Politicians in Pierre may restrict workers’ right to bring conniving insurers to court. Until now, individuals who’ve been ripped off on worker’s compensation have been able to file suits against their insurance company.
If the law changes, ‘people who are treated in bad faith by insurance companies would have to file complaints with the South Dakota Department of Labor, which oversees the state Division of Insurance.’ According to the Argus Leader, the latter agency didn’t wield the authority to so much as fine insurance companies several years ago.
On top of limiting litigatory options, the proposal would cap the maximum penalty for insurers at $30,000. Under the current system, writes the Argus Leader, companies could be sued for wrongly-withheld benefits as well as damages.
“It’s granting immunity to cheating insurance companies,” says Watertown attorney Seamus Culhane.
And Rapid City lawyer Mike Abourezk, who spoke to the Argus Leader, said the law, if passed, would put the power to punish in the hands of a hierarchical political system easily swayed by the big money found in healthcare.
“You could prove they are committing fraud,” he explained. “They don’t want the courts involved, and they don’t want jurors involved. They want bureaucrats to decide.”
Jake Mordhorst, a former furniture deliveryman from Rapid City, S.D., said the proposal – known formally as Senate Bill 145 – could stop people like him from getting justice.
When Mordhorst was injured on the job in 2011, he claimed worker’s compensation after being knocked unconscious by a falling couch. His insurer paid the benefits until Mordhorst agreed to let a company physician examine him.
The then-20-year old man found himself suddenly cut off from subsistence – the insurer’s physician diagnosed Mordhorst’s injury as an “18-day sprain,” and said any pain he continued to feel must be from another source. It took a court case, petitioning, and a judicial order to force his insurer to resume making payments.
Without the option to sue, says Mordhorst, there’ll be more cases like his, albeit without the option to seek practical legal recourse.
“What they are trying to do is wrong and there should be a punishment if you are trying to manipulate the system and that is what they are doing right now,” he said.
Lobbyists in favor of SB 145 say they’re just trying to save everyone a bit of money.
“It’s an effort to stabilize work compensation rates for our employers across South Dakota and bring some regulatory stability to the worker’s compensation market,” said Drew Duncan, a Risk Administration Services lobbyist.
And SB 145 sponsor, state Sen. Ryan Maher (R-Isabel), seems to think attorneys are only fighting back against his bill because taking away worker’s compensation claims would pull the carpet out from under their feet.
“The lawyers are going to hate this because this is their gravy train,” said Maher, speaking from a state which hardly has the departmental manpower to independently investigate insurers for fraud.