Workers Compensation - Washington

Tara Reck, Managing L&I Attorney at Reck Law PLLC - Workers' Compensation Attorneys

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L&I Pension – Permanent Total Disability

A catastrophic work injury or occupational disease can make work injury victims unemployable.  Here, unemployable means that the person is unable to “perform or obtain a gainful occupation with a reasonable degree of success and continuity”.  If medical treatment or vocational services cannot make the person employable, then the work injury claimant is permanently and totally disabled.  If you have an L&I claim or workers’ compensation claim, and you are permanently totally disabled, then you are entitled to “pension” benefits under your claim.

 

L&I pension payments

When the Department of Labor and Industries (L&I) places a work injury claimant on pension, then their L&I claim is closed. However, the injured worker receives pension benefits for the rest of their life, so long as they remain unemployable.  L&I pays out pension benefits monthly, around the 15th of each month.  The amount depends on the worker’s salary and wages at the time of injury.  Furthermore, if the worker is married, then he or she can choose for their spouse to get survivor benefits. Simply put, “survivor benefits” means that if the work injury claimant passes then their spouse will receive the pension benefits. Under certain circumstances, this choice may also impact the monthly L&I pension amount.

 

Permanent total disability

There are many factors to consider when determining whether a work injury claimant is permanently and totally disabled.  These factors include the following considerations, among others:

1) The worker’s work pattern at the time of injury – part-time employment, full time, seasonal worker, and so on.

2) Whether the work-accident, injury, or work-related illness cause the permanent physical or mental limitations.

3) Were there any preexisting permanent (physical or mental) limitations?

4) The person’s wage-earning capacity.

5) The local labor market.

6) The worker’s strengths and weaknesses.

7) The work injury claimant’s age, education, training, and experience.

 

Based on these factors, L&I may consider the workplace injury claimant as permanently and totally disabled.  Even if a person is not physically or mentally helpless, they can still fall under the qualifications. However, we have to remember that an injured worker doesn’t have permanent total disability just because they cannot return to their former job. In fact, if the worker can perform or obtain any gainful work with success and continuity, then they are employable.

 

Employability: Are you employable?

The Department of Labor and Industries places great value on employability, for a variety of reasons.  From my perspective, there are some issues with how L&I views and evaluates employability. In my opinion, saying that someone is employable on paper is not the same as how things manifest themselves in the real world. Furthermore, it’s not uncommon for employability determinations to be based on erroneous or insufficient medical or vocational evidence.

 

Getting help from L&I attorney

As I see it, most people with a workers’ compensation claim recover from their injuries or illness and return to work. However, there are many individuals with L&I claims that need assistance to return to work.  Comparatively, only a small number of workplace injury claimants have permanent and total disability. If you have an L&I claim or a workers’ compensation claim, and the claim administrator is saying you are employable when you are not, then you should immediately speak with a workers’ compensation attorney.

Fraud in L&I Claims and Workers’ Compensation Claims in Washington State

The Department of Labor and Industries (L&I) takes fraud very seriously.  Under the Industrial Insurance Act, the letter of the law refers to fraud as “willful misrepresentation”.  Under the law (WAC 296-14-4121) it says:

“[I]t is willful misrepresentation for a person to obtain payments or other benefits in an amount greater than that to which he or she would have otherwise been entitled. Willful misrepresentation includes making a willful false statement or the willful misrepresentation, omission, or concealment of any material fact.”

In fact, if L&I finds willful misrepresentation, they can demand repayment and assess a 50% penalty.  If the willful misrepresentation is egregious, it can lead to criminal charges.

 

L&I scam

Recently, there was a story about a who pleaded guilty to a first-degree theft felony, in Renton, Washington. The man used his wife’s name and social security number to obtain work.  He worked in multiple delivery jobs as a driver while collecting L&I time-loss and pension benefits. To receive pension benefits means he contended that he was incapable of working on a permanent basis. Moreover, in addition to the criminal sentence, he must repay $340K in benefits. Ultimately, this is one of the largest L&I scams in history. This story received a lot of media coverage.

 

Receiving time-loss or pension benefits under a workers’ compensation claim

A work injury claimant may not be able to work while recovering from an industrial injury or occupational disease. Therefore, to support injured workers during their recovery, they should get time-loss compensation. Here, to be paid, the time-loss compensation must be “certified”.  Under a state-funded L&I claim, basic time-loss certification requires:

(1) Chart notes and forms from the attending provider, or the treating or consulting provider;

(2) An accompanying Activity Prescription Form (APF) from the examining provider; and

(3) A Work Status Form (WSF) completed by the workplace injury claimant.

 

Generally, L&I makes every injured worker complete a WSF approximately every 30 days.  If the work injury claimant fails to complete a WSF, then L&I might stop time-loss payments.  The WSF is the best tool that L&I employs to prove willful misrepresentation. Explicitly, the WSF specifically asks the work injury claimant if they are working.  It is not ambiguous. In fact, the bottom of the form must be signed by the injured worker, as shown in the image below. Signing serves as confirmation that the form contains truthful information.

L&I work status form

 

L&I claim fraud while on pension

If you receive pension payments because of your workplace injury, you must complete and file a form once a year. The name of this annual form is Declaration of Entitlement.  Remember, when completing this form, it must also be notarized. The form clearly asks whether the work injury claimant worked since submitting their last declaration. If the form is not complete within 30 days of its due date, L&I may suspend pension payment.

 

Final remarks

To summarize, dishonest people can hide work activity while collecting time-loss compensation or pension payments. Consequently, they are causing real and measurable damage to the workers’ compensation system. This behavior is unspeakable and is not tolerated. As L&I said in a recent announcement, this kind of willful misrepresentation is not a victimless crime.

 

Fraud in workers’ compensation claims and L&I claims hurts honest people trying to get better after a work injury. Recall, employees (and employers) pay L&I insurance premiums out of their pocket. They (and other stakeholders) are obvious victims. And, with that in mind, it’s important that victims of workplace accidents must be honest about their work status. That way, the system can continue to help those who really need help and assistance.

L&I Cost of Living Adjustment (COLA) and the Washington State Accident Fund

The Department of Labor and Industries (L&I) recently announced the 2020-2021 benefits schedule.  Every year, around July, L&I determines if a Cost of Living Adjustment (COLA) applies to workers’ compensation benefits. Sometimes COLAs are not applied.  However, this year, there are adjustments to monetary benefits.

 

Cost of living adjustment under an L&I claim

In short, L&I benefits are going to increase by a little over 6% this year.  This is a historically high increase.  Last year, the cost of living change of 5.5% was also historically high.  COLAs are based on the average annual wage of all workers in Washington State. In order for the increase to be over 6%, average annual wages of employees must also increase in a similar amount.  For work injury claimants, this news could not come at a better time.  If you would like to review more information about the COLA this year, please refer to the 2020-2021 Benefits Schedule.

 

However, we must also think ahead considering our current reality.  Businesses, workers and employees have been severely impacted by the COVID-19 pandemic.  Consequently, unemployment rates are very high.  And, many businesses have been forced to close.  Some of those closures are temporary. However, many are permanent.  This is especially true in certain industries such as hospitality and retail. Both are industries that previously employed many workers. The Corona virus is going to negatively impact our economy for quite some time.

 

What is the L&I accident fund?

The Department of Labor and Industries administers the Accident Fund. Say that you had a workplace injury. Moreover, say that you are receiving payments and financial benefits under your workers’ compensation claim. Then, it’s important to know that the money is coming from the Accident Fund.

 

Previously, economic downturns had negative impact on the financial health of the Accident Fund. Specifically, during economic waves in the early and mid-2000s, Washington State businesses experienced L&I rate increases. In other words, employers had to pay higher worker’s injury insurance rates towards the fund. In 2003, the rate increase was an astonishing 28.8%.

 

Starting in 2007, we saw four straight years of L&I rate increases.  Unfortunately, these rate increases were necessary.  Businesses received significant rate rebates that left the Accident Fund nearly empty. In fact, there were $200MM in workers compensation rebates for employers in 1999 and 2000, and $315MM in rebates in 2007.  It isn’t a coincidence that L&I rates had to increase after those employer rebates.

 

L&I workplace injury insurance rates in Washington State

The employer rebates depleted the Accident Fund.  Therefore, L&I implemented an increase to the work injury insurance rate to repair it. Business and labor stakeholders on the Worker’s Compensation Advisory Committee (WCAC) decided to do something about it. Explicitly, the WCAC established targets to ensure that the reserves in the Washington State Accident Fund will be sufficient to withstand the next recession. Thanks to COVID-19, that next recession is already knocking on our door.

 

Currently, the Accident Fund is healthy enough to sustain the upcoming recession. Interestingly, recent forecasts estimate that the Washington State government faces $8.8B revenue shortfall through 2023.  That kind of shortfall is going to require cuts. Because the Accident fund is healthy, the workers’ compensation system is going to be an easy target for tax cuts. Therefore, now more than ever, it’s important to focus and monitor the financial health of the Accident Fund.

 

The viewpoint of a workers’ compensation attorney

Our (currently) healthy workers’ compensation ecosystem provides a critical safety net for working families.  That safety net prevents financial ruin when catastrophe strikes.  For that reason, we must actively resist the kinds of Accident Fund depletion that we saw in 1999, 2000, and 2007.

 

As a society, we cannot afford to empty this workers’ compensation insurance fund and hope to save it with rate-increases later. For more information about this issue, please read this recent article. It was written by The Stand, which is a publication for workers in Washington State.

 

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