Proposed Workers'
Compensation Reform Act of 2001
BENEFITS
INCREASING BENEFITS TO INJURED WORKERS
Current Situation
An employee who reaches maximum medical improvement,
and has an impairment of up to 20 percent, is entitled to impairment
benefits. The employee is paid at 50 percent of his compensation rate.
These benefits are paid at three weeks for each percentage of impairment
(an employee with a seven-percent impairment would receive 21 weeks of
benefits).
If an employee has an impairment of 20 percent or more,
he is also entitled three weeks of impairment benefits for every percent
of impairment. Once this employee with a 20-percent-or-more impairment
exhausts his impairment benefits he may be eligible for supplemental
benefits if he has not returned to work; he is also eligible if he has
returned to work but is receiving less than 80 percent of his pre-injury
wage. Supplemental benefits are payable at a rate of 80 percent of the
difference between 80 percent of the employee’s average weekly wage and
any wages he earned during the reporting period; the benefits cannot
exceed the employee’s maximum compensation rate. If the employee has not
returned to work, he must conduct a job search during the reporting period
and submit the results of that search to the carrier to retain eligibility
for supplemental benefits.
In some cases, this benefits schedule does not give
employees the benefits they need. With the litigiousness of the system,
many employees are turning to lawyers to increase their benefits beyond
what was intended by having themselves declared permanently and totally
disabled. As a result, the number of permanent-total cases has increased
from four percent of the benefit system in 1994 to 17 percent. Claimants’
lawyers are abusing a loophole in the law that allows use of the Social
Security disability test to claim permanent-total disability, even if the
claimant has not been declared eligible for Social Security disability.
Recommendation
This legislation would close the Social-Security
loophole by stipulating that eligibility for permanent-total disability
must be based on objective findings of disability caused by the work
injury.
This proposal would also increase the compensation
amount for impairment benefits from 50 percent of the injured employee’s
compensation rate, to 66 2/3 percent. If an injured worker had a
seven-percent impairment rating and a compensation rate of $200, his total
impairment benefits would increase from $2,000 (21 weeks at $100 per week)
to $2,814 (21 weeks at $133.34 per week).
