ESPN

August 30, 2012.

Claims move toward head trauma, a change that could cost NFL teams millions

National Football League teams are facing a significant threat to their finances because of a legal option available to nearly every janitor, teacher and cashier in America — workers' compensation.

Playing professional football is inherently dangerous, but the known risks do not prevent players — and former players — from filing workers' compensation claims against teams, courts have ruled. And while an individual compensation award might cost a team just $20,000, the changing types of claims being filed could end up costing teams millions of dollars a year.

More and more, the long-term effects of head trauma are being cited in workers' compensation claims, experts told "Outside the Lines," and the yearslong medical-treatment payments teams might be on the hook for to cover such claims could add up to millions annually.

More than anything else, said one insurance broker who has worked with an NFL team on its workers' compensation benefits, the workers' compensation reality could be the one item that forces significant changes to how the game is played on the field. Linemen, for example, might not be allowed to crash into each other from three-point stances in the near future, said Duke Niedringhaus of J.W. Terrill, a St. Louis-based insurance firm that has brokered workers' compensation insurance for NFL teams. And while others disagree with that assessment, there is agreement among insurance, NFL and legal sources that workers' compensation issues are yet another looming financial cloud for teams.

"Most companies know, five years after a given year, how much money in claims they'll be paying," Niedringhaus said. "After five years, these NFL teams have no clue what the future will look like."

A different legal challenge

The NFL is facing a barrage of legal challenges over player injuries. More than 3,000 former players or family members have filed lawsuits against the league seeking concussion-related damage claims. And the league and some of its insurers are volleying lawsuits over which head-injury damages each should be responsible for covering.

But the workers' compensation issue is separate. Workers' compensation has been an option for players and ex-players for years. State laws allow workers — including football players — to file such claims; most claims involving NFL teams have centered on specific injuries for which a set amount of money is usually awarded.

But those types of claims have been manageable, Niedringhaus said, because teams, which are required to carry workers' compensation insurance or prove to states they have enough money to cover claims, had a fairly good idea of what they might be facing given those types of obvious injuries. In recent years, teams have paid workers' compensation deductibles to insurance companies in the neighborhood of about $500,000 per player who filed a successful claim. Yet that number has moved to about $1 million per successful claim, he said, and it's not unheard of for teams to be paying $3 million to $5 million annually for claims over a 10-year period.

Teams face two significant issues: former players in some states often can file claims years after their playing time ended, and the long-term effects and treatment of head injuries. Floyd Little and some of his former teammates with the Denver Broncos filed workers' compensation claims saying they still suffer from injuries that occurred during their careers in the 1970s and '80s. In the Little case, which is pending, the team's insurer filed a lawsuit saying it was not responsible for paying such a claim.

California a special place for cases

In order to collect on a workers' compensation claim, players, like all other employees, have to show they were injured on the job. Specific injuries in specific states usually aren't particularly costly, and there are set costs for certain percentages of disability. Once it is determined by the state that a player's case for injury is valid, a settlement often is reached. But players often have the right to shop around for the state that offers them the most expansive coverage. Former Washington Redskins punter Tom Tupa and wide receiver Darnerian McCants filed for workers' compensation in Maryland because the state has a reputation of offering better benefits as compared to Virginia, where the insurer and the team argued Tupa and McCants spent most of their time employed (practicing), even though games were played at FedEx Field in Landover, Md. The court sided with the players.

"For Tupa, it means lifetime medical care," Benjamin T. Boscolo, Tupa's attorney, told the Baltimore Sun. "It means surgery if and when he gets to a place where he can't function in his state of health."

The most exposure to teams lies in the state where the most teams play: California.

California is the only state that allows employees, including players, to file a cumulative trauma case. And it has no time-period restriction on when a player must file a claim. Cumulative trauma is an injury that results from constant overuse on the job. California is unique because a claimant need not have been an employee of a California-based team. A player who played just one game or had one practice in the state — even as a member of another team — is eligible to file a claim. Attorneys and players have aggressively moved cases to California because of these reasons.

Only a few dozen NFL cumulative trauma cases have been settled thus far in California, but there are hundreds of player claims lined up there — a reality first reported by The New York Times in 2010.

With so much money in play in the California cases, the league has fought back. Over the past couple of years, the league has worked with teams to successfully get compensation cases involving former New Orleans Saints and Kansas City Chiefs players moved from California back to the jurisdictions of their states. The league and teams have been quietly celebrating a recent Ninth Circuit Court of Appeals decision that ruled that Bruce Matthews, who had a 19-year career in the league with the Houston Oilers and Tennessee Titans, couldn't file for workers' compensation in California because he didn't prove he was injured there.

And some teams have been successful at working language into player contracts that limits where a player can file a workers' compensation claim, even though those stipulations don't always hold up in court. Tupa and McCants, for example, each had contract clauses that said they must file such claims in Virginia. Yet Maryland's highest court ruled that limiting players to certain coverage was in violation of state law.

Three years ago, the NFL Players Association hired Michael Gerson, a California-based attorney, to represent young players to make sure they had access to the future benefits they deserved. Gerson said insurance companies frequently would track down players whose careers had ended with injury, offering them small settlements in exchange for waiving future claims.

"If they can buy a damaged knee for a couple thousand dollars, they're going to do it," Gerson said, estimating that 50 percent of all NFL players have some sort of joint-replacement surgery by the time they are 50 years old. Gerson said he doesn't understand why the league makes it so hard for players to fight for their employee rights.

"The NFL has been making money off players for years by having them be gladiators, going toe to toe," Gerson said. "If they get the reward, they have to assume the risk."

League officials declined to answer questions about the past, present and future of workers' compensation, but league spokesman Greg Aiello did mention the league offers compensation for those experiencing the effects of head trauma through its 88 Plan. The plan — named for the uniform number of former Colts tight end John Mackey, who suffered from dementia — allows players to collect benefits associated with dementia and Alzheimer's without needing to prove a link to anything that happened to them on the field. The program provides up to $100,000 a year if a player is being cared for in a hospital or an assisted-living community and $88,000 a year if a player is living at home. The NFL, which recently added players faced with Parkinson's to the plan as well as a $10,000 funeral benefit, said that since the program has been in place, it has paid $18.6 million to players.

A player who receives payments from the NFL is not prevented from receiving a workers' compensation award.

"There's a clear correlation with what's happening with these guys with brain injury and the effects they are experiencing," Niedringhaus said. "A lifetime full of unlimited medical coverage could cost millions and millions of dollars."

Niedringhaus' view of the situation is what prompted him to look differently at the recent majority sale of the Cleveland Browns. When Jimmy Haslam III agreed to purchase 70 percent of the team for $700 million, many looked at it with a "rich get richer" mentality.

Niedringhaus saw it a shrewd business move for the seller, Randy Lerner.

"If I'm an NFL owner and I can sell my team right now for $700 million and get rid of all the prior legal liabilities, how could I not?" he said. "A lot of the damage has already been done to players who injured themselves five, 10, 15 years ago."

Complexity in workers compensation claims is not just limited to the NFL. There are many things to sort out in different claims in various blue collar industries. These complexities offen lead to errors and overcharges through honest mistakes from the insurance companies that end up costing the employer more in workers compensation premiums. You can recover these overcharges that have accumulated over the years through workers comp premium recovery.