Under the terms of the Grand Bargain between workers and management, workers’ compensation pays two-thirds of the victim’s average weekly wage for the duration of a temporary disability. A permanent disability, like the loss of a limb, usually means a lump sum payment which, again theoretically, is based on the AWW.
However, over the past twenty years, workers’ compensation cash benefits have declined 17 percent. Medical benefits have declined even more. Typically, instead of the AWW, insurance companies use boilerplate tables to determine lost wage replacement. X permanent disability means Y dollars, regardless of the facts of the case. Similarly, X temporary disability means Y time off work, once again regardless of the facts.
Kinds of Lost Wage Replacement
Despite insurance company reliance on actuarial tables, the two-thirds wage replacement rule applies in the following kinds of disability cases:
- Temporary Total Disability: Most fall and other trauma injury victims are TTD victims. They cannot work while they recover, and after their doctors clear them, they’re good to go. Most states allow job injury victims to choose their own doctors.
- Temporary Partial Disability: Some victims “graduate” from TTD to TPD. They can work, but they must accept lower-paying desk jobs or reduce their hours. So, workers’ compensation pays two-thirds of the difference between the victim’s old and new incomes.
- Permanent Partial Disability: Some PPD victims reach their MMI (maximum medical improvement) but they still aren’t 100 percent better. Other PPD victims, like the ones mentioned above, lose a limb in a work-related accident.
- Permanent Total Disability: These victims cannot work anymore, not only because of their medical conditions, but also because of their educational, vocational, and other background. Coal miners who lose legs may be completely disabled. College professors who lose legs can probably keep working.
These benefits are available if the injury was work-related. That doesn’t necessarily mean an on-the-clock injury. If Mike gets hurt at a seminar, workers’ compensation might apply to his injury.
The Workers’ Compensation Process
Lost wage benefits are available, but insurance companies don’t give them away like candy on Halloween. Instead, these claims must wind their way through the workers’ compensation process, or at least most of it.
An injury report begins this process. Most states impose strict deadlines on job injury victims. Typically, if a victim doesn’t file a claim in about ten days, the insurance company denies payment, no ifs, ands, or buts. Special rules apply in toxic exposure and other occupational disease claims.
A paper review, mostly based on the medical records, is next. Typically, regardless of the claim’s merit, a Claims Examiner almost always denies it.
Insurance adjusters have the advantage at the Claims Examiner phase. Job injury lawyers have the advantage at the next stage, which is a full hearing before an Administrative Law Judge. Because the environment changes, most insurance companies are motivated to make favorable deals. They’d rather pay most of the claim than go to trial and risk paying all of it.
Check out our workers’ comp calculator to see what your claim might be worth.