Part 2: Discontinuing Workers’ Comp Temporary Total Disability Benefits

Once a claim has been admitted, the claim handler assumes a pivotal role in managing the file and ensuring all necessary workers’ compensation benefits are paid. As we discovered in the first part, the success of the discontinuing process hinges on the development of facts to support the decision and ensure success. Neglecting to close review and maintain one’s files can lead to excessive paid benefits and program inefficiency, underscoring the crucial role of the claim handler in this process.

Layoffs: Seasonal, Economic, and Labor Union Strikes

An employee is entitled to receive TTD benefits when the work injury substantially contributes to the wage loss. Layoffs for season and economic challenges present unique circumstances:

• Requirements that the employee immediately commence a diligent job search to mitigate the wage loss paid or

• There is a limitation on when the laid-off or terminated employee can recommence payment of TTD following the last period in which the benefit was paid.

When the potential recommencement of these benefits is in question, it is the claim handler’s responsibility to proactively investigate the circumstances surrounding the employee’s departure. This includes communication with employer representatives to determine whether the departure was seasonal or economic, empowering the claim handler to take charge of the situation.

Labor union strikes require a certain level of caution. Generally, employees are not entitled to receive wage loss, including TTD benefits, when the union is on strike. The rationale is that these decisions are voluntary, and wage loss is not connected to work injury.

Termination of Employment for Misconduct

Experienced claim handlers know that handling terminations for misconduct and paying TTD benefits requires skill and investigation. Failure to do so will reduce the efficiency of your workers’ compensation program, including unnecessary litigation and attorneys’ involvement.

As outlined above, any wage loss benefit is generally only paid when the work injury substantially contributes to disability. As with a termination for “misconduct,” TTD benefits are not payable. It is crucial to understand that the term “misconduct” needs to follow the parameters and definitions found in the applicable workers’ compensation act and unemployment compensation laws.

To further complicate matters, many jurisdictions have created a multi-tiered level of “misconduct by defining those actions by the employee that permit reinstatement of TTD once a diligent job search is commenced, and actions where the employee forfeits their right to any future payment of TTD.

In addressing these issues, proactive and dedicated claim handlers must do the following before deciding on approving a request for payment or discontinuance of TTD benefits involving a termination for misconduct:

• Communicate with employer representatives and obtain all necessary facts surrounding the termination;

• Review the facts surrounding the termination with defense counsel and seek an opinion as to whether the facts rise to the level of egregious conduct to fit the statutory definition of “misconduct;” and

• Evaluate all options and make a reasoned determination to help best move a claim toward a final settlement.

Opportunities like these are available to evaluate or work with a new defense counsel seeking a claim handler’s business.

Non-Cooperation with Medical Care

Before considering this defense, remember it is rarely used, and even more rarely is it successful. Given these circumstances, it is vital to keep it in mind when reviewing the following factors:

• The age and overall health of the employee;

• The intrusiveness of any proposed medical procedures and associated dangers;

• The potential for adverse medical complications;

• Availability (or absence) of expert medical opinions regarding the likely outcome(s);

• Probability to success and level of improvement in the employee’s medical condition;

• Other factors, such as possible pain and discomfort following a procedure;

The use and ability to succeed using this defense of the payment of TTD is mainly due to personal autonomy and the desire to prevent outside parties from becoming the ultimate arbiter of what medical care an employee must undergo.

Fraud or Misrepresentation

There is also the opportunity to not pay TTD benefits based on fraud or misrepresentations the employee may have made related to their physical condition in the pre-employment process. The development of this defense is based on permissible questions an employer is allowed to ask during the hiring process.

In jurisdictions that allow for such a defense, the following elements are required based on a preponderance of the evidence:

• The employee knowingly and willfully made a false representation of this physical disability;

• The employer substantially and justifiably relied on the employee’s false representation and

• The work injury was a proximate cause of the false representation.

Case law supporting this defense’s successful use is found in Jewison v. Frerichs Construction, 434 N.W.2d 259 (Minn. 1989).

Recent changes in many jurisdictions that limit an employer’s ability to ask about physical restrictions or limitations before employment have significantly curbed the usefulness of this defense. This provides an opportunity to consult with an attorney specializing in employment law issues to examine how this defense can be used when creating processes for hiring new employees.

Conclusions

Claim handlers and other defense stakeholders must be vigilant when determining the payment of wage loss benefits. This series suggested investigating these issues and working with defense counsel and employer representatives to run an effective workers’ compensation program.

Michael Stack, CEO of Amaxx LLC, is an expert in workers’ compensation cost containment systems and provides education, training, and consulting to help employers reduce their workers’ compensation costs by 20% to 50%. He is co-author of the #1 selling comprehensive training guide “Your Ultimate Guide to Mastering Workers’ Comp Costs: Reduce Costs 20% to 50%.” Stack is the creator of Injury Management Results (IMR) software and founder of Amaxx Workers’ Comp Training Center. WC Mastery Training teaching injury management best practices such as return to work, communication, claims best practices, medical management, and working with vendors. IMR software simplifies the implementation of these best practices for employers and ties results to a Critical Metrics Dashboard.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

Injury Management Results (IMR) Software: https://imrsoftware.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.