NEWS / Legal News - March 2019

The employee claimed a work injury which resulted in him being taken off of work. The self-insured employer initially denied liability and paid the employee short-term disability (“STD”) wage loss benefits under its self-funded STD plan. The employer later admitted liability and paid workers’ compensation wage loss benefits but deducted what the employee had already been paid in short-term disability benefits for the same time period.   

  

The employee filed a claim for wage loss benefits for the same time he received short-term disability benefits. The Compensation Judge denied the employee’s claim as double recovery. 
 

The WCCA reversed the Compensation Judge's decision and found that the employer could not offset what it owed by the amount of STD that had already been paid for the same time period.
 

The Supreme Court affirmed the WCCA holding that because the legislature had specifically implemented offset provisions for benefits like social security and public employee’s disability that the fact that there was no provision specifically dealing with employers’ self-funded disability plans meant that STD benefits could not be used to offset workers’ compensation wage loss benefits. A concurring opinion stated that if an STD plan has a specific provision requiring that it be paid back if workers’ compensation benefits are paid for the same time then the plan can intervene and pursue recovery.

  

In light of this decision it is imperative that any short-term disability plan have a “claw back” provision allowing it to recover STD benefits paid on a claim where workers’ compensation benefits are subsequently paid. 

This content is not legal advice and prior to taking any action based on the information contained herein, you should seek advice of legal counsel. Please feel free to contact our office with any questions.