Insurer Gets Credit for Wages Paid in Lieu of Benefits

wages

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

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.