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Why Vocational Rehabilitation is Far Superior to Settling Away Rehab
by Ed Coletti (Published in The California Association of Rehabilitation and Reemployment Professionals (CARRP) Newsletter - February 2003
Welcome to the New Year! I would like to present a graphic picture of precisely why vocational rehabilitation is far more profitable both quantitatively and qualitatively to the injured worker than would be "settling away" rehab for up to $10,000. While my perspective is self-employment, I fully believe that my ideas apply equally as well to virtually all rehab situations. Under the new system, timeliness on the part of all parties will be extremely important in order to insure the full measure of benefit to the injured worker. Granted he or she still has the potential of $16,000 under the cap, but frequently, in the past, up to $4,000 was eaten up in VRMA prior to the plan. If the plan can be written within say one month or so of referral, then the situation might be as follows.
Let's say the injured worker and counselor agree to evaluate a small business option, e.g., a taco lunch truck. The injured worker chooses to utilize $17,000 from his or her PD award to purchase a used fully-inspectable lunch truck.
Rehab assists as follows:
1. $ 2,000.00 To the rehab counselor over the life of the case.
2. $ 980.00 For a thorough business management analysis, research, business counseling and report.
3. $ 2,000.00 For VRMA during the life of the plan monitoring (approximately 2 months).
4. $ 1,000.00 Included from the past VRMA incurred during plan development.
5. $10,000.00 Still available for other business considerations including inventory, insurances, advertising, printing, approved commissary costs, rents, licenses and permits, bookkeeping and accounting, fuel, supplies, tables, chairs, canopy, truck painting and lettering, etc. Additionally, should the carrier agree, a portion of the actual cost of the truck may be run through rehab instead of all through the PD award, etc. Likewise, there is also room here to consider additional VRMA and monitoring as necessary.
$15, 980.00 Total rehab expenditure
Now consider what the IW would have missed out on by "settling away" his or her rehab for only $10,000 or less. Losses would include all guidance from the rehab professional and business management consultant as well as the loss of most of the VRMA and probably also some of the specific business contributions. Literally then, quantitative comparison is between the dollar amounts of $10,000 or less versus $16,000 and the choice appears to be a no-brainer. Qualitatively, the choice is even more stark: "professional guidance versus no guidance." Future liability to the carrier may also be at stake.
In this regard, please once again refer to the case of the injured Sacramento Valley worker who wanted to buy a small Mexican grocery store for $20,000 with $10,000 down. The owner had presented an attractive but completely bogus picture to our client. I took a look at everything and found that the store was netting next to nothing. When I told our client, he embraced me and thanked me for saving him and his nine kids from the devastation inherent in throwing away $10,000 and having to come up with at least another $20,000 to complete the purchase and to stock the store. Had he been able to "settle away" rehab for $10,000, he not only would have thrown away the money but also would have quickly been in much greater debt and bankruptcy.
Thank you for your attention to all of these realities. Please consider them carefully during your deliberations in the future.
Since 1978, Business Management Consultant Ed Coletti has utilized a second graduate degree in Management to perform self-employment plan analyses for vocational rehabilitation counselors, carriers, attorneys, and their clients. Ed has provided training in self-employment to rehabilitation counselors and carriers at CARRP conventions at both Disneyland and San Diego. Mr. Coletti can be contacted at Edward J. Coletti Management Services Telephone 877-771-7100 toll free or (707) 523-4811. Fax is (707) 523-0927. |
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