Members of the claims management team need to be mindful of their files when the injured worker is receiving wage loss benefits, including temporary total disability (TTD) benefits. While these benefits are mostly capped, failure to pay only these benefits the employee is entitled to can significantly raise the cost of a claim and negativity impact your program’s bottom line.
Payment of TTD Benefits
The majority rule is TTD benefits are paid to a claimant at two-thirds of their average weekly wage. In some jurisdictions, there is a three- to seven-day waiting period before the payment of TTD is to commence following disability. These benefits are payable to the employee following an injury when based on their physical condition, in combination with age, training and experience and the type of work available in this community, they are unable to secure anything more than sporadic employment. A cap on the number of weeks TTD benefits are payable is in force under most workers’ compensation acts.
Discontinuing the Payment of TTD Benefits
There are a number of instances where employers/insurers can terminate the payment of TTD benefits. These defenses to the payment of wage loss benefits are defined by statute and subject to limitations and other due process considerations. In some instances, benefits will terminate once a condition is met and or post-discontinue period expires. Statute will also define how the payment of TTD benefits will recommence.
Being proactive claims handlers requires a diligence in looking for legal and ethical opportunities to discontinue the payment of TTD benefits. Some common instances include:
- Refusal of job offer: Injured workers sometimes lose the ability to choose what type of work they perform following a work injury. Refusal of an offer of gainful employment within the employee’s physical restrictions or a rehabilitation plan can result in loss of ongoing TTD benefits. This is based on the premise that the injured party must mitigate their losses.
- Withdrawal from the labor market: Following a work injury, an employee is required to remain in the labor market provided they are not completely restricted from work. Simply put, sustaining a work injury does not entitle someone the opportunity to take a vacation, spend time at his or her cabin, or move to a warmer climate. (subject to applicable FMLA laws)
- Attainment of maximum medical improvement (MMI): Reaching the end of one’s healing can serve as a basis for discontinuing TTD benefits in many jurisdictions. MMI signifies the end of healing, assignment of permanent restrictions, if any, and a determination regarding permanent partial disability (PPD) benefits. This can be determined via the employee’s treating doctor or following an independent medical examination (IME).
Termination of wage loss benefits is dependent upon each jurisdiction’s workers’ compensation act and case law interpretations. Claim handlers need to understand what events can trigger a discontinuation of benefits. They also must understand the nuances within the law to effectivity make such determinations. Understanding these concepts can lead to significant savings in any program.
Author Michael Stack, CEO Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .
Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.