Entitlement to Benefits-Module 3 of 6

Entitlement to Benefits

          If a worker can show that he was injured by accident, during an employer-employee relationship, and that the injury arose out of and occurred within the course of employment, he is likely entitled to workers’ compensation benefits. Generally, there are four types of benefits: temporary disability, permanent disability, medical, and death.

Temporary Disability Benefits

Temporary disability benefits compensate an injured worker for his wage loss during the healing process. Temporary benefits continue until he either reaches a limit imposed by state law or “maximum medical improvement.” Maximum medical improvement occurs when the employee’s condition plateaus, and he is believed to be as close to his pre-injury condition as he will ever become.[1] maximum medical improvement must be evidenced by the patient’s medical providers, usually in the form of treatment records, a medical questionnaire, or by deposition of the medical provider. Once the worker has reached maximum medical improvement, benefits shift from temporary to permanent benefits, if the workers’ compensation court determines that the worker has a continuing, permanent disability.

If an employer admits that the employee is entitled to compensation, the employer must begin temporary benefit payments within a short time (often 14 days) of becoming aware of the injury. This means that benefit payments can be due even before there has been a hearing of any kind. If the employer denies compensability of the injury, the employer is not required to make payments and the contested process begins. However, some states allow the employer to make payments, without prejudice, meaning that the court will not interpret the payment of temporary benefits as an admission of liability. This is usually done only if the employer is without sufficient evidence to admit or deny compensability.[2]

Temporary total disability benefits

Temporary disability benefits can be either partial or total. An injured worker will receive temporary total disability benefits if the injury makes him unable to do work of any kind during the time before he reaches maximum medical improvement.[3] Most jurisdictions provide weekly benefits of two-thirds the worker’s average weekly wage prior to the injury.[4] For example, if a worker earned an average weekly wage of $900, he would receive total disability benefits in the amount of $600 per week.

However, state laws often cap total disability benefits at a certain percentage of the average weekly wage in that state. For example, Iowa, Vermont and New Hampshire historically allow benefits as high as 150% of the state average weekly wage. However, New York has historically capped weekly benefits at 50% of the state average weekly wage.[5]

State law also often limits the duration of benefits. For example, South Carolina and North Carolina limit total disability benefits to 500 weeks, though North Carolina provides a process for potential extension of that duration, under special circumstances.[6] Check the law in your jurisdiction to be certain about what limitations may apply.

Temporary partial disability benefits

A worker will receive temporary partial disability benefits if the work injury leaves him only partially unable to work prior to maximum medical improvement.[7] For instance, he may still be able to work part-time or light duty. Alternatively, the employer may be able to provide a different, temporary job for the injured worker until he reaches MMI.[8] Most jurisdictions provide weekly temporary partial disability benefits of two-thirds of the difference between the worker’s average weekly wage prior to the accident and the average weekly wage that he is able to earn since the accident.[9] For example, if the worker earned $1,000 per week prior to the accident, but now he can only earn $700 per week, he would be entitled to temporary partial disability benefits of two-thirds of the difference, or two-thirds of $300. This would produce weekly benefits of $200.

As with total disability benefits, the amount of temporary partial disability benefits that an injured worker can receive may vary state by state. For instance, South Carolina caps temporary partial disability benefits at three hundred forty weeks, while North Carolina allows temporary partial disability benefits to continue for up to 500 weeks.[10] Furthermore, if an employee first receives temporary partial disability benefits but later is unable to continue work of any kind, his payments may switch to total disability benefits. In this case, if the jurisdiction provides a limitation upon the number of weeks of temporary benefits that the worker can receive, then the limitation will likely be applied to the combined number of weeks of temporary benefits, meaning the number of weeks of temporary partial disability benefits received plus the number of weeks of total disability benefits received cannot collectively exceed limit imposed by state law.[11]

Also like total disability benefits, jurisdictions often limit not only the duration, but the amount of weekly temporary partial disability benefits that a worker can receive. Again, this limitation is usually based upon the average weekly wage within the state. The statewide average weekly wage is recalculated at regular intervals to accurately reflect the economics of the state population.[12]

Permanent Disability Benefits

Permanent disability benefits compensate an injured worker for the permanent loss of earning capacity resulting from the work-related injury. It is awarded only after the injured worker attains MMI. However, the amount of permanent benefits that an injured worker is entitled to may be modified after the permanent award, if the employee can show a change in circumstances to justify modification. As with temporary benefits, permanent disability benefits can be partial or total.

Permanent total disability benefits

Permanent Total Disability benefits are awarded when a worker is permanently and totally disabled from working; he is not expected to return to work of any kind. Whether a worker is entitled to permanent total disability may depend upon not only his injury, but upon factors such as his level of education, level of work skills, and age.[13] The lower a worker’s education and skill level, or the older a worker is, the more limited his options for returning to work may be.

State statutes may outline specific types of injuries for which there is a presumption of permanent total disability, or they may outline a specific list of injuries which are the only types of injuries for which a worker can acquire permanent total disability benefits. For example, North Carolina law outlines four types of injuries for which a worker may seek permanent total disability benefits. These include: bilateral loss of hands, arms, feet, legs, or eyes; paralysis of both arms, both legs, or the trunk; severe brain or closed head injuries with particular characteristics; and second or third degree burns to one-third or more of the body.[14]

          Just like temporary benefits, permanent total disability benefits are paid at a rate of two-thirds the worker’s average weekly wages at the time of the accident. Most states allow permanent total disability benefits to continue for either the actual period of disability or for the worker’s life. For example, after an award of permanent total disability benefits is made, the employer may be able to cut off permanent total disability benefits if at some future time the employer is able to show that the employee is in fact capable of returning to work.[15] However, state law may designate that workers suffering certain injuries are entitled to lifetime benefits, regardless as to whether they in fact return to work. North Carolina provides this non-rebuttable presumption for workers who lose both of their hands, arms, feet, legs or eyes.[16] Other states may unilaterally limit permanent total disability to a finite number of weeks, regardless of the injury. For instance, South Carolina caps permanent total disability benefits at five hundred weeks, except where the worker has specific injuries, including paraplegia, quadriplegia, or brain damage.[17]  

Permanent partial disability benefits

          Permanent Partial Disability benefits are intended to compensate a worker for his permanent partial limitation on earning capacity due to the work injury. This means the worker is expected to return to work after maximum medical improvement, earning lower wages than he earned before the work-related injury.

Most states have a dual-approach system for calculating permanent partial disability benefits – one “scheduled” and one “nonscheduled.” “Scheduled” permanent partial disability benefits are calculated using a specific number of weeks of benefits that state law assigns (or schedules) for the injury of a particular body part.[18] For example, if New York law assigns 312 weeks for the arm, then if a worker loses his arm, he is entitled to 312 weeks of permanent partial disability benefits. If the worker loses fifty percent use of his arm, he is entitled to 156 weeks of benefits, or 50% of 312 weeks.[19]  

As with temporary benefits, states usually provide permanent benefits at the rate of two-thirds the worker’s average weekly wage before the accident. Therefore, if a worker’s average weekly wage before the accident was $500, then he would be entitled to two-thirds of $500 ($333.33) each week. If the worker lost his arm, he would receive $333.33 per week for 312 weeks, or a total of $103,998.96. If the worker lost 50% of his arm (or 50% use of his arm), then he would receive $333.33 per week for 50% of 312 weeks, or 156 weeks. This would total $51,999.48 in PPD benefits.

Of course, statutory schedules cannot list all possible types of injuries. Therefore, states use various systems to calculate the benefits to which workers are entitled if they suffer nonscheduled injuries, these include: the impairment approach, the earning capacity approach, and the wage-loss approach.

The impairment approach is used in New Jersey and bases benefits on how serious the medical consequences of the injury are, but may not specifically consider the likely impact upon future earning capacity for the individual worker. Instead, other states like Iowa use the loss of earning capacity approach, which considers both the seriousness of the injury and the likely affect that the worker’s education, work experience, and age have on anticipated future earnings. The impairment approach and the earning capacity approach do have one thing in common however; the recipient of benefits under both approaches receives the fixed number of weeks of benefits, regardless as to whether he actually suffers wage loss.

A third common approach for determining permanent partial disability benefits for unscheduled injuries is the wage-loss approach. This approach, used in New York, provides benefits only if the injured worker shows both: that he suffered an injury with permanent medical consequences, and that he therefore, has actual wage loss.[20]

Medical Benefits

Injured workers are generally entitled to medical treatment that is reasonably required to cure or relieve the symptoms of the work-related injury.[21] Such treatment and expenses may include doctor visits, medications, surgeries, hospitalizations, physical therapy, nursing services, and equipment. An employee may also be entitled to travel expenses associated with medical treatment, including mileage, lodging, and food.[22]

The injured worker is not responsible for deductibles or co-insurance payments. Additionally, the worker can usually receive medical benefits for as long as they are medically needed.[23] The benefits are generally not limited to a specific number of weeks as with disability benefits. In fact, if a worker is permanently disabled, he can generally receive medical benefits related to the workers’ compensation injury for the remainder of his life.[24] However, some jurisdictions may limit the duration of medical benefits associated with a permanent partial disability to a certain number of years following the completion of wage compensation benefits.

          The injured worker is generally obligated to accept medical treatment that is deemed necessary by his treating physician or the workers’ compensation administrative body. If the claimant refuses treatment, the employer may have the right to suspend weekly disability benefits until the claimant complies, unless the court finds that the claimant’s refusal of treatment was justified.[25] Furthermore, there is no guarantee that the worker will ever be repaid compensation for the period of refusal, though back pay of compensation may be allowed in some jurisdictions.[26]

State laws vary regarding which party – employer or employee – is entitled to choose the treating physician. For instance, in South Carolina the employer usually chooses, but in New York the employee usually chooses.[27] Injured workers should be aware that employers are allowed reasonable access to medical information regarding the injury or disease for which the employee is seeking benefits. However, the states have an interest in protecting an employee’s ability to communicate confidentially in a physician-patient relationship, as honest communication makes for better treatment and end results. Therefore, state laws outline limitations and requirements that apply to communications between the employer and the medical provider, including when prior or contemporaneous notice of a communication must be given to an employee, and when written or oral communication between the employer and the medical provider are allowed.[28]

Death Benefits

Death benefits can apply in two situations. First, if a worker dies from his work-related injury, whether on the date of the accident or at some later point. Second, they come into play if an injured worker dies due to some non-work-related cause before he has received all of the workers’ compensation benefits to which he was entitled.

If a worker dies from his work-related injury, the benefits to which he would have been entitled as well as limited burial expenses generally pass instead to his dependents, partial dependents or next of kin. Who receives the benefits will depend upon the jurisdiction’s specific rules regarding priority, and sometimes law imposed presumptions about which family members (usually spouses and minor children) are wholly versus partially dependent. [29]

If death does not occur immediately due to the work-related injury, state law may put limits on the time frame within which death must occur for benefits to pass to the deceased worker’s family. For instance, North Carolina law requires that the worker pass either within six years of the date of work injury, or within two years of the determination of compensability for any benefits to pass to the deceased’s family.[30] Additionally, state laws may vary as to whether the same amount of benefits pass to a deceased worker’s family as would if the worker had survived.[31]

          If death results from some cause unrelated to the work injury, but before the injured worker has collected all benefits to which he was entitled, benefits generally pass to his whole dependents, partial dependents, or next of kin, again in accordance with the jurisdiction-specific rules of priority.[32]