One particular Defense Base Act insurance carrier is cutting off claimants during the middle of the Coronavirus Disease of 2019 (COVID-19) pandemic. You read that right. Of all times to stop paying or drastically reduce weekly indemnity benefits, Starr Indemnity & Liability Company (through its Third Party Administrator, Gallagher Bassett Services) chose now. Worse yet, Starr lacks legitimate legal arguments for cutting benefits. And it is most definitely violating the humanitarian purposes of the Defense Base Act.
Here are a few real-life examples of cases where benefits were drastically reduced or outright suspended during the Coronavirus crisis.
Case #1 involves a Kosovar with Post-Traumatic Stress Disorder. On October 2, 2019, a U.S. defense doctor evaluated Claimant in Kosovo. The defense doctor agreed that Claimant had PTSD, and recommended aggressive treatment. With aggressive treatment, said the defense doctor, Claimant could experience “rapid improvement” in the “next six months.” On April 7, 2020, Starr stopped paying any and all benefits. According to Starr, benefits were “suspended as claimant has reached MMI as of 4/5/2020 per IME.” But, that is not what the defense doctor said in his “IME” report. There was no mention of maximum medical improvement–also known as “MMI.” Also, benefits were cut off even though Starr did not prove the existence of suitable alternative employment. In fact, there is no labor market survey.
Case #2 involves another Kosovar with PTSD. Starr’s defense doctor examined Claimant and confirmed the existence of PTSD. The defense doctor said that Claimant cannot return to work in a war zone, but he can work elsewhere. Starr commissioned a labor market survey from a vocational expert that identified four jobs: two in Kosovo, one in Dubai, and one part-time job in Hong Kong. Starr reduced Claimant’s benefits by two-thirds on March 13, 2020, arguing that Claimant, a Kosovar, can work a full-time job in Hong Kong. Of course, there is no legal requirement that a disabled claimant leave their home for work in another country.
Case #3 involves yet another Kosovar with PTSD. Starr’s defense doctor diagnosed depressive disorder and PTSD related to his work experiences. The claimant had not reached maximum medical improvement. Starr’s vendor, InSpectre Solutions, gave the defense doctor a questionnaire that provided three choices for employability: “(1) The Injured Worker has no work limitations; (2) The Injured Worker is incapable of work; and (3) The Injured Worker is capable of work with the limitation(s)/modification(s) noted bel0w.” The defense doctored not check any of the three boxes, but he did write a statement nest to the modification provision–option (3)–which assigned work restrictions that could be beneficial after medical treatment. Then, Starr sent the doctor a second questionnaire on May 17, 2019. The defense doctor’s answers are internally inconsistent, saying claimant does not need further medical treatment, but that claimant is not yet at maximum medical improvement. Further, when asked whether the claimant–with his PTSD and psychotropic medications– can “return to their prior level of work,” the defense doctor circled “Yes.” The comments attached to the defense doctor’s answer state, “Returning to work can help improve social relationships and alleviate psychological symptoms and concerns.” On March 13, 2020, Starr cut off all benefits, saying that the defense doctor’s May 17, 2019 report “opin[ed] that claimant can return to prior employment without restrictions.” The Division of Longshore and Harbor Workers’ Compensation programs called the controversion “disingenuous.” It recommended reinstatement of benefits. Starr refused that recommendation on March 13, 2020.
There are more examples. But, these three cases demonstrate Starr’s willingness to suspend or significantly reduce benefits during a global pandemic.
There are a couple of legal issues involved with these denials and controversions.
First, Starr ignores the DBA’s different disability classifications. See generally 33 U.S.C. 908; see also Louisiana Ins. Guaranty Ass’n v. Abbott, 40 F.3d 122, 125 (5th Cir. 1994). There are four types of “disability:”
- Temporary total exists when the claimant has not reached maximum medical improvement and cannot perform any work.
- Temporary partial exists when the claimant has not reached maximum medical improvement but can perform work.
- Permanent total exists when the claimant has reached maximum medical improvement but cannot perform any work.
- Permanent partial exists when the claimant has reached maximum medical improvement and can work.
To put it another way, the difference between “temporary” and “permanent” disability is whether the claimant has reached maximum medical improvement. The difference between “total” and “partial” is the claimant’s return to work or the existence of suitable alternative employment. See Abbott, 40 F.3d at 125-27.
In Case #1, MMI was not shown. Therefore, the claimant’s disability is “temporary.” Also, the carrier did not prove the existence of suitable alternative employment. Therefore, the claimant’s disability is also “total.” Even if MMI was shown, benefits would not simply stop. Starr would still have the affirmative duty to prove the existence of suitable alternative employment. See SGS Control Servs. v. Dir., OWCP, 86 F.3d 438, 444 (5th Cir. 1996).
That leads us to the second issue. What is a legitimate labor market survey? Is it legitimate to say that a claimant’s benefits should be cut off or reduced by two-thirds because they might be able to work at a job thousands of miles from their home? No. Not at all. It’s a silly suggestion.
I have written about global labor market surveys, as well as the effect of Coronavirus on global labor market surveys. Even before Coronavirus, global labor market surveys were dubious. Now, global labor market surveys–and, in my opinion, all pre-COVID-19 labor market surveys–are simply worthless. Just consider the present employment climate–in both the U.S. and elsewhere:
- Much of the United States is under stay-at-home orders.
- As of April 9, 2020, 6.6 million U.S. citizens filed for unemployment last week; 16.8 million unemployment claims were filed between March 15 and April 4.
- Balkan countries closed their borders a month ago.
- Entry into Macedonia is limited to citizens and legal residents, and subject to a lengthy quarantine.
- Kosovo imposed a curfew…and coronavirus brought down its government.
- The U.S. Department of Defense stopped foreign and domestic travel.
- Job listings and hirings are down–especially in industries typically seen on labor market surveys.
Yet, Starr is presently suspending or drastically reducing compensation payments under the “disingenuous” guise that these people can return to work in war zones or countries other than their home country. And let’s not forget that many of the forms and letters filed on Starr’s behalf with the U.S. government during this crisis were likely prepared by Starr representatives having to work from home because they are also subject to stay-at-home orders. Those representatives can’t leave the house; but injured workers apparently can leave their country.
Act Like a Human Being:
Starr’s decision to cut benefits for “disingenuous” reasons is not only legally wrong, it’s morally wrong, too.
The Defense Base Act is an extension of the Longshore and Harbor Workers’ Compensation Act. Courts have long recognized the humanitarian and remedial nature of the Act. For example, the Fourth Circuit recently recognized that the Longshore Act is “humanitarian legislation” that afforded workers with “protection” that was “almost universally recognized as necessary in the interest of social justice between employer and employee.” Moody v. Huntington Ingalls Inc., 879 F.3d 96, 100 (4th Cir. 2018).
The humanitarian goals of the Act, the necessary “social justice between employer and employee,” are not furthered by stripping a person of their monetary lifeline during the midst of a global pandemic.
What Can You Do?
If you are cut off, or if your benefits are significantly reduced, what can you do?
- Contact your senators and representatives. You can look up your representative on the House of Representative’s website. You can do the same at the U.S. Senate’s website. (Of course, foreign nationals do not have this option; it is limited to U.S. claimants.)
- Contact the Department of Labor’s Division of Longshore and Harbor Workers’ Compensation. The DLHWC is the government agency that administers the DBA and Longshore Act. Did you know that the DLHWC can revoke a carrier’s authorization to write DBA insurance? Writing DBA insurance policies is a privilege, not a right.
- Contact the media. Surely, cutting off workers’ compensation benefits during a global pandemic under false pretenses warrants a byline.
- Refer your case to the Office of Administrative Law Judges for adjudication once OALJ is able to process referrals again–i.e., once it is not minimally staffed because of COVID-19.