Workers Comp Zone


Recently I became aware of an interesting experiment by the SCIF, the State Compensation Insurance Fund.

Titled the “Injured Worker Incentive Program”, this SCIF program (see link below) promised certain monetary incentives to those who it deemed in compliance with certain benchmarks.

This apparently was a small SCIF program, and inquiries by some of my colleagues have resulted in head scratching by various SCIF attorneys who claimed no knowledge of it. The program may not be getting off the ground at this time.

I’ve heard whispers that this program came to the attention of some at the DWC, but to my knowledge there’s been no public discussion of it.

The July 2018 explanatory letter from SCIF notes that “the sooner injured employees return to work, the sooner they feel better.” The letter explains that this program is established to encourage injured workers “to establish and maintain an active and healthy lifestyle”. As a result, “State Fund is prepared to assist you in your efforts by supplying some fitness equipment which you or your physician may think would be helpful.”

Other benefits of the program included:

• Potential eligibility for a $1,000 payment to those who return to work within 7 days of release by a doctor and who remain employed for 6 months;

• Payments of $500 for maintaining pre-injury weight or $1,000 for losing at least 5% of pre-injury weight;

• Potential monetary payments of $1,500 (compliance with treatment), $1,000 (staying within the MPN), and $1,250 (agreeing with the PTP findings to avoid use of the QME  medical-legal evaluation process);

• Wellness program participation ($500)

These cash awards were noted to be considered taxable income and as a result 1099 forms would be issued by SCIF.

How should we assess this program?

One could argue that experimentation in workers’ compensation may be a good thing. And some of the program’s goals are laudable, i.e. getting people back to work and supporting healthy lifestyles and “wellness”. Extra monetary incentives for workers could possibly be a tool to drive behavior that arguably might lead to some better outcomes.

It’s an issue that the comp community should debate.

However, some of the incentives may be difficult to obtain for some workers (for example, weight loss) despite their attempts to be compliant. And giving monetary awards in an attempt to discourage the QME process appears to burden the use of a statutory option that workers have to challenge the PTP findings. Workers may not understand the choices they are making in return for taking the extra money.

As set forth in the explanatory letter, “State Fund has sole discretion in deciding recipients of incentives. State Fund’s decision is final”. One can imagine that there could be some areas where workers might dispute eligibility determinations.

Would money for these programs come out of the medical cost bucket or out of allocated or unallocated loss cost bucket?

And what if a WCJ demands a med-legal because of the PTP report being insufficient? Or an MPN does not have available doctors? Or the worker attempts to return to work but the employer does not allow them to do so? Some of the incentive rewards are dependent on factors not in control of the worker.

These are some questions that come to mind.

It could be a good thing to inquire into whether and how other states or large businesses are using monetary rewards to promote goals such as maintaining healthy workforces, increase employee attendance, decrease claims, and increase job satisfaction. California could encourage pilot programs in this area. But such programs need to be carefully constructed so they do not penalize some workers.

Here is the memo re the “Injured Worker Incentive Program”:


Stay tuned.

Julius Young