The Elderly Worker Emerging Workers Compensation Trends in

The Elderly Worker: Emerging Workers’ Compensation Trends in Your Aging Workforce Minnesota Comp Advisor Breakfast Briefing February 14, 2018 Janet Monson Aafedt, Forde, Gray, Monson & Hager, P. A.

Current State of the Aging Workforce AMERICANS CAN’T SEEM TO RETIRE : ONE THIRD OF WORKERS OVER AGE 65 in LABOR MARKET AND ALMOST TWENTY PERCENT of WORKERS OVER AGE 70 are in WORK FORCE

Life Expectancy Born in 2008 Born in 2009 Average 78. 1 years Average 78. 5 years Males 75. 6 years Males 76 years Females 80. 9 years Americans are living longer Life expectancy increased steadily for 50 years- until slight drop in 2015 and 2016 Improvements in heart disease and stroke mortality Source: NCHS, National Vital Statistics System, Mortality. https: //www. cdc. gov/nchs/products/databriefs/db 267. htm

Worker Shortage in Factory Jobs Factors affecting workforce 78 million baby boomers are nearing or at retirement Shortage in well-trained workers for factory positions National Association of Manufacturers (NAM) estimates factories will need 3. 5 million workers in the next 10 years Factory approach to keep skilled workers Offer phased-in retirements Retrofitting of production lines Installation of assembly tools that reduce reaching Moving supplies closer to staffers

Why are People Working Longer? Many Americans are faced with lots of uncertainty Instability in Social Security benefits In 2034, trust fund for retirement and disability benefits will stop being fully funded ▪ Benefits facing 25% cut In 2029, Medicare is projected to suffer similar fate Inadequate savings

The Law

Minn. Stat. § 176. 101, subd. 4 Permanent total disability (PTD) for injuries on or after October 1, 1995 PTD shall cease at age 67 because the employee is presumed retired from the labor market An employer and insurer may cease payment of PTD when employee reaches age 67, without taking further action prior to the cessation Employee can rebut the presumption and file a petition if not retired at age 67 to continue to claim benefits

Case Law

Skari v. Aero System Engineering Skari v. Aero Systems Engineering, No. WC 11 -5257 (W. C. C. A Nov. 7, 2011) Mr. Skari was born in 1942 Left school in 10 th grade Deaf since childhood Worked for Aero for 22 years Suffered numerous back injuries Declared permanently and totally disabled on March 5, 2002 Mr. Skari would have kept working as long as he was able to do so Compensation Judge and WCCA affirmed that the retirement presumption had been rebutted and that the presumption of retirement is a question of fact for the compensation judge.

Vandervoort v. Olinger Transportation Vandervoot v. Olinger Transp. , Inc. , No. WC 09 -4983 (W. C. C. A. 4, 2010) Mr. Vandervoort worked as farmer and temporary worker for 20 years Was then hired at Olinger in 1998 As of January 21, 2006 Mr. Vandervoort was permanently and totally disabled Benefits were discontinued on his 67 th birthday Mr. Vandervoort objected. Compensation judge determined employee failed to rebut the presumption; had not actively sought employment Employee appealed and WCCA agreed that since Mr. Vandervoort was PTD, his failure to seek rehabilitation or employment should not be used to support the conclusion that he voluntarily retired.

Dillemuth v. Owatonna Tool Co. , 59 W. C. D. 325 (W. C. C. A. 1999) WCCA identified six factors that may be considered in determining whether an employee retired from the labor market 1) 2) 3) 4) 5) 6) Employee’s expressed intent to retire or continue working; Whether the employee applied for Social Security Retirement benefits; Evidence of a financial need for employment income, including the adequacy of a pension or retirement income; Whether the employer or employee initiated the discussion of retirement; Whether the employee has sought rehabilitation assistance, and; Whether the employee actively sought alternative employment or was working.

Job Search Relavancy Davidson v. Thermo King, 64 W. C. D. 380 (W. C. C. A. 2004) Job search may be relevant if an employee takes a retirement package and then later makes a claim fro PTD Liniewicz v. Muller Family Theatre, No. WC 06 -253 (W. C. C. A. Mar. 21, 2007) Employee is involved in job search at age 67 before becoming adjudicated PTD Being involved in a job search at age 67 was evidence that the employee did not plan to voluntarily retire at age 67

Frandsen v. Ford Motor Company, 801 N. W. 2 d 177 (Minn. 2011) or No. WC 11 -5342 (W. C. C. A. Nov. 17, 2011) WCCA held that there is no need for an employer and insurer to file a petition to discontinue permanent total disability benefits based upon the presumptive retirement provision on Minn. Stat. 176. 101, subd. 4 Employer and Insurer may discontinue PTD at age 67 without filing a NOID, Petition to Discontinue, or any notice of discontinuance. Employee can file Claim Petition to receive benefits beyond age 67

Buley v. Polaris Industries, Inc. , No. WC 16 -6012 (W. C. C. A. Jan 23, 2017) The employer petitioned the court for an order discontinuing the payment of PTD benefits on the ground that the employee will achieve statutory presumptive retirement age of 67 on July 29, 2017. Having found an insufficient basis to grant the relief requested, the petition was dismissed. There is no legal basis for the court to vary from the procedure set out in Frandsen. Minnesota Supreme Court dismissed the employer’s petition to discontinue.

To Retire, or Not to Retire?

Factors Affecting Retirement Decisions Medical factors Cost and need for Medical Insurance for self and family Medical care and prescriptions not covered by insurance Medical issues and associated costs Change in marital status Siblings, parents, or spouse’s length of time in labor market Love of work Age at time of injury Children, grandchildren, and financially dependent people living with employee Whether employee’s pension, ESOP, or 401(k) has taken drop in value Employee’s early exit affect on their pension amount Past earnings or income producing assets

Cost of a PTD Claim for Elderly Workers If retirement presumption rebutted, benefits may be payable to death. Benefits are not paid based upon 2/3 actual wage. Instead imputed PTD benefit as of October 1, 2017 - $1, 061. 82 per week.

Compare and Contrast Case Values Case A 74 year old relatively healthy part-time worker at a grocery store in small Minnesota town. Wage of $12. 00 per hour. Knee injury results in total knee. Permanent restrictions preclude the pre-injury job and employer cannot accommodate. QRC opines that job search would be futile. Employee receives $1200 per month in social security retirement benefits. Case B 63 year old piper-fitter, resides in Burnsville and earns a wage of $40. 00 per hour. Knee injury results in total knee. Permanent restrictions preclude a return to his trade. QRC opines that work could be found, but at wage in $15 -20 hourly range. Estimated SSD is $2250 per month.

Any Questions? JMonson@aafedt. com 612 -3312 Copyright 2017, Aafedt, Forde, Gray, Monson & Hager, P. A.