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Introduction
The Employer-at-Injury Program (EAIP), created in 1993, is a package of financial incentives for Oregon employers to encourage the early return to work of injured workers, while their workers’ compensation claims are still open.¹ The program is one of several paid out of the Workers’ Benefit Fund, which is financed by the workers’ compensation tax. In 2000, for example, expenditures for EAIP came to about 0.2 cents per hour worked by each Oregon worker and 0.2 cents per hour, for each worker, from employers.

Insurers and self-insurers administer individual early-return-to-work placements (programs) under the EAIP, and the Workers’ Compensation Division (WCD) regulates placements and the conditions for payment of the financial incentives. With the insurer’s assistance, an employer identifies light-duty or modified positions, obtains a temporary release for work from the injured worker’s medical provider, and then places the injured worker in the light-duty job. Insurers reimburse employers for costs allowable under administrative rule, such as 50 percent wage subsidies, and the department reimburses insurers and self-insurers. Practices vary as to whether insurers reimburse employers prior to their own reimbursement from the department; for instance, SAIF reimburses employers upon receipt of a completed wage subsidy request.

Employer use of the Employer-at-Injury Program is voluntary. Employers may place workers in light-duty jobs without using the EAIP incentives. In spring 2001, the department began collecting data at claim closure that may be useful in estimating the total number of light-duty assignments. This report provides statistics for light-duty jobs under the EAIP, only.

Under Oregon law, the insurer or self-insurer may be able to reduce or discontinue time loss benefits if the worker refuses modified work. An employee who refuses a light-duty job also risks termination.² Typically, however, the EAIP provides an important benefit for the injured worker: a reduction in the uncertainty over the when and where of the return to work. Also, the wage subsidy probably results in a higher wage offer to the worker for the light duty job.³ Ideally, the light-duty placement leads to a return to full duty with the employer, and the results of a recent departmental study, Return to Work in the Oregon Workers’ Compensation System, suggest that the EAIP does indeed promote that outcome.

Characteristics of early-return-to-work placements
The return-to-work assistance available to employers under the EAIP includes wage subsidies, worksite modifications, and early-return-to-work purchases. Figure 1 shows that wage subsidies account for most of the dollars spent on assistance. Almost every placement features a wage subsidy, which is a reimbursement at the rate of 50 percent of the wages paid for the light-duty job, for a period of up to three months.

Worksite modifications are designed to allow the injured worker to perform within the limitations of the injury. The maximum reimbursement is $2,500. An example of a worksite modification is an ergonomic chair. These modifications usually become the property of the employer. Purchases are items that are necessary for the job setup regardless of worker disability. The typical purchase is for tools and equipment, to a maximum of $1,000; but work clothing or uniforms up to $400, and tuition, fees, and books up to $750 may also be reimbursed.

Light duty can take the form of reduced work hours, modified work tasks, a different job or worksite, etc., as well as modified workstations and equipment. The department does not collect data on the kinds of light duty set up under the EAIP. Modified workstations and equipment may be more prevalent in Oregon than in the neighboring state of California, according to anecdotal evidence from a study conducted by the RAND Institute.⁴ However, relatively few placements under the EAIP include a reimbursement for a worksite modification or purchase. The relative importance of these two benefits in terms of dollar expenditures has declined since 1998, as well.

Figure 2 compares counts of early-return-to-work placements to accepted claims.⁵ One inference from the graph is that relative use of the EAIP for disabling (indemnity) claims peaked in 1998, and for nondisabling claims, in 1999.

Table 1 shows that the department approved reimbursements for 7,864 early-return-to-work placements in 2000, a 17 percent drop from the previous year. Total reimbursements for the approved placements came to $9.5 million, down from $10.6 million in 1999 and close to $11.8 million in 1998. Both the placement and reimbursement figures are the lowest since 1996, which was the first year that EAIP eligibility was extended to nondisabling as well as disabling claims.

The recent decline in approved placements and reimbursements appears to be largely related to an increase in audit findings by the Workers’ Compensation Division against insurers and employers. These findings apparently have discouraged requests for EAIP reimbursements, in that some placements may not conform to WCD’s stricter interpretation of the administrative rules governing the program.

Much of the drop in EAIP activity over the last two years comes from a decline in approved reimbursements for placements on disabling claims (see Table 2). The latest year’s figure is 3,563 placements, compared to 4,379 the previous year and 4,989 in 1998, the peak year. Reimbursements to insurers and self-insurers for placements on disabling claims have fallen by almost $2 million from the peak year of 1998, at $5.8 million currently.

The EAIP became available for nondisabling (medical only) claims in 1996. About 25 percent of those claims are serious enough to involve restrictions on job duties, according to departmental analysis.⁶ Currently, just over 7 percent of nondisabling claims feature a placement under EAIP.

Table 3 shows a 15 percent decrease in the number of placements for nondisabling claims in 2000, compared to 1998 and 1999 figures. Reimbursements dropped to $3.7 million in 2000, compared to $3.8 million for the prior year.

Significantly, about half of the placements for claims classified as nondisabling are made within three days of the injury. Because an accepted claim is likely disabling if it involves more than three days away from work, the EAIP may be helping employers to avoid thousands of disabling claims by encouraging light-duty work, presumably at full wages, soon after injury.

For disabling claims, the average time from injury to placement dropped 7 percent in 2000, to 90 days, and the median time (half higher, half lower) was 16 days.⁷ The average length of these placements was 79 days. These statistics constitute evidence that employers use the EAIP for disabling claims of a relatively high severity, given that the average length of time loss payment for all disabling claims has been less than 60 days, and the median, less than 20 days, in recent years.

The majority of placements for disabling claims include a wage subsidy. The average length of subsidies in 2000 was 46 days, the same as for the previous year. Although administrative rules specify that the maximum length of a subsidy is three consecutive months, the rules include safeguards to assure that light duty is not prolonged.

Figure 3 provides a comparison of hourly wage rates for injured workers at the time of the disabling injury and at EAIP placement. The placement hourly rate has been around 95 percent of the injury wage rate. Under Oregon law, any difference in weekly wages earned during the recovery period, whether due to lower hourly wage rates or fewer hours worked, is compensated by Temporary Partial Disability benefits.

Insurers and employers
Workers’ compensation insurers administer individual return-to-work placements under the EAIP, and for each they receive a $60 flat fee to cover administrative expenses. Self-insurers also receive this reimbursement. Reimbursed administrative expenses came to about $474,000 in 2000, about 5 percent of total reimbursements.

Self-insurers, who account for around 20 percent of disabling claims, have started about one-third of early-return-to-work placements for disabling claims. SAIF administers a similar percentage of placements, consistent with its share of disabling claims. SAIF insureds spend the most on placements for disabling claims, in total and on average.

Self-insurers account for roughly 40 percent of both placements started and expenditures for nondisabling claims. Both SAIF and self-insurers increased expenditures for placements on nondisabling claims in 2000, in contrast to employers insured by the Liberty Group and other private insurers.

Almost 1,600 different Oregon employers used the Employer-at-Injury Program in 2000. Close to twice as many employers used EAIP for disabling claims as for nondisabling. Since the beginning of the EAIP in 1993, a handful of large employers have made at least 1,000 placements.

The department estimates that almost half of disabling claims occur at employers of 100 or fewer workers, the small to mid-range firms that make up most of Oregon’s base of employers. Figure 4 shows that smaller employers start around 40 percent of placements for disabling claims. The department does not routinely collect data on individual accepted nondisabling claims. However, some data are collected for EAIP claims, and a large proportion of EAIP placements for nondisabling claims are made by self-insurers. Since most self-insurers are large businesses, it should not be surprising that smaller employers start barely one quarter of placements for nondisabling claims.

Employers in the manufacturing industry have been responsible for around 25 percent of EAIP placements for disabling claims. While manufacturing is disproportionately represented in placements, compared to disabling claims as a whole, construction is an industry with an under-representation.

Undoubtedly, many smaller employers have difficulty identifying suitable light-duty work. Creation of light-duty jobs may be relatively difficult for certain lines of business, such as construction, as well. Current administrative rules do not prohibit creation of light-duty jobs at alternative worksites, such as non-profit social service agencies. The department estimates that roughly 5 percent of placements under the EAIP, in recent years, have been at alternative worksites. Senate Bill 485 of 2001 gives injured workers new rights to refuse some modified work arrangements, including alternative worksites.

Injured workers
Table 4 presents demographics for injured workers with disabling claims who were placed into light duty under the Employer-at-Injury Program. The percentage of females and the average weekly wage at injury have been higher for EAIP participants, compared to all workers with a disabling claim. Average tenure has been around 25% higher for the early-return-to-work group. Figures for average age at injury are similar to those for all workers with a disabling claim.

Possibly, differences in demographics between EAIP participants and all workers with a disabling claim are due to employer selectivity over which workers are the best candidates for early return to work. This would appear to be a fertile field for further research. Interestingly, there is little apparent difference in distributions of workers by occupation group. For instance, more than 40 percent of disabled workers placed in light duty under EAIP were working in operator, fabricator, and laborer occupations, and the same holds true for all workers with a disabling claim. Analysis at a more detailed level of classification likely would find differences, if only because the occupational mix varies by industry, and employers in certain industries are more likely to use the EAIP.

The kinds of injury affecting disabled workers who are placed into light duty show little difference, at first glance, from those for all workers with accepted disabling claims. There is other evidence, however, that employers select the more severely injured workers for placement in light duty. For 1999 disabling claim closures, 33 percent of claims with light duty under the EAIP had an award for Permanent Partial Disability (PPD), compared to a 24 percent PPD rate for other claim closures. Similar disparities in PPD rates exist back through 1995 closures (see Figure 5).

Disability as measured by Preferred Worker identification seems to be more severe for workers placed in light duty under the Employer-at-Injury Program. Preferred Workers have a permanent disability that prevents return to regular work. For 1999 closures, 12.5 percent of claims featuring a light-duty job under the EAIP were identified as Preferred Workers, compared to 8.6 percent of other closures.⁸   Also, injury severity as measured by average costs for medical services, reported at closure, has been higher for claims featuring an EAIP placement. Furthermore, when claims are controlled for whether the worker could return to regular work at closure, the difference in average medical costs is large: more than $5,000 in medical costs for EAIP claims, compared to just over $1,200 for claims where only time loss was paid. In sum, there is plentiful evidence that workers placed into light-duty work under the EAIP have relatively severe injuries.

Outcomes
The Employer-at-Injury Program probably saves employers money on workers’ compensation premium. Wages paid for the light-duty job largely replace time loss (temporary disability) payments, and reimbursements for wage subsidies are not included in calculations of insurance premium costs. The department estimates that use of around $8 million in wage subsidies under the Employer-at-Injury Program resulted in $12.1 million in savings on time loss for claims closed in 1999.⁹ These savings represent 2.1 percent of 1999 loss (benefit) costs. Note that this estimate of savings does not include other claim costs, such as Permanent Partial Disability and vocational assistance, or indirect costs such as lost productivity, that may be avoided by use of the EAIP.

Early return to work under the EAIP centers on return to a restricted-duty job within the limitations of the workplace injury or illness. From the standpoint of the injured worker, a good measure of the Employer-at-Injury Program’s success is job retention following the placement. The department monitors reemployment of injured workers by conducting occasional studies using wage data from the Oregon Employment Department. Figure 6 displays results of the latest study, Return to Work in the Oregon Workers’ Compensation System, on workers with injuries or illnesses during 1992 and 1993. The study measured outcomes for EAIP placements occurring at the inception of this return-to-work program. The study did not include nondisabling claims.

The study’s definition of the EAIP group was injured workers with accepted disabling claims whose participation in the Employer-at-Injury Placement was the only form of reemployment assistance they received. In other words, the EAIP group included only workers who were determined ready to return to work at claim closure, after the EAIP placement. As noted above, there is a small but significant percentage of EAIP placements who can’t return to their regular jobs, and those workers were not included in the study’s EAIP group. All injured workers in the EAIP group were eligible to receive temporary disability benefits, and many were awarded benefits for permanent disability. The natural comparison groups, then, are other injured workers receiving no reemployment assistance after claim closure. These workers were categorized according to whether their disabilities were rated as permanent (PPD, or Permanent Partial Disability) or not (TD, Temporary Disability only). By most measures, workers in the EAIP group had injuries more severe than those for workers in the TD group, but less so than workers in the PPD group.¹⁰  

For the EAIP group, the rate of return to work with the employer at injury following the light-duty job was considerably less than 100 percent. At 86 percent, the EAIP group did fare better in this measure than workers receiving no early-return-to-work assistance. Moreover, the apparent attrition rate of 14 percent should be interpreted in the context of the observed drop-out rate for any group of workers, due to moving out of state, retirement, entering self-employment, and the like, as well as unemployment. A previous departmental study showed an immediate attrition rate of 10 percent from a random sample of all Oregon wage earners. The real attrition rate from light duty under EAIP, then, is probably in the range of 4 to 6 percent.¹¹

The employment rate for the first quarter of 1998 provides an indication of the longevity of wage work in Oregon. Statistics reflect employment five to seven years after injury. At 74 percent, the EAIP group was 7 percentage points above the PPD group, and 10 points above the TD group. Along with the extent of pre-injury attachment to the labor force, early return to work appears to have a positive impact upon an average injured workers’ prospects for reemployment. With its Employer-at-Injury Program, the Oregon workers’ compensation system uses wage subsidies to promote those positive outcomes.

Footnotes

1 Throughout this report, forms of the word “injury” connote occupational disease as well as injury.

2 See ORS 656.268(4)(c) and 656.325(5)(a), which are general, rather than EAIP, statues. Provisions within Senate Bill 485 of 2001, fully effective in 2002, will permit workers to refuse light-duty assignments under some circumstances. For a discussion of light duty from the perspective of both the employer and the worker, see Ed Welch, “Alternative Return to Work,” in On Workers’ Compensation, May 2000.

3 See Workers’ Compensation Research Institute: What are the Most Important Factors Shaping Return to Work?, 1996. Also, administrative rules were revised in 1997 to encourage higher wage offers.

4 At the National Symposium on Workers’ Compensation (East Lansing, Michigan, July 11, 2000), Robert T. Reville of RAND described preliminary results of a survey of self-insured employers, which suggest that employers doing business in Oregon as well as California use this type of light duty more frequently in Oregon. According to Reville, the RAND study on return to work, including results of the survey, is due to be published in the summer of 2001.

5 The count of placements includes placements on aggravation (claim reopening), which made up about 6 percent of 2000 placements for disabling claims, while the count of claims does not. Administrative rules permit one use of the EAIP for every claim opening.

6 This statistic is derived from results of the Oregon Occupational Injury and Illness Survey applied to departmental estimates of the number of accepted nondisabling claims.

7 Use of EAIP placements for claim reopenings affects the mean more than the median.

8 ”Other closures” include claims with disability severe enough to warrant eligibility for retraining, as well as the large majority of claims with no permanent disability.

9 Administrative rule gives employers and insurers more than a year to report placements. Thus, closure year 1999 was the most recent year for which EAIP placement data were fully available in June 2001.

10 Average medical expenses were noted above; for the PPD group, the figure was around $5,800. The average award for permanent disability was $2,297 for the EAIP group and $4,624 for the PPD group. However, EAIP claims with an award for PPD averaged $5,712 in benefits paid.

11 See Return to Work Experience, 1991-1993, for Oregon Workers’ Compensation Claims Closed in 1991 (July 1995). With unemployment lower by about 2 percentage points in the later part of the 1990s compared to earlier in the decade, the attrition rate probably declined.

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