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 Employer use of EAIP is voluntary. The program is one of several financed by the workers’ compensation tax, “cents per hour,” which is paid in equal shares by workers and their employers.

Insurers and self-insurers administer individual early-return-to-work programs (placements) under the EAIP, and the Workers’ Compensation Division regulates these activities. 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 wage subsidies. In turn, the department reimburses insurers and self-insurers from the Workers’ Benefit Fund.

The EAIP probably saves on workers’ compensation premium. Wages paid for the light-duty job largely replace time loss (temporary disability) payments. The department estimates that use of the EAIP resulted in $11.45 million in savings on time loss for claims closed in 1997. These savings represent 2.1 percent of 1997 loss costs. Note that this estimate 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.

Under Oregon law, the insurer or self-insurer may be able to reduce or discontinue time loss benefits if the worker refuses modified work.² An employee who refuses light duty also risks termination. 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 EAIP placement leads to a return to full duty with the employer, and the results of one study suggest that the EAIP does indeed promote that outcome.

The incentives, or return-to-work assistance, available to employers under the EAIP, include wage subsidies, worksite modifications, and early-return-to-work purchases. Figure 1 shows that wage subsidies account for most assistance used in early-return-to-work programs. 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.

Far fewer programs include a worksite modification or purchase. 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 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, etc., as well as modified workstations and equipment. The department does not have data on the relative prevalence of the kinds of light duty set up under the EAIP. Although reimbursements for worksite modifications under the EAIP are relatively uncommon, modified workstations and equipment may be more prevalent in Oregon than in the neighboring state of California, according to preliminary results of research done by the RAND Institute.⁴

 

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

Table 1 shows that the department approved reimbursements for 9,443 early-return-to-work programs in 1999, a 6 percent drop from the previous year. Total expenditures approved came to $10.60 million, down from $11.76 million. More than 1,800 different employers used the EAIP in 1999.

Most of the drop in EAIP activity may be attributed to a decline in early-return-to-work programs for disabling claims (see Table 2). The latest year’s figures are 4,361 placements for disabling claims, at a cost of $6.75 million for reimbursements, compared to nearly 5,000 placements at $7.68 million in 1998.

The average time from disabling injury to placement dropped 3 percent to 97 days, and the median time (half higher, half lower) was 19 days.6 The average length of these programs was 74 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 1999 was 46 days. 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.

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, and thus may be eligible for EAIP assistance, according to departmental analysis.7 Currently, less than 10 percent of nondisabling claims feature a placement under EAIP. Table 3 shows little change in the number of programs for nondisabling claims in 1999 compared to 1998, though reimbursements dropped by 6 percent to $3.85 million. Nearly 50 percent fewer employers use the EAIP for nondisabling claims, compared to disabling claims.

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, at full wages, soon after injury.

Workers’ compensation insurers administer individual return-to-work programs (placements) under the EAIP, and for each program they receive a $60 flat fee to cover administrative expenses. Self-insurers also receive this reimbursement. Total reimbursements for administrative expenses came to about $569,000 in 1999.

Self-insurers, who account for about 20 percent of disabling claims, have started about one third of early-return-to-work programs for disabling claims. Not far behind is SAIF, with a roughly 30 percent share of programs, consistent with its share of disabling claims. SAIF insureds spend the most on programs for disabling claims, in total and on average. Employers insured by the Liberty Group run the longest programs for disabling claims, 93 days on average for the most recent year.

Self-insurers account for around 40 percent of both programs started and expenditures for nondisabling claims. However, employers insured by the Liberty Group and other private insurers substantially increased their use of the EAIP for nondisabling claims in 1999, in contrast to SAIF. Because the department does not routinely collect detailed data on nondisabling claims, few comparisons can be made to early-return-to-work programs for nondisabling claims.

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 3 shows that smaller employers start around 40 percent of programs for disabling claims, and make just over one quarter of placements for nondisabling claims. Undoubtedly, many smaller employers have difficulty identifying suitable light-duty work.

Employers in the manufacturing industry have been responsible for around 25 percent of EAIP placements for disabling claims, and well over one third for nondisabling claims. While manufacturing is disproportionately represented in placements, construction is an industry with an under-representation. However, creation of light-duty jobs may be relatively difficult for construction employers. Note that the administrative rules do not prohibit creation of light-duty jobs at alternative worksites.

At a more detailed level of classification, employers in the wood products and health services industries have been the leaders in the use of the EAIP over the last five years, with well over 3,000 placements each. Since the beginning of the EAIP in 1993, a handful of large employers have made at least 1,000 placements.

Table 4 presents demographics for injured workers with disabling claims who were placed into light duty under the EAIP. 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 1998 disabling claim closures, 35 percent of claims with light duty under the EAIP had an award for Permanent Partial Disability (PPD), compared to a 26 percent PPD rate for other claim closures. Similar disparities in PPD rates exist back through 1995 closures (see Figure 4).

Disability as measured by Preferred Worker identification seems to be more severe for workers placed in light duty under EAIP. Preferred Workers have a permanent disability that prevents return to regular work. For 1998 closures, 12 percent of claims featuring EAIP were identified as Preferred Workers, compared to 9 percent of other closures.8 Finally, 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, the difference in average medical costs is large: more than $5,300 in medical costs for EAIP claims, compared to just over $1,200 for claims where only time loss was paid.

Early return to work under the EAIP centers on return to a restricted-duty job within the limitations of the workplace injury or illness. In terms of at least a temporary return to work, then, every early-return-to-work program is successful. However, a better measure of 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 5 displays preliminary results of the latest study, on workers with injuries or illnesses during 1992 and 1993. Unfortunately, the study does 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 Program 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 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.9

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 for the general population of Oregon wage earners. The real attrition rate from light duty under EAIP, then, is probably in the range of 4 to 6 percent.10

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. Clearly, early return to work has a positive impact upon an average injured workers’ prospects for reemployment.

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