Court Awards Insurer Credit for Wages Paid in Lieu of Benefits
- Louisiana’s First District Court of Appeal held on Aug. 6 that a workers’ compensation insurer was due a dollar-for-dollar credit for the overpayment of wages an employer policyholder had paid in lieu of benefits to a worker injured on the job.
- The worker sustained second and third degree burns on his hands and legs in a workplace accident while in the course and scope of his employment. Ory was “off duty” following his accident, and during that time, his employer, HKA Enterprises paid him a total of $46,654.40 in wages in lieu of compensation over 19 weeks.
- He later sought supplemental benefits from the workers’ compensation from Indemnity Insurance Company of North America, which refused, refused to pay based on its assertion that it was entitled to a dollar-for-dollar credit for the wages HKA paid in lieu of workers’ compensation, resulting in an alleged overpayment to Ory in the amount of $46,186.40
- The court held that the amount of indemnity the defendants would have paid to Ory over the course of the 19 weeks he was “off duty” ($14,117.00) must be subtracted from the total credit the insurer received ($46,654.40) to determine the total overpayment, which equals $32,537.40
Business Watchdog Warns Workers’ Comp Law Could Undo Reform Gains
- Illinois House Bill 5228, which took effect immediately after Gov. J.B. Pritzker signed it on Aug. 7 has come under fire over two provisions in the law: a new surcharge on profitable workers’ comp insurers and new restrictions on employer liability challenges.
- Phil Melin, executive director of Illinois Citizens Against Lawsuit Abuse, said the surcharge would total $7 million and increase 3.5% annually, with more profitable insurers paying a larger share, arguing this “profit penalty” could discourage companies from doing business in Illinois.
- Melin pointed to Illinois’ 2011 workers’ comp reform under then-Gov. Pat Quinn as having made the state more competitive, and expressed concern that HB 5228 could reverse those gains.
- Melin also said the law creates more procedural hurdles for employers seeking to challenge questionable treatment determinations, while the Illinois AFL-CIO and the Illinois Trial Lawyers Association filed witness slips in support of the bill.