Many injured employees wonder if they can receive long term disability benefits while receiving workers compensation benefits for an on the job injury or occupational disease. As with most legal questions the answer is, “It depends.”
This article discusses the following: 1) what documents determine whether you can receive long term disability and workers comp temporary total disability benefits at the same time; 2) what liens the long term disability insurance carrier may have against your workers comp benefits; 3) when your employer can claim a credit for long term disability benefits paid because of a work injury; and 4) how to navigate issues that arise with long term disability offsets and workers compensation settlements.
As workers compensation lawyers and long term disability attorneys, our goal is to maximize the income that injured workers receive through all available sources. Keep reading to learn more. Then contact Corey Pollard today: 804-251-1620 or 757-810-5614. We help injured workers throughout Virginia, including those in Richmond, Newport News, Norfolk, Virginia Beach, Fredericksburg, Fairfax, Roanoke, Charlottesville, Staunton, Winchester, and Prince William County.
The long term disability insurance policy is the document that governs your long term disability benefits.
Those of you who are union members may have long term disability coverage through your employer.
For example many airline employees, such as pilots and flight attendants, and truck drivers, such as FedEx and UPS drivers, have long term disability insurance through their collective bargaining agreement (CBA). If you’re an injured union member whose CBA provides long term disability coverage, then you can draw long term disability benefits while receiving workers compensation.
Many unions have provisions like this. But you can’t count on your employer or its workers compensation insurance carrier to make you aware of it. Make sure your attorney is aware of your union status so that he or she can help you collect all applicable benefits.
If the insurance carrier denies your claim then you will have to prove your case at a workers compensation hearing before a deputy commissioner with the Workers Comp Commission. While you are waiting for a decision, which could take several months depending on whether there are any workers comp appeals, long term disability may pay benefits. The long term disability company may request that you pay back some of the money it paid to you if you win your hearing and are eventually awarded wage loss benefits.
Virginia Code Section 65.2-520 states:
Any payments made by the employer to the injured employee during the period of his disability, or to his dependents, which by the terms of this title were not due and payable when made, may, subject to the approval of the Commission, be deducted from the amount to be paid as compensation, provided that, in the case of disability, such deductions shall be made by reducing the amount of the weekly payment in an amount not to exceed one-fourth of the amount of the weekly payment for as long as is necessary for the employer to recover his voluntary payment. However, any payments made to an injured employee under the Longshore and Harbor Workers’ Compensation Act of 1927, as amended, 33 U.S.C. § 901 et seq., may be deducted in full from the amount to be paid as compensation for the same injury under this title.
But your employer and its insurance carrier are entitled to a credit for payments made under a long term disability plan only if the plan was “entirely paid by the employer and contains an exclusion for disability compensable under workers’ compensation.” Otherwise they are not entitled to a credit against your workers comp wage loss benefits for long term disability benefits you receive – even if the employer paid 90% of the premiums.
Many long term disability policies contain offset provisions. These provisions provide that when a long-term disability beneficiary receives income from other sources – either SSDI, SSI, workers’ comp, occupational disability insurance, or some other plan – then the monthly amount of those benefits will be offset against the monthly long term disability payments. In other words, the long term disability carrier will reduce the amount you receive by the amount of these other benefits.
An experienced attorney, however, may help you minimize the long term disability offset based on your workers comp claim.
Below are answers to some questions that arise when negotiating long term disability offsets with the insurance carrier:
Does the Long Term Disability Offset Apply if I Have to Repay the Workers Compensation Insurance Carrier Because of a Third Party Settlement?
Some of you may have long term disability, workmans comp, and personal injury claims arising out of a workplace accident if the accident is caused by a third party. This is common in car accidents that happen while the driver is performing a job duty.
When you settle your third-party personal injury claim you may have to repay the workers compensation insurance carrier for benefits it paid on your behalf. The workers comp carrier has a lien under the Virginia Workers Compensation Act.
Some attorneys have argued that if an injured employee has to pay back a large portion of the workers comp lien, then the long term disability offset is unfair. Case law, however, is unclear on the validity of this position.
For example, the court in Connors v. Connecticut General Life Ins. Co., 272 F.3d 127 (2d Cir. 2001) held that the “fact that [the long term disability beneficiary] ultimately repaid his workers’ compensation benefits does not change [the long term disability insurance carrier’s] rights under the Policy.”
Does the Long Term Disability Offset Include the Attorney’s Fee Paid as Part of the Workers Comp Settlement?
Usually courts will follow the language of the policy.
There are several cases that held the long term disability insurer may deduct the entire amount of the workers’ compensation settlement, including the portion of the settlement used to pay the attorney.
Can the Long Term Disability Carrier Take an Offset if I Receive Workers Compensation for an Injury or Occupational Disease that is Different From the Injury or Disability for Which I am Receiving Long Term Disability Benefits?
The answer to this question also depends on how the plan language is interpreted.
For example some policies state that an offset applies only if the workers compensation benefits were payable as a result of the same disability for which the policy pays a benefit. This situation happens more than you would think because the burden of proof and the evaluation of workers comp claims are different from those used in long term disability and Social Security Disability claims.
Can the Long Term Disability Carrier Take an Offset for the Portion of the Workers Comp Settlement that is for Permanent Partial Disability, Vocational Rehabilitation, or Lifetime Medical Benefits?
Usually the long term disability offset provisions do not apply to the amount of the workers comp settlement that relates to future medical expenses. This is because the medical portion of the settlement is not in exchange for income from other sources. Of course, the long term disability insurance carrier may disagree with the allocation for lifetime medical benefits used in the settlement.
Similarly the long term disability carrier may agree not to include amounts allocated toward vocational rehabilitation in the offset. You have a stronger argument in this regard if you have not returned to work at the time of settlement.
Settlement monies allocated toward permanent partial disability, however, are a different story. Some federal courts have found that the receipt of permanent partial disability benefits through settlement results in an offset against Social Security Disability Insurance benefits. If, however, you can show that the compensation is for loss of use of a body part and not on account of disability then the offset may not be appropriate. You can use this strategy with the long term disability carrier.
Coordinating long term disability, workers comp, and Social Security Disability benefits is difficult. But we can help.
If you’re having difficult receiving long term disability or work injury benefits, or want to make sure you structure your work comp settlement correctly, contact us today for a free consultation.