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Appendix D INJURY COMPENSATION SYSTEMS IN THE UNITED STATE S This appendix briefly describes existing injury compensation systems in the United States. Vaccine-related programs include the federal government's handling of the swine influenza situation and California's Department of Health Services Immunization Reaction Program. Workers' compensation, the Federal Black Lung Act, and social security disability compensation are examples of injury- compensation programs not related to vaccines. VACCINE INJURY Federal Legislation P.L. 94-380, effective on August 11, 1976, provides for an exclusive remedy against the United States n for personal injury or death arising out of the administration of swine influenza vaccine under the swine influenza program and based upon the act or omission of a program participant." The statute, its operation, and statistics regarding claims and settlements are discussed in Chapter 6. State Legislation State of California, Department of Health Services Immunization Reaction Program The Immunization Reaction Program provides n for care, including medical, institutional, supportive, and rehabilitative care, necessitated because of severe adverse reactions to any immunization required by state law to be administered to children under 18 years of age. n Compensation for injuries resulting from the administration of state-mandated vaccines (DTP, polio, measles, mumps, and rubella) is provided through the Immunization Adverse Reaction Fund, which lies within the state treasury and is administered by the state department of health. Any severe adverse reaction recognized by a physician as being causally related to a vaccine and requiring hospitalization in an 171

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17Z acute care hospital for three or more consecutive days is covered. A severe adverse reaction is described as "one which manifests itself not more than 30 days after immunization and requires extensive medical care, as defined by regulation of the department.'' Benefits are terminated when no further active, medical, institutional, or rehabilitative care is required, and compensation shall not exceed $25,000. The state may claim reimbursement from third parties for an amount equal to that reimbursed by the state. The program is directly administered by the California Childr ens Service. Under the statute, no person involved in the production or administration of a vaccine to a minor may be held liable for injury, provided the vaccine is state mandated and no willful misconduct or gross negligence is involved. COMPENSATION FOR OTHER INJURIE S Workers' Compensation An analysis of workers' compensation laws in the 50 U.S. states (and in Canadian provinces) has been published by the U.S. Chamber of Commerce.3 Workers employed by the federal government, longshoremen and harbor workers, and those employed by the District of Columbia are covered by separate legislation. The aims of this body of legislation have been summarized by the Chamber of Commerce: In essence, workers' compensation laws hold that industrial employers should assume costs of occupational disabilities without regard to any fault involved. Resulting economic losses are considered costs of production--chargeable, to the extent possible, as a price factor. The laws serve to relieve employers of liability from common-law suits involving negligence.3 Six basic objectives underlie workers' compensation laws. They: 1. Provide sure, prompt, and reasonable income and medical benefits to work accident victims, or income benefits to their dependents, regardless of fault; 2. Provide a single remedy and reduce court delays, costs, and work loads arising out of personal injury litigation; 3. Relieve public and private charities of financial drains--incident to uncompensated industrial accidents; 4. Eliminate payment of fees to lawyers and witnesses as well as time-consuming trials and appeals; 5. Encourage maximum employer interest in safety and rehabilitation through an appropriate experience-rating mechanism; and 6. Promote frank study of causes of accidents (rather than concealment of fault)--reducing preventable accidents and human suffering.3

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173 Most jurisdictions require employers to obtain insurance or prove financial ability to self-insure, i.e., to carry their own financial risk. Operation of the workers' compensation system was evaluated in 1972 by the National Commission of State workmens Compensation Laws and in 1976 by the Inter-Agency Workers Compensation Task Force. Both groups reaffirmed the fundamental objectives of the system but recommended various operational changes to ensure that the laws lived up to their potential. Both Commission and Task Force rejected replacement of state programs with one federal program. Legislation introduced into the U.S. Congress to achieve "minimum standards" has never received sufficient support to move beyond the committee level. Extensive information on the coverage of the laws, benefits provided, administration of the laws, and setting of premium rates are presented in the Chamber of Commerce analysis and in a brief summary prepared by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO).3'4 The Department of Health and Human Services estimated that employers spent slightly more than $22.9 billion in 1981 to insure or self-insure their work-injury risks, or just under $2 per $100 of payroll.3 Questions have been raised regarding the appropriateness of existing legislation--predominantly designed to deal with traumatic injury--for dealing with disease, especially chronic or delayed disease.5~6 In relation to the operation of the laws, a senior official in the AFL-CIO stated: The AFL-CIO has long supported the traditional workers' compensation concept of exclusivity vis-a-vis the workers' employer. The certainty of the compensation payment, weighed against the uncertainty of traditional common law actions and defenses, has been the cornerstone of workers' compensation systems for more than 70 years. There are good reasons for this approach. Experience has shown that where workers have to seek redress against their employers in the courts, the time consumed has been extensive, the outcome uncertain and the awards, when they come, often net the worker very little after lawyer fees and costs. The employer also benefits by knowing the extent of his or her liabilities through the no-fault system. The AFL-CIO would urge one exception to this approach. Companies should not have the shelter and protection of exclusive remedy when occupational illnesses related to toxic substances are the result of willful or intentional misconduct. An employer who knowingly and/or willfully exposes workers to dangerous substances or dangerous conditions should forfeit any entitlement to an exemption from common law tort suits. The severity of the occupational disease problem in the United States requires that every means of encouraging preventive action be employed--including the deterrent effect of possible legal action.7

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174 This testimony also supported replacement of the state workers' compensation laws with federal legislation. The AFL-CIO official said that few workers severely disabled by occupational disease receive benefits from the state systems, and when they do, it is usually only by litigation.7 Black Lung Compensation As described in the U.S. Chamber of Commerce document:3 The Federal Black Lung Act (Title IV of the federal Coal Mine Health and Safety Act of 1969, as amended in 1972, 1978, and 1981) provides benefits for total disability or death caused by respiratory illness attributable to coal mining (black lung disease). The Act is administered by the Division of Coal Mine Workers in the U.S. Department of Labor's Office of Workmen's Compensation Programs and by the Social Security Administration. Effective January 1, 1984, monthly benefits range from $315.60 to 3631.10, computed at 137-1/2 percent of the minimum monthly pay for federal employees, plus an allowance for dependents equal to 50 percent, 75 percent, or 100 percent of the basic benefit, for 1, 2, or 3 or more dependents, respectively. Beneficiaries also receive an annual cost-of-living increase. \ A total of $10 billion in black lung payments have been made to 500,000 claimants from 1969 through 1980. A Black Lung Disability Trust Fund, financed by an excise tax on coal production, was set up by the 1978 amendments to pay claims where the last employment was prior to 1970 or where no responsible coal mine operator has been identified. The fund was in deficit by $22.2 billion as of January 31, 1984, despite 1981 amendments that doubled the coal tax and revised eligibility criteria in an effort to make the fund solvent. Social Security Disability Compensation As described in the U.S. Chamber of Commerce document: 3 The federal Social Security Disability program pays benefits on behalf of disabled workers under age 65 whose disability is expected to last 12 months or result in death. A worker becomes eligible after a minimum period of employment covered by Social Security, measured in calendar quarters. There is a 5-month waiting period. Cash benefits are payable monthly based on wages in covered employment, plus allowances for spouse and children. Effective January 1, 1984, the maximum is $854 for an individual, family maximum $1,281. Cost-of-living increases are payable effective each June.

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175 Benefits are paid out of the Disability Trust Fund, financed from the federal Social Security tax. Combined Social Security Disability and workers' compensation benefits may not exceed 80 percent of "average current earnings" prior to disability. The Omnibus Budget Reconciliation Act of 1981 requires that Social Security disability benefits supplement workers' compensation unless state law provided for a reverse offset on or before February 18, 1981. REFERENCES 1. United States Congress. 1976. P.L. 94-380, National Swine Flu Immunization Program of 1976. Effective August 12, 1976. 2. State of California. 1977. California: Health and Safety Code, Division 1, Part 1, Chapter 2, Ar ticle 14.5 (Health and Safety Code Section 429.35-429.36~. Chamber of Commerce of the United States. 1984. Analysis of Workers Compensation Laws: 1984. Washington, D.C.: Chamber of Co~runerce of the United States. 4. American Federation of Labor and Congress of Industria 1 Organizations. 1984. Workers Compensation and Unemployment Insurance Under State Laws, January 1, 1984. Washington, D.C.: AFL-CIO. 5. Samuel, H. 1984. Testimony before the Subcommittee on Labor, Committee on Labor and Human Resources, U.S. Senate, May 21, 1984, Washington, D.C.. 6. Samuel, H. 1984. The Broken Promise--Certainty, Speed, and Adequacy. Presented at the International Conference on Disability Compensation and Occupational Disease, June 7, 1984, New York, New York. 7. Young, K. 1984. Testimony before the Subco~ranittee on Labor, Committee on Labor and Human Resources, U.S. Senate, May 21, 1984, Washington, D.C.