Limited and Unlimited Workers' Compensation Wage Replacement Benefits and Rehabilitation.

Abstract

This study examines the relationship between the type of Workers' Compensation wage-replacement benefits--limited and unlimited-- and rehabilitation process and oucome for the occupationally disabled in the state/federal rehabilitation program. This study extends prior work suggesting that unlimited benefits provide a disincentive for Workers' Compensation recipients to achieve successful rehabilitation. The sample is composed of 2077 Workers' Compensation recipients receiving services during 1975-1979 from the State/Federal Rehabilitation agency in eight states, four with limited and four with unlimited benefits, as recorded on the 1979 R-300 Rehabilitation St and ards data tape. Analysis regarding rehabilitation outcome indicated that limited Workers' Compensation recipients had a higher rehabilitation success rate, a higher competitive employment rate, and a lower wage rate at closure than unlimited Workers' Compensation recipients. Analyses regarding rehabilitation process indicated that limited Workers' Compensation recipients had spent less time in the rehabilitation program, received different numbers and types of services, and cost more to rehabilitate than Workers' Compensation recipients receiving unlimited benefits. Findings on process are not definitive since clients may receive rehabilitation services from other agencies which are not accurately accounted for in the data set utilized. Thus, the disincentive perspective, that unlimited benefits may act as a disincentive to return to productive employment, remains tenable. Differences in family income prior to disability, and in level of education, were noted between the two sets of recipients, allowing the possibility that factors other than type of benefit may be important in receipt and outcome of rehabilitation services. Further studies should examine the total set of services, and their costs, that clients receive from all sources to determine if the limited condition is functionally related to the higher rehabilitation success and efficiency rates reported here. Similar studies should be done of recipients of services from private rehabilitation providers to determine if the type of client served, services provided, outcomes and relationships to type of benefit are similar.