page 28 B. Enforcement of Good Safety Practices Besides safety engineering and employer and employee education, the Division should be interested in enforcement of good safety practices. Here coordination between the Division and the Bureau of Engineering and Safety would seem most important 1. Rate-making and Safety Encouragement compensation was that the imposition of costs on individual employers can help reduce accidents. The Processing of Workmen's Compensation Cases-Bulletin 310, page 32 The National Commission recognized that the present method of setting workmen's compensation rates does not provide smaller firms with a significant incentive to improve their safety practices They therefore recommend at R. 5.3 and R 54 of their Report that, subject to sound actuarial standards, experience rating be extended to as many employers as practical and that the relationship between an employer's favorable experience relative to the experience of other employers in its insurance classification be more equitably reflected in the employer's insurance charges In response to these recommendations, the Compensation Rating and Inspection Bureau has reduced the qualifying level for experience rating to include an employer paying a $500 premium It has also provided a 5% credit for no accidents and a 25% deficit for sizeable losses. The Compensation Rating and Inspection Bureau feels that these modifications will bring their operation into compliance with R. 5.3 and R 54 of the National Commission Report. The Commission does not know whether the changes will actually result in compliance Since the Commission lacked sufficient time to study ratemaking, we recommend a full review of the subject at a later date. 2. Assigned Risk Plan Another aspect of rate-making which also warrants study is New Jersey's workmen's compensation assigned risk insurance plan. At present under this plan no attempt is made to adjust rates based upon the cause for an employer being placed in the assigned risk category The premium payment is the same whether one becomes a part of the plan for failure to pay premiums or because of too many accidents. If one of the goals of workmen's compensation is to encourage safety by making unsafe employers pay more for their insurance it would seem logical to surcharge unsafe employers in the assigned risk plan However, since this Commission has not fully explored the idea, we suggest that a subsequent Commission study the problem further. III. Conclusion The Division should be one of the major instrumentalities seeking improved safety for workers in New Jersey. Cooperation between the Division and the Bureau of Engineering and Safety is crucial. Since both departments are contained within the Department of Labor and Industry, legislation requiring such cooperation would not seem necessary Should the cooperation not be forthcoming within a reasonable period of time, however, consideration should be given to combining operations under some central control PART VI Structure, Functions, and Procedures of the Division of Workmen's Compensation The Delivery System I. Introduction neces Without an effective delivery system, broad coverage, adequate income maintenance, sary medical care, rehabilitation and safety will be impossible to obtain Furthermore, it is unlikely that any of the reforms suggested in Part III of this report to cure the "permanent partial problem" will be successful without an effective delivery system. Crucial to administering the law is whether the Division is active or passive. An active role begins with the screening of employer first reports and continues with review of all subsequent reports to safeguard the worker's rights whether the case is contested or uncontested. While the Direct Settlement Review Program in New Jersey is an attempt by the Division to become more active, it would appear that the Division is largely passive, and fails to intervene unless there is conflict From the beginning our system seems to have been married to quasi-judicial procedures in 1911 the first act provided no administrative machinery Berkowitz, page 116 The Workmen's Compensation Division cannot know whether payments are being made promptly, whether medical and rehabilitation needs are being met, or whether the worker has received all he is entitled to unless there is a dispute By this time it may be too late to remedy the actual problem II. Processing of Claims Under the In 1970 the Division handled 59,041 cases. Of the 49.713 permanent partial cases 12,111 were informally disposed of and 31.699 were disposed of through the formal proceeding In 1972 there were 58,085 cases disposed of by the Division of Workmen's Compensation 47.354 permanent partial cases were brought before the Division in 1972 and 31,921 required formal proceedings Only 9,834 permanent partial cases were disposed of informally Of the 283 fatal and 181 permanent total cases, 210 and 179 respectively were disposed of formally A. Excessive Use of Formal Proceedings It is clear from these and other available statistics that most cases within the Division are disposed of formally This situation prevails despite the Division's attempts to encourage the use of informal proceedings by further limiting the fees of attorneys who unnecessarily pursue the formal directly process when the injury is minor or otherwise within the category set forth in the relevent administrative policy directive. Administrative Policy No 3 This problem arises because there is no way an employee can obtain an early determination of liability which will be binding on both parties and which will toll the statute of limitations without resorting to the formal proceeding. It would seem reasonable that if the formal proceeding is resorted to because the employer chose not to accept the informal award, then the burden of pursuing a formal hearing should be upon the employer. In 1970 more than five times as many employers refused the informal award as did employees Under present practice, when the employer does not accept the informal award, a letter is sent to the worker advising him of the rejection and suggesting that his only recourse is to file a formal petition. It is clear that the Division's existing procedural structure is designed to dispose of cases formally and the informal system is merely a non-statutory adjunct to the main business of the Division which is to litigate in a formal forum. "[A] workmen's compensation program in which more than an insignificant minority of claims involve formal contests is aberrant and suggests that the State is not providing adequate protection to workers through the workmen's compensation agency." National Commission Report at page 107 If employers or insurance carriers are bound by our suggested criteria for evaluating impairments and begin direct payments in uncontested claims promptly, and if the personnel of the Division provide adequate assistance to all employees, the number of contested formal cases should decrease substantially B. New Goal of the Division To cure the 'permanent partial problem" and other deficiencies in our existing system, we seek to develop an active Division capable of doing much more than adjudicating claims. "The thrust of the system should be to create an ambience of protection and mediation rather than adjudication." National Commission Report page 101 The Division, among other functions, should publish information about the law, enforce coverage. actively protect the injured worker's rights, supervise medical and rehabilitation services, communi. cate with employers to adjust problems and promote safety and industrial hygiene by analyzing data on accidents, claims and settlements. Somers & Somers, Workmen's Compensation: Prevention Insurance and Rehabilitation of Occupational Disability (NY.. John Wiley & Sons 1954) at p. 143. III. The New Structure Obviously, a new, carefully designed administrative structure with an adequate staff and budget are needed to accomplish these goals. To provide a basic understanding of the recom mended structure, a chart indicating lines of responsibility and a brief descriptive analysis follow: |