In Georgia, the Workers’ Compensation Act protects an employer/insurer against an injured worker “double-dipping” in their recovery. For instance,
In Georgia, the Workers’ Compensation Act protects an employer/insurer against an injured worker “double-dipping” in their recovery. For instance, where an injured worker is receiving both employer-funded short-term disability benefits and workers’ compensation benefits after a work-related accident, the amount the worker receives in workers’ compensation indemnity benefits may be reduced by the amount they are receiving in unemployment benefits – thereby avoiding any “double-dipping”.
O.C.G.A. § 34-9-243 provides that,
(b) Except as otherwise provided in this Code section or in a collective bargaining agreement, the employer’s obligation to pay or cause to be paid weekly benefits under Code Section 34-9-261 or 34-9-262 shall be reduced by the employer funded portion of payments received or being received by an employee pursuant to a disability plan, a wage continuation plan, or from a disability insurance policy established or maintained by the same employer from whom benefits under Code Section 34-9-261 or 34-9-262 are claimed if the employer did contribute directly to such a plan or policy. The employer funded portion shall be based upon the ratio of the employer’s contributions to the total contributions to such plan or policy.
There are some caveats to this statutory provision, such as a statute of repose which requires the employer/insurer to file their request for reimbursement within two years from the date any overpayment was made. O.C.G.A. § 34-9-245. Further, the employer/insurer is only able to recoup credit for amounts which the employee is entitled to, has received, or is receiving during any period in which TTD or TPD benefits are claimed. O.C.G.A. § 34-9-243(c).
Thus, in cases where a claimant has already received payments pursuant to an employer-funded disability plan, wage continuation plan, or disability insurance policy in addition to a workers’ compensation indemnity check for the same period of time, the employer/insurer is able to recoup the amount paid pursuant to an employer-funded disability plan, wage continuation plan, or disability insurance policy against any future temporary-total or temporary-partial disability payments (“TTD” and “TPD”, respectively), so long as the employer/insurer files their request for reimbursement within two years of the date of overpayment.
Now, the question is: how does the employer/insurer actually take credit for the overpayment? O.C.G.A. § 34-9-245 states that if the board finds that a claimant has received an overpayment of income benefits from the employer, for any reason, the board shall have the authority to order repayment on terms acceptable to the parties or within the discretion of the board.
In theory, this recoupment will be quite simple if the employee is receiving payments pursuant to an employer-funded disability plan, wage continuation plan, or disability insurance policy in a weekly amount that is less than what they claim in weekly TTD or TPD benefits. For example, in a situation where the employee is claiming eligibility to $525.00 per week in TTD from January 1, 2015, and ongoing, and they are also receiving $300.00 per week in ongoing short-term disability benefits (and the employer paid 100% of the short-term disability insurance premiums), it seems clear that the solution is to reduce the ongoing TTD benefits by $300.00 per week. In this way, the employee continues to receive $525.00 per week between the weekly short-term disability benefits and TTD benefits, combined, and does not “double-dip”. Similarly, the employer/insurer is able to “recoup” the $300.00 per week paid through the employer-funded short-term disability plan.
However, what happens where an employee is receiving weekly payments pursuant to an employer-funded disability plan, wage continuation plan, or disability insurance policy in an amount that exceeds what they claim in weekly TTD or TPD benefits? In a situation where the employee earned a high average-weekly-wage, such as $1,200.00 per week, the amount they are eligible to receive in payments pursuant to an employer-funded disability plan, wage continuation plan, or disability insurance policy could greatly exceed the maximum they are eligible to receive in weekly TTD, which is currently $525.00, per O.C.G.A. § 34-9-261.
For example, in a scenario where the employee is claiming eligibility to $525.00 per week in TTD from January 1, 2015, and ongoing, but they are also receiving $825.00 per week in short-term disability benefits, how can the employer/insurer possibly recoup the full amount of credit due? Even if the employer/insurer stops paying TTD benefits altogether, the employee is still receiving a surplus of $300.00 per week in short-term disability benefits.
Seemingly, the only solution is for the parties to agree that the employer/insurer will discontinue TTD payments, and collect any surplus of credit owed from any PPD benefits that may be due. However, this may not actually be a viable solution; especially in a non-surgical claim where there is no guarantee that PPD benefits would provide a large enough source of cash for the employer/insurer to recoup the full amount of credit owed.
Although there is no case law on the topic, it does not seem likely that the board would authorize an arrangement where the employee pays the surplus owed to the employer/insurer out of his or her own pocket. After all, the Workers’ Compensation Act was designed to protect and cover employees against injuries on the job; thus it would seem that its primary responsibility is to ensure the protection of the employee, rather than the employer/insurer, when push comes to shove.
So, what can the employer/insurer do to protect themselves? First, it should be made clear that sometimes this surplus of credit owed cannot be avoided. In the example listed above, even if the employer/insurer refuses to commence TTD on January 1, 2015, the surplus of credit owed will still accumulate.
However, in other cases, a large credit may accumulate where the claimant’s payments pursuant to an employer-funded disability plan, wage continuation plan, or disability insurance policy go unnoticed while workers’ compensation benefits are simultaneously being paid. If this occurs and goes unnoticed for several months (or even up to two years) until the employer/insurer files Form WC-243 to take credit for the overpayment, there is no guarantee that the employer/insurer will ever be able to recoup the entire amount through a reduction of future benefits.
Thus, the easiest way to combat the accumulation of an insurmountable credit is to immediately investigate whether the claimant may be eligible to receive payments through an employer-funded disability plan, wage continuation plan, or disability insurance policy at the time a claim is filed.
It is important to confirm with the employer whether the claimant has filed for unemployment, signed up for any disability insurance plans, or the like, and follow-up with the employer every 30 or 60 days to ensure that there has been no status change. If the claimant is eligible for such benefits, it is important to determine what amount (if any) the employer is contributing towards the funding of any such payment source. For instance, even if the claimant is receiving short-term disability benefits, but the claimant paid 100% of the premiums for the disability insurance, then the employer/insurer may not take any credit for such payments.
In a case where it appears that the employer/insurer face a situation where they are owed a large amount of credit (that may not be possible to fully recoup) it may be a good idea to discuss the large credit with claimant’s counsel early on. A large amount of credit could be an obstacle to settlement down the road, but if all parties are aware of it up front hopefully any unrealistic expectations regarding settlement can be tempered.
In cases where settlement is not an option, a consent order outlining each parties’ rights and expectations with respect to such an overpayment (and any subsequent recoupment of credit) may be helpful in avoiding unnecessary litigation, and recouping as much of the credit as possible.
In sum, although O.C.G.A. § 34-9-243 provides a mechanism for the employer/insurer to recoup credit for any overpayment, there are situations which may result in an incomplete reimbursement. Keeping a proactive stance toward identifying any potential sources of overpayment and filing Form WC-243 early to put all parties on notice about any potential (or outstanding) credit can help minimize any surplus of credit owed, and perhaps even facilitate a favorable settlement agreement.