Business Insurance

August 6, 2012

TRENTON—Exclusive remedy provisions prevent a New Jersey man from suing his workers compensation insurer over pain and suffering caused by its failure to pay his medical bills, the New Jersey Supreme Court has ruled.

In a 4-1 ruling last week, the court said that New Jersey workers comp law prevents most tort cases against insurers, even if they "intentionally delay making payments that the… court has ordered."

The plaintiff in Wade Stancil vs. ACE USA argued that tort cases should be allowed against "recalcitrant" insurers. But the state Supreme Court said that such companies are held accountable under a 2008 amendment to the workers comp law, which allows courts to find insurers in contempt for failure to comply with orders.

Mr. Stancil injured his neck, back and shoulder while working for textile manufacturer Orient Originals Inc. in 1995, court records show. A New Jersey workers comp court ruled in 2006 that Mr. Stancil was totally disabled by his work accident.

In 2007, a workers comp judge ordered ACE USA to pay Mr. Stancil's medical bills. The judge in that case said ACE USA had a history of failing to make medical payments in workers comp cases and warned the insurer against further violations, court records show.

After ACE USA failed to pay the medical bills by October 2007, the workers comp judge advised Mr. Stancil that he could sue the insurer in New Jersey Superior Court. At that time, the court noted that it had limited authority to force ACE USA to pay Mr. Stancil's costs.

If employers want to keep their workers comp costs down and thereby reduce their premium, they should always be looking to keep their injured employees happy.  If the employee is already injured and out of work, make sure he or she is getting paid.  Of course you want to make sure that they are getting better over time and you want to follow up on this. But making them disgruntled when they are going to get paid and get their medical bills paid anyway, is simply shooting yourself in the foot. The process should run smoothly. The employee should feel that the employer cares about him or her, while at the same time the employer must get the message across to the employee that they would like to see the employee get better and get back to work as soon as possible.  All this story reminds me of is basically an insurance company or an employer leading their employees straight to a lawyer’s office, where then the odds of a cooperative employee will go down drastically. While we’re on the topic of employers reducing their workers comp costs, employers should consider workers compensation premium recovery and workers compensation audit as the quickest and easiest solution to obtain refunds and reduce workers comp premium costs.