Navigation Work Comp and Other Benefits
Cindy Speaker: Good afternoon, and welcome to our broadcast today. My name is Cindy Speaker and I have with me as my guest, Worker’s Compensation Attorney, Bill Kovalcik of Michael J. O’Connor and Associates. Bill, thanks for being with us again.
Bill Kovalcik: Good morning, Cindy. It’s always a pleasure.
Cindy Speaker: Same here. Well, Bill, we’re going to talk about worker’s compensation and we’re going to talk, we’re looking forward to you sharing a little bit about, how do worker’s compensation benefits interact with other types of benefits, such as unemployment compensation?
Bill Kovalcik: Right. Yeah, a very important area. When an individual comes to us to be represented, it’s important for us to take into account, everything else that they may be entitled to, in addition to worker’s comp. The reason is, those benefits affect each other. We have to evaluate and assess what’s best for the person to advise them.
Cindy Speaker: Right.
Bill Kovalcik: For instance, unemployment compensation. It didn’t use to be this way, but a number of years ago, the Legislature changed the law, such that if you received unemployment benefits, you couldn’t receive them concurrent with worker’s comp. The worker’s company would get the right to reduce your benefits based on your receipt about employment. Your net unemployment that you would get your monthly benefit.
Now, this comes into account, often when somebody is separated from employment and hurt at the same time. You don’t get people who, shortly after they were injured, they were terminated or laid off, or it applies to people who are on worker’s comp or on light duty, and the plant closes, and they’re entitled to unemployment.
Generally, what we’re going to say to people is, if you’re receiving the worker’s comp benefits, you shouldn’t attempt to go on unemployment. That’s our first advice because it’s just going to reduce your worker’s comp.
Cindy Speaker: I see.
Bill Kovalcik: That’s not in your best interest. Worker’s comp is a superior benefit, you should get that, mostly. However, there are times when someone comes to me with a denied claim. If they have a denied claim, what that means is, I’m going to have to go to court to get those benefits for that individual. They’re not receiving worker’s comp benefits, but they’re injured, and they’re unable to do their usual employment.
If they also happen to be separated from employment, they may be entitled to unemployment benefits during the period of time that we are in court litigating. That allows people to sustain themselves with some income when, until they get their worker’s comp.
Cindy Speaker: Okay.
Bill Kovalcik: Now, when they get it, the insurance company is going to owe them retroactive to when they were first injured. However, they’re going to get a credit for all the unemployment that was received by that individual, which is fine because they needed that money in the interim.
Cindy Speaker: Yeah.
Bill Kovalcik: That’s how it comes into play. The thing about unemployment that a lot of people don’t understand is this, if you’re injured and you’re unable to work at all, you’re not eligible for unemployment. To get unemployment, you have to be able to work in some capacity.
It’s available to people who are not totally disabled, but say, partially disabled. They can’t do the heavy job, but they’re released to do some type of light work. Those people can get unemployment and still move forward with their worker’s comp because in that forum, they’re trying to prove they are disabled from their usual, usually more heavy job. Okay?
Cindy Speaker: Right.
Bill Kovalcik: That’s the first benefit. One of the most common ones that we see. Another one that we come across a lot is, the Department of Human Services in Pennsylvania. People who don’t have health insurance, we find, often will apply for a medical insurance through the Department of Human Services, used to be the Department of Public Welfare, same thing, but … they will receive some type of health insurance.
It used to be that that health insurance was provided by the Commonwealth, but now, they are contracting that out to various private health insurance companies like Geisinger or Aetna. Somebody will end up with a coverage paid for by the state. Now, the reason that’s significant is, again, in these situations where someone has a denied claim, we often find, well, they have no health insurance. They have no way to treat if they have a denied claim.
They go to the state, they get this insurance. That insurance pays for their treatment, in the interim, while I’m litigating and trying to make it work-related. However, we have to account for that. That becomes what is called a lien. That at the time, we are either victorious or we settle it. The Commonwealth has to be paid back by the liable worker’s comp insurance.
That’s another thing that we have to take into consideration because it’s something that can’t be overlooked. You can’t ignore it. By operation of law, they have a lien, so we got to pay back the state in all instances. Also, what we find is, Social Security Disability is another concurrent benefit that a lot of clients will come into.
Now, generally, we will say to people, that if you feel you’re totally disabled, Social Security disability may be an option along with worker’s comp. Whether or not you should do it immediately, is the question. This is where legal advice comes in.
Some people, if they’ve had a devastating injury, I might say to them, look, you might as well file for Social Security disability now because you’re never going back to work. You might as well maximize your benefits. Sometimes that will happen, but in most instances, when the injury is not immediately catastrophic, or totally disabling, I will say to people, let’s hold off on that Social Security until we settle your comp.
There’s a reason for that, because once you’re on Social Security and Medicare, you can’t just settle your comp. You have to get Medicare’s permission. You have to set up what is called, a Medicare Set Aside and sometimes insurance companies are turned off by that cost and we’re unable to resolve the case. Every case is different and that is where legal advice comes in.
Cindy Speaker: Which is the superior benefit, Social Security disability or work comp?
Bill Kovalcik: Social Security disability generally does not pay as much.
Cindy Speaker: Okay.
Bill Kovalcik: That’s that, but … And there’s also, you can’t collect both, just like in unemployment. In this instance, it’s not the comp that takes the credit, it’s the Social Security disability. Some people, if they’re receiving a significant amount of worker’s comp and they want to go on Social Security disability, they will not receive any significant benefit from Social Security disability, hence, they should wait until the comp is over.
Some people who have a really significant earning history will receive a nice Social Security disability payment, which it allows them to supplement what they’re getting. For people who are clearly not going back to work, I’d recommend it, but, it’s a case-by-case basis on all of that.
Cindy Speaker: Right.
Bill Kovalcik: The other issue that comes up is, if you’re on Medicare, sometimes Medicare pays for a bill that’s work-related, a work comp bill. That’s a problematic too, because again, under operation of law, that becomes an immediate lien on the case. We have to account for that if we’re ever going to settle it. Medicare has to be paid back, so you got to watch that.
Cindy Speaker: Right.
Bill Kovalcik: Medicare shouldn’t be paying for work-related treatment during the time someone has an accepted case. Doctor’s office sometimes bill whoever they bill, that needs to be taken care of.
Cindy Speaker: Yeah. I can see where attorney advice is so important in these situations.
Bill Kovalcik: The mixture of these benefits, some people have more than one, it makes it complicated, so you need to talk to your attorney about this.
Cindy Speaker: Right.
Bill Kovalcik: Another one that’s sort of like, on the same lines as Medicare is, private health insurance. Some people, they have private health insurance and they’ll come to us and they’ve been injured, and the claim’s either denied or accepted. In both instances, whether they have a denied claim or an accepted claim, we find that there are times when their healthcare providers will be billing their private health insurance. Whether they should or shouldn’t, they do it.
Now, sometimes they do it because there’s a denied claim and there’s nothing else to bill. We find that all injured workers, when they go to the healthcare provider, are asked, do you have a secondary insurance. That’s what providers do, they want that on file. If they’re denied by comp, they just bill the health insurance. If they bill them for something that is work-related, that also becomes lien, but not by operation of law. It’s not immediate.
What we find is, though, these health insurance companies will advise our client or us directly, that they’ve paid something and they want it back. That’s called subrogation. Once they advise us, it’s our duty to work that out and make sure they get paid back, either during the case, or at settlement.
Again, another thing to be cognizant of as a practitioner is, does your client have health insurance and how’s that going to play into the whole thing? Another thing that often comes up with older employees is, pension benefits. You see, there’s a number of pension benefits that people may be entitled to at the time they’re injured.
For instance, you’re injured, you’re an older employee, you could retire. Now, if you did that, those pension benefits are going to become a credit against your worker’s comp. Obviously, I’m going to advise people to not retire until I can settle your worker’s comp, because all that happens when you retire is that you get your pension benefits, but your comp goes down. In some instances, way down.
Cindy Speaker: Okay.
Bill Kovalcik: At that point, the settlement value of your case has gone down because the cost, the insurance company has gone way down. Those benefits, pension and severance, sometimes there’s severance, both of those are a credit against comp. That needs to be coordinated with the attorney to make sure our clients maximize what they get and that it doesn’t interfere with their ability to collect going forward and to ultimately settle.
Cindy Speaker: Yeah.
Bill Kovalcik: Now, sort of along that line of retirement, we find that the issue of Social Security retirement comes up because once you reach that age, you would be entitled to take your Social Security retirement benefits. The law is, if you take those benefits after you are injured, 50% of your benefit amount, per month, is a credit against your worker’s comp.
Cindy Speaker: Wow.
Bill Kovalcik: Again, that’s going to reduce your comp quite a bit and we don’t want that. We often will tell people to defer retirement until we can resolve those benefits, so you can maximize what you get. Also, if you retire, sometimes the insurance company will file a petition to try to stop your benefits under the theory that you have taken yourself out of the workplace and no longer need wage loss benefits.
Cindy Speaker: Okay.
Bill Kovalcik: There’s a couple of reasons not to do it. Now, there’s a loophole in this because there are people who are already on Social Security retirement and you can still work. You can earn a certain amount of money and we have those clients. While they’re working, earning this small amount of money, they get hurt. They continue to receive their Social Security retirement, even though they’re on comp and there’s no credit. That’s a loophole in that because those benefits began before.
Cindy Speaker: Yeah.
Bill Kovalcik: So anyway-
Cindy Speaker: So Complicated.
Bill Kovalcik: … again, another reason to talk to your attorney about this because there’s a lot of different variables. One of the other things that comes up is, people will ask me, if they get injured and they are thinking about returning to work, what will happen? Sometimes people, you know, they lose a good job because of an injury, that job was heavy work and they just can’t do it anymore and they want to go back to work, but they want to do it in a lighter capacity, and it won’t pay as much.
Maybe it will be part-time, I don’t know. I explain to them that they can do that, but what it does, it takes their benefits from total disability to partial disability. Once they’re on partial disability, that goes for 500 weeks, however, their benefits are going to go down based on their receipt of wages.
Generally, what we could say is that you shouldn’t go back to work until you resolved your comp. That’s not always practical because if the insurance company doesn’t want to settle and if the individual really needs to work for their mental health or whatever, and people do, then I’ll tell them to go, because productive work is important for people.
Cindy Speaker: Sure.
Bill Kovalcik: All of my clients, I find, suffer being off, being useless, sitting around the house, hurting, sometimes going back to work is the cure that they need.
Cindy Speaker: Yeah. Yeah.
Bill Kovalcik: We have to deal with that.
Cindy Speaker: Right.
Bill Kovalcik: One of the things you might wonder is, how does the insurance company find out about these potential receipt of other benefits? That’s a good question because there’s a system in place for that. The system includes the sending of forms called Verification of Employment. These forms are prescribed by the Bureau of Worker’s Comp. Every insurance company can send them from time to time.
The injured worker must fill them out and if they don’t fill them out and return them in 30 days, they can stop their comp. Just unilaterally like that, so it’s very important. We’re representing somebody, we get involved in that. We make sure we tell them to get them to us and we’ll send them back certified mail.
With these forms, they ask, are you receiving Social Security disability, retirement, pension, severance, unemployment, wages. It’s asks all that so that the insurance company can determine if someone is double-dipping. That’s how they find out.
Cindy Speaker: Okay.
Bill Kovalcik: Now, in Pennsylvania, when we talk about worker’s comp, that covers everybody. If you’re an employee, under the law, the definition of employee in Pennsylvania, then you’re covered by worker’s comp. Of course, that’s assuming your employee, your employer has insurance. That’s another issue, I’ll talk a little bit about that in another episode.
As long as they have insurance, you’re covered. Now, certain employees within the Commonwealth have other coverage, more superior coverage. Those benefits are called either Heart and Lung Benefits or Act 534 or 4632 Benefits. Those are similar benefits but they apply to different people. Heart and Lung Benefits are meant to protect police, firefighters, corrections officers, and other law enforcement type people, and first responders.
If they are injured in carrying out their duties, they can get Heart and Lung. Heart and Lung is full salary, so you get more than you would on the worker’s comp.
Cindy Speaker: We covered this. You covered this in another one, maybe we’ll link that here.
Bill Kovalcik: I did. Right. What occurs to me is, when you get these benefits, your Heart and Lung or 534, again, coordination with the attorney is essential because I will explain why. The 534 Benefits are for people who are assaulted in state mental institutions. Those people obviously want to collect those benefits initially, but they’re also entitled to worker’s comp concurrently.
Sometimes we find the Heart and Lung benefits will stop because the law is different there. Once they stop, they can go on comp, though. It’s up to your attorney to coordinate those benefits to make sure you’re maxing out oh what you get and that’s why I bring that up at this time. I have a lot of clients like that, corrections officers, firefighters, et cetera.
Another big issue when we talk about coordination of benefits or things you may be entitled to when you get hurt, is the whole issue of third-party subrogation. An individual is injured and is injured due to the negligence of a third-party. When I say third-party, what I mean is, someone not connected to the employment.
This usually comes up in the context of a car accident. The truck driver is on the road and someone cuts him off and he goes over the bank, and he gets hurt. He can both collect worker’s comp and sue that other driver. However, what that creates is what is called, third-party subrogation. It’s very complicated, and it’s very important for the attorney to be aware of it, for a number of reasons. Because, now all of a sudden, if he’s going to sue another insurance company that insured that negligent driver, the worker’s comp insurance is subrogated to that award.
In other words, they are entitled to get some money back. We have to be aware of that, especially since the amount that they get back is negotiable. Now, the law provides what they’re entitled, but we find we can negotiate this amount.
Cindy Speaker: Okay.
Bill Kovalcik: Again, to maximize what the injured worker can get from this. I say to a lot of people, sometimes you never get fully compensated for your injury, particularly if it’s really severe. If there’s a third-party case, that allows you to go to another source for more compensation for your long-lasting disability, and that’s third-party subrogation.
Anyway, not only do practitioners such as myself need to be aware of all these other benefits and incomes to coordinate what’s best for the individual while they’re receiving comp, while they’re in the middle of the case. Also, at the end of the case when we’re trying to settle it, we have to be aware of how these things affect settlement.
One of the biggest things I try to bring to people is, the fact that your worker’s comp benefits may be being reduced in the near future, it’s going to reduce the amount the settlement is going to be because settlement worker’s comp is about the future, it’s not about the past. It’s about how much are you costing this insurance company. If you’re about ready to retire and they know it, they’re not going to want to pay you a lot because once you retire, they’re going to be relieved of a lot of money.
Cindy Speaker: Yeah.
Bill Kovalcik: All these issues, and with the Heart and Lung, sometimes we can settle those together with the worker’s comp, get you a little extra money for that. We have to be aware, who do we have to pay back when we settle it. We pay back the state, the health insurance company and if we do, the insurance company has to pay them back. That’s making it more expensive for them. How do we roll this up in a package so they can live with it and get our client what they’re entitled to. That’s basically my feeling on coordination of benefits and how it rolls into settlement.
Cindy Speaker: You know, it’s interesting that, I don’t think the average person is aware of how complicated this is, but just listening to what you’re saying and all this interaction, it really … I just think everyone really needs to have an attorney involved in these situations. There’s no way they would know all of this.
Bill Kovalcik: Correct. There are many times people would come to us after they’ve excepted another benefit that affects their comp. I say to them, well, you’ve hurt your case. You should have come to me early and I think once you … Just for this advice, people get hurt. They should come to the lawyer immediately. It doesn’t cost you anything.
Cindy Speaker: Right.
Bill Kovalcik: If you get some good advice about what you should apply for and not apply for, and how to time that, you’re helping yourself.
Cindy Speaker: Yeah. Before we go, we have a couple minutes Bill, anything new in the law, relative to worker’s compensation?
Bill Kovalcik: One of the hottest things right now, continues to be, House Bill 1840. My colleague, Gerry Mullery is on the Labor Committee in the House of Representatives of Pennsylvania. He and I talk on a regular basis about status of these worker comp bills that are pending, you know, just brief background of course.
The Supreme Court and the Commonwealth Court of Pennsylvania both ruled that a section of the Pennsylvania Worker’s Comp Act was unconstitutional, as it pertains to impairment rating evaluations.
Since then, the Legislature has been attempting to fix it. They, like any Legislature, they can’t just fix it. They have to create other things that each side wants and put it in the bill.
Cindy Speaker: Right.
Bill Kovalcik: They’re currently negotiating over that. It’s an easy fix, believe me, it is. The fix is, and the idea is, to just make it the sixth edition of the AMA Guides, which is the most current. That way, in the past, what the court had a problem with, was it changing all the time without the Legislature approving it. They just, now they’re going to specify. Fine. That fixes it. Now the issue of retroactivity is come up. What about all those people that had their 500 weeks and that’s the essential part of this, partial disability.
Cindy Speaker: I see.
Bill Kovalcik: Limiting a claim to 500 weeks. If that’s running out, now it’s unconstitutional, now what? You get those 500 weeks back? I say yes. However, they want to put in this new bill that the insurance company gets credit for all those partial disability weeks, so that somebody now, under the new law, doesn’t get to start over with a new 500 weeks of disability, but rather, whatever they have left. There’s fighting over that right now.
Cindy Speaker: I see.
Bill Kovalcik: There’s a question about whether putting that retroactivity in there would even be constitutional. What I’m concerned about is, even if this bill does pass, or these amendments take place, there’s going to be more litigation and this IRE question will not be settled in Pennsylvania for a number of years.
They’re also talking about the percentage. Right now the law is, if you’re under 50% disabled, you are now partially disabled. If you’re over 50, you get to stay on total. We could move that number down and they’ve talked about 30, 25, which would theoretically, potentially, make it easier for some injured workers to stay on total disability. That kind of negotiation is going on right now. It’s not final, but I expect it to come up for a vote in the next couple of weeks.
Cindy Speaker: Oh.
Bill Kovalcik: All the legal experts are weighing in on this right now.
Cindy Speaker: Okay. Well, you’ll have to keep us posted on that.
Bill Kovalcik: Sure.
Cindy Speaker: So soon to come. Well, listen, Bill, we’re out of time today, but thank you so much for your time and tell us how we can reach you if someone has questions. Maybe they want to talk to you personally.
Bill Kovalcik: Mm-hmm (affirmative). Right. You could always go to our website, www.OConnorLaw.com and we have an 800 number, 1-800-518-4LAW. You can call us any time for a free consultation and talk to myself or one of the other attorneys.
Cindy Speaker: Outstanding. Thanks so much for your time today.
Bill Kovalcik: Okay. Thank you, Cindy.
Cindy Speaker: Okay. And to those of you watching, if you have questions or comments, you can leave them right on this page. We’ll make sure we get an answer for you. Thanks everybody and have a great day.
