|Pennsylvania Workers’ Compensation| & Disability Lawyer

“I settled a workers’ compensation case for a client several years ago. She injured her knee and had surgery. Now she has just been approved for SSD for a different medical condition. Will Social Security take an offset when the claims were based on different injuries?”

“Yes,” I answered. My colleague was operating under the common misconception that the injury which is the foundation of the WC claim affects whether Social Security will take an offset. If one recalls the reason for the WC offset, the answer is more intuitive.

The offset was created to prevent a worker from collecting both SSD and WC benefits and, thus, receiving more in total disability benefits than the income she received when she was working. The belief behind the rule is that the receipt of benefits exeeding prior income would create a disincentive to medical recovery and return to gainful employment. If that is the purpose, then the indentity of the injuries underlying the claims is clearly of no relevance.

“If that’s the case, should I have included offset language in the Compromise & Release Agreement? I didn’t. She told me she was going back to work and she did. Does that mean my client’s SSD will be reduced?”

“Probably not,” I answered. “It depends on how the numbers work out. But, if the case settled several years ago, the offset has probably already been exausted.” When we crunched the numbers, the offset had, in fact,  expired before the first month of the client’s entitlement to SSD benefits.

Remember, Social Security’s “default” calculation for an offset is to convert the last effective weekly rate into a monthly amount.  If that rate was the client’s total disability rate, as it often is when a WC case settles, then the resulting credit period (monthly rate divided into net settlement amount) is usually 2-3 years.

When we use the lifetime proration language pursuant to Sciarotta v. Bowen  and POMS DI 520001.555 (C) (4), we are manipulating the credit period to affect a reduction in the monthly offset rate. While using this language is generally safe, it is not always the best option. If it is not anticipated that the worker might be going on SSD until several years after the settlement, it might be better to choose the “default” calculation and eliminate the offset credit more quickly.

That possiblity is especially true when we recall that the Social Security Administration has historically expressed disfavor for the lifetime proration method and has attempted to eliminate that method on numerous occasions. If one factors in uncertainty regarding the future viability of the lifetime proration method, early elimination of the credit period becomes an even more compelling option.

“Well, if Social Security doesn’t care about whether the work injury and the disabiling condition are the same, then did we need to consider an MSA, or do an informal set-aside? I didn’t put that in the agreement either.”

“No,” I replied. But not for the reason my colleague was considering. First, his client’s case did not meet any of the criteria set forth by CMS as requiring a formal MSA.  Second, unlike the offset rule, the need for an MSA is dependent upon the nature of the accepted work injury, very dependent. In the case of this colleague’s client, she had undergone surgery and had not had any treatment for the knee for some time. The purpose of an MSA is to protect Medicare from an inappropriate transfer of work related medical expenses from WC to Medicare. Because the client’s treatment for the work related injury had concluded, no inappropriate transfer could occur and no informal MSA was needed.

The American Recovery & Reinvestment Act, otherwise known as the “stimulus package” provides important relief to workers who have involuntarily lost their jobs and can pay COBRA premiums to continue their health insurance. The relief is temporary, but it is significant. It makes health insurance more affordable for the injured or disabled worker.

Previously, injured workers on workers compensation benefits could rarely afford the COBRA premium. While working, the premium was fully paid or partially paid by their employer. After becoming disabled, it was not unusual for the premiums to cost as much as $600.00 per month or more for family coverage.

The inability to pay this COBRA benefit left workers in an insurance gap. They were covered for their work injuries, but they and their families were left uncovered for other health issues.

Some could obtain insurance for their children through the Pennsylvania CHIP program, but few were able to collect Pennsylvania Adult Basic Coverage.  Even if they qualified, the wait to receive benefits left them uninsured for months if not years. They received too much income from workers comp to qualify for Medical Assistance.

Disabled workers also fell into the insurance gap. If they successfully proved they were disabled, those workers had to wait 29 months from the onset of their disability to obtain Medicare coverage. During that period, they too received income that disqualified them from receiving Medical Assitance and had to wait long periods to receive Pennsylvania Adult Basic, even if they were financially qualified.

ARRA provides that eligible individuals need only pay 35% of the monthly premium. The premium reduction lasts for up to 9 months. If your employment was involuntarily terminated from September 1, 2008 through December 31, 2009, you may be eligible for the reduced premium. You may e eligible even if you previously declined COBRA coverage, or accepted it and discontinued it. Call your employer’s HR department or go to the Department of Labor’s website for more information.

Two times in the last two days, I have successfully obtained reinstatement of workers compensation benefits for a client because the employer’s insurance carrier failed to pay attention to the details. Like a criminal defendant who “got off on a technicality,” my clients avoided the aggravation of fighting to prove their case. My clients avoided the need to prosecute a reinstatement petition for months all while not getting paid their benefits. Instead, they are getting their benefits right away.

In the first case, the worker’s benefits were suspended last summer when he returned to work without a loss of wages. The employer or its insurer should have filed a Notice of Suspension at that time, but they did not. Recently, the worker was laid off due to economic circumstances. We applied for reinstatement of benefits arguing that his loss of income had recurred through no fault of his own. We discovered the absence of a Notice of Suspension when we requested the case records from the Bureau.

Because the employer did not file the Notice of Suspension, the last controlling document was the Notice of Compensation Payable. That is a document directing the payment of benefits. The employer agreed that it had to reinstate benefits, rather than fight the petition. If the employer would have chosen to fight the petition, it would have exposed itself to an additional claim for attorneys’ fees for unreasonable contest.

I am sure that the employer will file a petition to contest ongoing entitlement to benefits. But instead of fighting his case for months while not getting paid, my client will be getting paid while the fight is waged, clearly a much better alternative.

In the second case, the worker was provided with a copy of a medical report by an employer’s examining doctor (IME) indicating that he was fully recovered and could return to work. One problem, the employer was required to provide my client with a Notice of Ability to Return to Work on an approved Bureau Form. It did not do so.

My client attempted to return to his job, even though his doctor’s did not consider him fully recovered and he did not believe he could perform that job. His attempt to return to work failed.

In this case, the employer did file a Notice of Suspension based on the worker’s return. But, it did not file the Notice while the worker was actually back to work. Section 413(c) of the Pennsylvania Workers’ Compensation Act provides that the employer “may suspend the compensation during the time the employee has returned to work at his prior or increased earnings upon written notification.”

I successfully argued that the employer’s suspension of benefits was procedurally defective because it failed to issue a Notice of Ability to Return to Work and because it failed to issue the Notice of Suspension while the worker was back at work. My client’s workers’ compensation benefits were reinstated.

Like other areas of the law, there are many rules that one must know and many little details that can mean the difference between success and failure in a workers’ compensation case. When the ability of an injured worker to support his family is at stake, the services of a knowledgeable workers’ compensation lawyer are obviously crucial.