I-Team: Max Workers' Comp Payouts for Same Limbs Lost on Job Vary Drastically by State

Workers' compensation payouts for lost limbs vary drastically from state to state, meaning some injured employees are paid a fraction of what others get for identical injuries, according to an investigation by nonprofit ProPublica and NBC 4 New York's I-Team. 

A ProPublica analysis of workers' compensation law in all 50 states shows the value of an amputated hand, foot or arm depends greatly upon the state in which an employer does business.

For example, a severed arm is worth up to $860,000 in Nevada, one of the most "generous" states in that regard. In Texas, ProPublica found the very same lost arm would be valued at a maximum of $108,000 -- nearly 700 percent less, for the same lost limb.

The differences are less drastic, but still stark, when comparing workplace injuries in the tri-state area, according to ProPublica's interactive map of workers' compensation benefits by state, limb by limb.

Based on payment schedules for permanent partial disability under workers' compensation law, the maximum payout for an amputated foot in New York is $165,773 -- nearly 18 percent more than in New Jersey. A lost eye in New York could be worth up to $129,384 -- 26 percent more than a lost eye in New Jersey, where the maximum payout is $102,600, ProPublica found.

Anyone who loses a middle finger on the job for a New York employer can expect to get about twice as much as he or she would if that finger had been lost while working for a New Jersey company, the data show.

ProPublica investigative reporter Michael Grabell, who worked on the project, said it was surprising the payouts for the same lost limbs could be so starkly different depending on the state of employment.

"Say you lost an eye on the job," Grabell said. "In Alabama the most you can get is $27,000 dollars and in Pennsylvania the most you can get is $261,000."

James Welsh, a former New Jersey Workers' Compensation judge said amputation injuries are fundamentally undervalued because, unlike a shoulder or back injury, victims can’t fight through the pain of lost limbs.

“You're dealing with people whose life is the use of their hands,” Welsh said. "[If] they lose their hand or they lose their foot, they're essentially done."

In 2011, New Jersey legislators passed a bill that would have raised workers' compensation payouts by more than 20 percent for people who lose a hand or a foot. Gov. Christie vetoed the bill, citing additional costs to businesses to the potential economic detriment of the state.

Some believe the current system is sufficient.

Robert Hartwig, President of the Insurance Information Institute, a trade group representing insurance companies, said workers' compensation has been a dependable and fair resource for injured workers for decades.

“Overwhelmingly, it is the case that injured workers are very well served by this system," Hartwig said.

He stressed schedules of workers' compensation payments for lost limbs are not designed by insurance companies but are the products of legislative processes. If an increase in benefits for amputations were to become law, insurance companies would likely seek premium increases.

“The insurer takes, as a given, the benefit structure that is provided and approved by the state,” Hartwig said. "But the insurer, in order to continue to be able to operate, needs to be able to take in enough revenue and earn a reasonable profit in order to continue to operate within that environment. So that’s where the insurance industry lobbies."

Critics say the insurance lobby has outsized influence in policy decisions about workers' compensation payout schedules, mainly because there is no group representing workers who will be injured in the future.

Jeffrey Bloom, an attorney who represents workplace injury victims in northern New Jersey, says the topic of monetary payouts for lost limbs is generally ignored by voters until they or a loved one find themselves in need of the benefits.

“This is not something that’s hot and sexy. This is not Kim Kardashian’s new hairstyle," Bloom said. "This is something that the general public doesn't care so much about until it happens to someone they know and they love."

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