O.C.G.A. §34-9-221(b) and Board Rule 221(b) requires that indemnity benefits be commenced on the twenty-first day after an employer has knowledge or notice of disability caused by a compensable injury.
O.C.G.A. §34-9-221(b) and Board Rule 221(b) requires that indemnity benefits be commenced on the twenty-first day after an employer has knowledge or notice of disability caused by a compensable injury. Because of these strict time constraints, often times benefits are commenced based on an erroneous average weekly wage because the insurer may not have enough time to obtain actual wage records from the employer before twenty-one days elapse. The recent decision in Renu Thrift Store, Inc. et. al. v. Figueroa now makes it clear the importance of obtaining such information on a timely basis. Furthermore, Renu Thrift Store shows the ramifications of an employer/insurer’s unilateral suspension of benefits and its failure to pay indemnity benefits on a weekly basis, rather than bi-weekly or in some other fashion, without a prior Order from the Board.
In Renu Thrift Store, the employer/insurer began paying temporary total disability (TTD) benefits to the claimant based on an average weekly wage that was materially more than the claimant’s actual average weekly wage. In fact, the employer/insurer paid TTD benefits based on the incorrect average weekly wage for almost five (5) years, from September 2000 to March 2005. Furthermore, for approximately fourteen (14) months, from November 2003 to January 2005, the claimant received double the amount of TTD benefits. On January 26, 2005, after discovering the error, the employer/insurer filed a WC-2 stating that the claimant had been overpaid $9,280.49 in income benefits, which would be credited toward future permanent partial disability (PPD) benefits. On February 11, 2005, the employer/insurer filed an additional WC-2 stating that benefits would be suspended effective February 21, 2005. It is unclear from the facts of the case reported in the decision, but it does not appear as though the February 11, 2005 WC-2 was filed following a regular duty release to return to work.
Needless to say, on April 19, 2005, the claimant filed a motion requesting recommencement of benefits. The employer/insurer timely objected, and in its response, ultimately requested reimbursement in the amount of $23,754.00. A hearing followed, after which the ALJ denied the claimant’s request for recommencement of benefits, denied the claimant’s request for attorney’s fees based on the employer/insurer’s unilateral suspension, but granted the employer/insurer’s request for a credit. However, the ALJ limited the credit to payments made within two (2) years before the employer/insurer’s request for reimbursement pursuant to O.C.G.A. § 34-9-245, and the ALJ performed its own calculation of the correct TTD rate, which resulted in an award of a credit in the amount of $2,981.39.
On appeal, the Full Board affirmed the ALJ’s ruling with respect to the credit awarded to the employer/insurer, but assessed a fifteen percent (15%) penalty against the employer/insurer for making the erroneous payments on a bi-weekly basis, as opposed to a weekly basis, and assessed a $2,000.00 attorney fee against the employer/insurer for its unilateral suspension of benefits. The employer/insurer appealed to the superior court, who affirmed the Board’s ruling, which led to the employer/insurer’s appeal to the Court of Appeals. In addition to affirming the Full Board’s award of late payment penalties for the employer/insurer making TTD payments on a bi-weekly basis, and affirming the award of assessed attorney’s fees, the Court of Appeals also affirmed the Full Board’s ruling that the employer/insurer was barred from obtaining credit for overpayments made more than two years before its application for reimbursement.
With respect to the holding regarding the credit for overpayment of TTD benefits based on the incorrect average weekly wage, the employer/insurer argued that the two-year bar outlined in O.C.G.A. § 34-9-245 did not apply, but, instead, its right to reimbursement was governed by O.C.G.A. § 34-9-243(a), which, among other things, provides for a credit for benefits paid when they are not due. Typically, O.C.G.A. § 34-9-243 is used by employer/insurer’s to obtain a credit for unemployment benefits, short-term benefits, and long-term benefits paid during a time in which TTD benefits were owed. However, in this case, the employer/insurer reasoned that the amounts paid in excess of the correct TTD rate were, in fact, “benefits paid when not due.”
In rejecting this argument, the Court of Appeals relied on Trax-Fax, Inc. v. Hobba, which held that O.C.G.A. § 34-9-245, as a statute of repose, “destroys the previously existing rights so that, on expiration of the statutory period, the cause of action [for reimbursement] no longer exists.” Indeed, a “statute of repose” defines the time period in which a right may accrue. If the injury, or in this case the request for a credit, occurs outside that period, it is not actionable. The Court reasoned that since the purpose of O.C.G.A. § 34-9-245 was to provide claimant’s with the certainty of knowing when past benefit payments are no longer subject to reimbursement claims, allowing an employer/insurer to reduce future benefit payments, when those benefits are due and undisputed, based on overpayments made outside the [two-year] statutory period would result in an outcome inconsistent with the purpose of O.C.G.A. § 34-9-245 and would frustrate the purpose behind the statute.
The Court of Appeals also affirmed the Board’s assessment of a fifteen percent (15%) penalty against the employer/insurer for making bi-weekly, as opposed to weekly, payment of TTD benefits payments on a weekly basis. In doing so, the Court held that O.C.G.A. § 34-9-221(b) requires that income benefits be paid in weekly installments.” Absent an alternative schedule approved by the Board, failure to comply with this provision can result in assessment of a fifteen percent (15%) penalty. The Court suggests that had the employer/insurer provided a satisfactory explanation (possibly by showing that the parties agreed to bi-weekly payments) or petitioned the Board for an order approving bi-weekly payments, the assessment of late payment penalties would not have been proper.
Finally, the Court affirmed the Board’s assessment of a $2,000.00 attorney fee for the employer/insurer’s unilateral suspension of benefits. Simply put, the Court agreed with the Board’s finding that the employer/insurer’s unilateral suspension of benefits without a Board order was unreasonable because the overpayments were entirely the employer/insurer’s fault.
Renu Thrift Store does not necessarily shed any new light on the issues of the two-year statute of limitations contained in O.C.G.A. § 34-9-245, the potential for late payment penalties, or the assessment of attorney’s fees. However, the case does confirm the Board’s strict adherence to following the requirements set forth in the Code with regard to payment of benefits. First, it is clear that the Board is not inclined to deviate from requiring payment of benefits on a weekly basis, even when, as here, the bi-weekly payments actually resulted in the claimant receiving benefits one week early. Second, there are only certain circumstance under which unilateral suspension of benefits is appropriate and deviating from the acceptable circumstances can lead to the assessment of attorney’s fees. Finally, it is imperative that claims be monitored regularly to ensure that payments are being made timely and in the proper amount because an employer and its insurer can only recoup overpayments made within two (2) years after its request for reimbursement. Indeed, failure to closely monitor compensable claims can prove to be very costly.