Getting Workers’ Comp and Social Security Disability–Is it Really “Double-Dipping?”

double dippingAn injured worker’s receipt of Social Security Disability (SSD) benefits can produce an offset from workers’ compensation (WC) payments.  A workers’ compensation recipient who is also collecting SSD cannot receive, in combined benefits, more than 80% of his average current earnings (ACE).  Wisconsin is one of nine “Reverse Offset” states whereby any offsets are taken on WC benefits rather than Social Security benefits.  Under Wisconsin statutes, for each dollar that the total monthly workers’ compensation benefits (excluding attorney fees and costs) plus the monthly benefits payable under the Social Security Act for disability exceed 80% of the employee’s ACE as determined by Social Security, the workers’ compensation benefits shall be reduced by the same amount, so that the total benefits payable do not exceed 80% of the employee’s ACE.

In most states, under Social Security law, a recipient’s SSD benefits are reduced when the total of the recipient’s disability payments plus workers’ compensation (WC) benefits exceed 80% of the ACE.  The reduction is taken against the recipient’s monthly SSD, not WC. In Wisconsin, however, just the reverse is true and the workers’ compensation insurance carrier’s liability is reduced.

In Wisconsin, the maximum age for ending the Social Security offset has been 65 since the offset went into effect in 1980.  However, since Congress amended the Social Security Act in 2013 by the incredibly-titled “Achieving a Better Life Experience (ABLE) Act,” the amendment extends the workers’ compensation Social Security offset to the full retirement age (essentially age 66 for those born between 1943 and 1954, and age 67 for those born after 1960).  The revised law provides that the offset continues until an employee attains full retirement age.  The way this works out practically, for example, for a worker with a $600 monthly Average Weekly Wage ($400 in Temporary Total Disability), or about $30,000 in average current earnings (ACE), 80% ACE would be $24,000 per year or $2,000 per month.  If SSD pays $900 per month, WC would be limited to the 80% ACE figure ($2,000) so the WC carrier liability would be limited to $1,100 instead of its $1,720 ($400 TTD rate x 4.3) monthly liability absent the SSD.

The purposes of the two systems—SSD and WC—differ substantially. WC applies the principle that, irrespective of fault, projected costs of injuries can be secured in advance through insurance. Eligibility for SSD benefits requires an employee to build equity in the program through earning income credits.  The employer has paid a premium for the worker’s injury not based on any offset, and the employee has paid into Social Security for the entirety of his work life.  The rationale for the “offset” is loosely based on a “double dipping” assessment, much the same as the “Moral Hazard” rationale for not providing a full pay check to workers who are injured (in order to reduce the incentive to remain off work).

Wisconsin experimented historically with the percentage of Permanent Partial Disability payable for Temporary Total Disability (from 70% to the current 66.66%), based on the notion that the worker should be no better off disabled than if he were working, the 33% diminution assessed as an amount relatively close to his taxation rate.  This rationale does not, of course, hold for those workers who exceed the maximum (currently $1,380) wage rate.  The “Moral Hazard” rationale for reduction of benefits is based on the theory that an injured worker should not be “better off”  because of his injury.  In over 40 years’ representing injured workers, I’ve yet to see a worker actually better off because of his work injury.

The Dangers of Working with Vibrating Tools

Today’s post comes from guest author Anthony L. Lucas, from The Jernigan Law Firm.

Vibration White Finger (VWF) or “Dead Finger,” now known as Hand-Arm Vibration Syndrome (HAVS), is a chronic, progressive disorder caused by regular and prolonged use of vibrating hand tools that can progress to loss of effective hand function and necrosis of the fingers. In its advanced stages, the obvious symptom is finger blanching (losing color). Other symptoms include numbness, pain, and tingling in the fingers, as well as a weakened grip.

It is estimated that as many as 50 percent of the estimated 2 million U.S. workers exposed to hand-arm vibration will develop HAVS. Some common industries and the tools associated with HAVS are listed below:

  • Agriculture & Forestry – Chainsaws
  • Automotive – Impact Wrenches, Riveting Guns
  • Construction – Jackhammers
  • Foundries – Chippers, Grinders
  • Metal Working – Buffers, Sanders
  • Mining – Jack-Leg Drills, Stoper Drills

The time between a worker’s first exposure to hand-arm vibration to the development of HAVS symptoms can range from a few months to several years. Prevention is critical because while the early stages of HAVS are usually reversible if vibration exposure is reduced or eliminated, treatment is usually ineffective after the fingers blanch. 

Are Wisconsin Workers’ Compensation Benefits Taxable?

Can the IRS get my Work Comp Settlement?

Q: Do I Pay Taxes on My Work Comp Benefits?

A: NO!

This is a question I hear all the time.  When we are negotiating a lump sum resolution of a disputed workers’ compensation claim in Wisconsin, the injured worker rightfully is concerned about the tax implications when receiving a large dollar settlement.  It comes as quite a relief when I indicate that workers’ compensation benefits are not taxable.

Specifically, workers’ compensation benefits are exempt from taxation under the Internal Revenue Code.  See 26 U.S.C. Section 104(a)(1).  The IRS even issued a publication indicating that workers’ compensation benefits are not included in an individual’s taxable income.

While an injured worker faces numerous financial difficulties and hurdles when recovering from a work accident, the non-taxability of workers’ compensation benefits is a slight silver lining.   Additionally, these tax implications can help encourage pursuit of a lump sum settlement of a disputed claim.

Oklahoma Commission Says Workers’ Comp “Opt Out” Not OK

Today’s post comes from guest author Kristina Brown Thompson, from The Jernigan Law Firm.

Ever since Oklahoma employers were allowed to “opt out” of the workers’ compensation system in 2013, nearly 60 big employers have chosen the “opt out” path. By opting out, these large corporations (like Wal-Mart and Big Lots) are no longer constrained by the requirements of the Oklahoma State workers’ compensation laws. Instead they are allowed to create their own internal workers’ compensation system playing under their rules and definitions.

According to a NPR study these opt out plans “ . . . provide fewer benefits, make it easier for employers to deny benefits, give employers control over medical assessment and treatment, and leave appeals in the hands of employers, and force workers to accept lump-sum settlements.”

However, just last week, the Oklahoma Workers’ Compensation Commission unanimously declared two sections of the “Oklahoma Employee Injury Benefit Act” (a/k/a Oklahoma’s Opt Out law) unconstitutional. According to the Commission, the Opt Out provisions deprived injured workers of equal protection and access to the court. The Oklahoma Workers’ Compensation Commission called the opt out plans “a water mirage on the highway that disappears upon closer inspection.”

Here is a link to the Oklahoma Workers’ Compensation opinion filed 26 February 2016. The ruling will likely be appealed and we can expect to hear much more about these Oklahoma opt-out plans in the near future.




Job Stress Linked To: Weight Gain, Hypertension & Hormone Imbalance

Today’s post comes from guest author Rod Rehm, from Rehm, Bennett & Moore.

The Centers for Disease Control and Prevention’s NIOSH Research Rounds – Volume 1, Issue 10, April 2016, is the link where the article featured in today’s blog post came from, via Jon Gelman’s Twitter feed. Mr. Gelman, of Jon L. Gelman, L.L.C., is a respected advocate for injured workers in New Jersey, and I thank him for sharing this resource.

When you think about your job, what are the words that come to mind? How do you describe your job and how it makes you feel?

The notion of stress means many different things in different contexts. Sustaining a work-related injury and navigating through a state’s workers’ compensation system is one kind of stress that our employees help clients with every day. As you can see below, another kind of stress has to do with job fit, and that “can lead to poor health and even injury.”

“Job stress refers to the harmful physical and emotional responses that occur when the requirements of the job do not match the capabilities, resources, or needs of the worker,” according to the article. “One form of stress under investigation at the National Institute for Occupational Safety and Health (NIOSH) is job strain, which occurs when high job demands combine with low job control.”

There are good links to different research abstracts that were featured in this article, so I’d encourage people to consider each one.

When it comes to job stress and job strain, I hope that employers consider how they can make such occupations as truck driving and nursing less challenging for workers. In addition, I hope that workers can, within the limits of their job descriptions and work schedules, digest the information and think about how to reduce job stress and job strain to both prevent injury and increase overall health.

Have a safe, productive week. Please contact an experienced workers’ compensation lawyer for specific questions, whether you or a loved one has been injured at work, regardless of how the injury occurred.


Gig Economy and Work Comp: Are Uber Drivers Covered?

If an Uber driver gets in an accident while working (or is beaten up by a passenger), are they entitled to worker’s compensation benefits?   

Take a look at this interesting article: Gig Economy Workers Injured on the Job Should Get Workers’ Comp Protections.  The author indicates that most Uber drivers are labeled as independent contractors, which (if a legitimate labeling) would preclude a claim for worker’s compensation.  Worker’s compensation policy allows the costs of a work injury to effectively be an employer’s cost of doing business.  Without worker’s compensation, the significant expenses of a work injury are borne by the worker directly, along with the medical provider and potentially the taxpayers (through Medicaid, Medicare, or Social Security Disability).

Disputes arise in many states, including Wisconsin, regarding whether an individual is an employee versus and independent contractor.  Wisconsin law requires a specific nine-part test to be deemed an “independent contractor” (these include whether the individual maintained their own office and equipment; had a federal ID number; receives compensation on a per job or bid basis; incurs the main expenses related to the service; and others).   This can be a difficult standard to meet, and the failure to meet the standard renders the individual an employee–with rights under the worker’s compensation law.  These include compensation for lost time benefits, permanent disability benefits, and medical treatment expenses.

At the current time, I’m unaware of any recent decisions addressing the issue of an Uber driver’s claim for worker’s compensation benefits….but it may come in short order on our state.  


Implant May Help Opioid Addicted Injured Workers

The Food and Drug Administration has approved an implant that may help those addicted to opioids. The new medication called Probuphine is inserted in four rods in the addicted. Experts indicate that the implants, which administer a constant low-level dose of medication, would stop opioid cravings for injured workers.  The implants are projected to last at least six months.

Given the scourge of opioid addiction following many serious worker’s compensation injuries, the FDA’s approval of the implants is welcome news for injured workers.

Comparing Outcomes for Injured Workers in Wisconsin

In an interstate study by WRCI, Wisconsin workers reported higher rates of return to work, lower rates of problems accessing medical providers, and higher rates of satisfaction with medical care.

The Workers’ Compensation Research Institute (WCRI) has studied interstate comparisons of key outcomes achieved by injured workers in Wisconsin and fourteen other states, part of a multi-year effort by WCRI to collect and examine data on the outcomes of medical care achieved by injured workers.

Wisconsin workers reported higher rates of return to work, lower rates of problems accessing medical providers, and higher rates of satisfaction with medical care. (Note: Wisconsin still maintains employee choice of doctors for post-injury care, despite some legislative efforts proposed for an employer-directed care, i.e., an employer panel of doctors.)

The study found the average rate of physical health and functioning was similar across all fifteen states. Wisconsin workers reported higher rates of return to work than workers in the other states. Ten percent of Wisconsin workers with more than a week off never returned to work within a year compared to fourteen percent and seventeen percent in most of the other states. On average Wisconsin workers had returned to work about ten weeks after the injury, which was in the middle range of the study states.

Six percent of injured workers reported earning “a lot less” at the time of their return to work compared with the time of injury, similar to the average in the other states studied.

Access to medical care. Wisconsin workers were less likely to report problems obtaining their medical services. Only 11% of injured workers in Wisconsin reported they had significant problems obtaining the services they needed, which was among the lowest in the study states (lower or somewhat lower than all the other states in the report). Additionally, almost 85% of Wisconsin workers said they were satisfied with their overall workers’ compensation medical care (with only 10% saying they were very dissatisfied). This dissatisfaction rate was the lowest of the study states.

WCRI compared the medical costs and outcomes in Wisconsin, trying to analyze tradeoffs between worker outcomes and medical costs. They expected to find that when medical costs for an injury were higher compared with other states, workers in the higher cost state should experience better outcomes for that injury. When WCRI compared the outcomes reported by injured workers and costs of medical care, it found Wisconsin medical costs per claim were among the highest of the study states, yet workers reported higher rates of substantial return to work, fewer problems obtaining desired services and providers, and higher satisfaction with overall medical care.

Compared with Wisconsin, injured workers in other states found similar rates of problems obtaining medical services but longer duration of time before return to work. The analysis did not aim to identify specific system features in workers’ compensation that impact outcomes, only highlighting how worker outcomes varied across the states. It did not examine whether differences in workers’ compensation policies explain different outcomes. Future WCRI studies may answer how worker outcomes differ across different system features – such as employer choice of physician, fee schedules, etc. (The other states in the study were Arkansas, Connecticut, Florida, Georgia, Indiana, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, North Carolina, Pennsylvania, Tennessee, and Virginia.)