Topic:
BENEFITS (GENERAL); WORKERS' COMPENSATION;
Location:
WORKERS' COMPENSATION - BENEFITS;

OLR Research Report


January 24, 2000

 

2000-R-0047

VARIOUS WORKERS' COMPENSATION QUESTIONS

 

By: Laura Jordan, Associate Attorney

You asked the following workers' compensation-related questions.

What are the various types of workers' compensation benefits and how are benefits calculated?

Workers' compensation benefits fall into two categories: (1) payments for medical expenses and treatment of a work-related injury or disease, and (2) benefits that compensate an injured employee for lost earnings and for any permanent disability. The latter benefits are called wage-loss and indemnity benefits.

The level and duration of wage-loss and indemnity benefits varies depending on the degree of disability (total or partial) and whether the disability is temporary or permanent. Total disability benefits are paid as long as the total disability lasts. They are subject to a higher maximum.

Partial disability benefits vary according to which body part is affected and the degree of permanent disability. Benefits are paid for a set number of weeks depending on the specific body part that is disabled. The schedule of benefits is specified in the workers' compensation law. In certain cases, workers with partial disabilities whose earning power is reduced may receive a temporary benefit tied to the wage differential between their pre-and post-injury jobs.

A claimant's compensation rate is, in most cases, based on his average weekly wage (AWW) for the 52 weeks immediately before the injury or illness. In general, benefits are paid weekly and are subject to statutory maximums and minimums. Table 1 below summarizes the major benefits available under the workers' compensation system.

Table 1. Workers' Compensation Benefits

Type

Rate

Minimum/

Maximum

Duration

Medical:
payment for medical treatment for occupational injury or illness.

Covers any medical and surgical aid or hospital and nursing service, including medical rehabilitation services. Payment according to a medical fee schedule set by the Workers' Compensation Commission chairman or, if employer has an approved medical plan, the amount the treatment costs under the plan.

Not applicable.

As long as needed.

Temporary total disability:
wage replacement for employee who is out for more than 3 calendar days.

75% of net AWW (gross pay minus Social Security and state and federal income taxes) at time of injury; initial three days are paid if employee is out of work seven or more calendar days.

Minimum:
20% of the maximum benefit, but not more than 75% of net AWW.

Maximum: 100% of state average weekly wage (SAWW, currently $792).

Duration of total incapacity, unless adjudicated or agreed to.

Permanent total disability:
injury that results in total incapacity to work; law lists 6 injury categories that are conclusively presumed to cause total disability.

75% of net AWW at time of injury.

Minimum:
20% of the maximum benefit, but not more than 75% of net AWW.

Maximum: 100% of SAWW ($792).

Duration of total incapacity, unless adjudicated to agreed to.

       

Temporary partial disability:
worker returns to work at less than pre-injury wages.

75% of the difference between pre- and post-injury net pay.

Minimum: None.

Maximum: 100% of state average wage for production workers (SAPW, currently $637).

Until partial disability ends or maximum number of weeks specified in statute for particular body part is reached.

Permanent partial disability (PPD, or specific indemnity): compensation for permanent loss of body part or function as determined by physician; paid at point of maximum medical improvement.

75% of net AWW at time of injury.

Minimum: None.

Maximum: 100% of SAPW ($637).

Number of weeks of payment is determined by the statutory schedule.

Discretionary wage differential (308a benefits): after PPD benefits (above) have ended and at the discretion of a commissioner. Paid when a claimant earns less because of a partial disability.

75% of the difference between pre- and post-injury net pay.

Minimum: None.

Maximum: 100% of SAPW ($637).

Commissioners have discretion to award up to the duration of the worker's PPD benefits.

Disfigurement and scarring: compensation for permanent and significant scars from injury or related surgery on the head, face or neck, or on a part of the body that affects employability.

Number of weeks awarded.

Minimum: None.

Maximum: 100% of SAWW ($792).

One-time payment. Maximum of 208 weeks.

Death

Surviving spouse or other eligible dependent receives 75% of net AWW. If no spouse or dependent children exist, benefits for other dependent family members are determined in proportion to their actual dependency, up to 312 weeks.

Minimum:
20% of the maximum benefit, but not more than 75% of net AWW.

Maximum: 100% of SAWW ($792); burial benefits up to $4,000.

Paid to spouse for lifetime or until remarriage; if no surviving spouse, benefits to dependent children who are unmarried, full-time students continue until age 22; otherwise they terminate at age 18.

How many times has the workers' compensation rate changed in the past 10 years?

Twice. Prior to 1991 legislation, it was 662/3% of the worker's gross average weekly wage. For injuries and illnesses occurring from October 1, 1991, to June 30, 1993, the rate was 80% of after-tax earnings. Legislation in 1993 changed the rate to 75% of net pay for injuries occurring on or after July 1, 1993.

Do workers' compensation recipients pay taxes on the wage-loss benefits they receive?

No. The Internal Revenue Code excludes workers' compensation payments from the definition of income (26 USCA 104(a)(1)). Payments are not included in the state's definition of income (CGS 12-701).

Does state law require employers to continue an injured workers' health insurance coverage while he is unable to work due to an injury?

Prior to April 28, 1993, all Connecticut employers were required to continue paying certain fringe benefits regularly offered to the worker before the injury. So long as the worker was eligible to receive or was receiving workers' compensation payments, the employer was required to continuing contributing to accident, health, and life insurance coverage and welfare funds provided before the injury. A 1993 state Supreme Court decision eliminated this benefit for private-sector employees (Luis v. Frito-Lay, Inc., et al; Almeida v. Frito-Lay, Inc., et al. No. SC 14536). However, these benefits are still payable for state or municipal employees.

Specifically, the Court determined that the section requiring employers to continue health care coverage (CGS 31-284b) was preempted by the Employees Retirement and Income Security Act of 1974 (ERISA) pursuant to a U.S. Supreme Court decision (District of Columbia v. Greater Washington Board of Trade, 506 U.S. 125 (1992).

LJ:kgs