Workers’ comp deserves more attention

 

Update to this column:  On October 22, 2019, it was announced that Loretta Lopez had been appointed director of the New Mexico Workers’ Compensation Administration (WCA). Lopez was most recently deputy director of the Risk Management at the state’s General Services Department. She is the first woman appointed to head the WCA.

Here’s the column:

When the Lujan Grisham administration announced that all the cabinet positions had been filled, some of us were quite surprised. What about the Worker’s Compensation Administration?

The WCA has had no director since the previous director resigned last December. Deputy director Verily Jones has been acting director ever since. That’s a pretty long stint in an interim position.

By the time you read this, I hope a new director has been appointed. At an August 14 meeting of the Workers’ Compensation Advisory Council, it was announced that candidates for the position had been interviewed, but there was no further word. At least the governor had appointed new members to the Council.

The WCA has always been a stepchild in state government. Most people, regrettably including legislators, don’t know what it’s for. When originally created, the agency was “administratively attached” to the then- Department of Labor, so it was – mistakenly — commonly viewed as a division of that department.

It’s also confusing that the head of the agency is called director, not secretary, and so has not always been treated as a cabinet member.

Not having full authority, Jones has been unable to fill positions requiring a director’s appointment, such as the agency’s general counsel. This has limited the agency’s functioning.

The administration is aware of the WCA. Staff members got their picture taken with the governor at a “Constituent Day” early in August. And somehow a workers’ compensation judge’s reappointment was accomplished, announced August 23. The term of Judge Leonard Padilla was to expire at the end of August. Since Jones did not have authority to reappoint him, we presume there was approval from higher up.

The agency’s reason for existing is that workers’ compensation is an intricate system involving several competing interests. Long experience shows the system has to be regulated to work effectively and fairly.

Workers’ comp covers the cases of workers injured at work, paying for medical care and compensation benefits. Almost all employers are required to have workers’ comp insurance as a condition of staying in business.

The WCA is partly an administrative law court that adjudicates workers’ comp disputes, including mandatory mediation to reduce formal litigation.

The agency’s regulatory functions include enforcing the insurance coverage requirement, maintaining a fee schedule for healthcare services, providing workplace safety services, an ombudsman program to answer the questions of confused injured workers, and other tasks that only make sense if you understand the system, which most people don’t.

No wonder the legislature has made a habit of skimming off some the agency’s money every year.

The WCA is funded by an annoying little tax, called a fee, paid by employers and workers: $2 deducted from paychecks once per quarter matched by $2.30 from the employer, set aside in a earmarked fund. The legislative intent was that revenue will increase as the workforce grows, so the agency can expand to respond to the needs of employers and workers — for example, by employing more ombudsmen or regulatory compliance staff.

Revenue has grown from about $7 million 20 years ago to about $11 million currently. But in the annual budget process, the legislature has never let the agency spend all the money. So a “surplus” was always left, and, year after year, the legislature moved the “surplus” somewhere else. In the last few years, it’s been about $1.5 million annually to the department now called Workforce Solutions, formerly Labor.

The newly reconstituted Advisory Council has adopted a formal resolution asking the legislature to stop this.

I’ve always thought that if the fee generates more money than the legislature thinks the agency needs, the legislature should reduce the fee, rather than misleading the public and giving the “surplus” to somebody else. But far better would be for legislators to understand what this agency does and let it be funded properly to do its job.

Triple Spaced Again, © New Mexico News Services 2019

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