August Update Pa Workers Compensation Benefits

Pennsylvania has a Workers’ Compensation law requiring employers to be responsible for injuries to employees on the job site for both medical treatment and lost wages.  Typically, the Workers’ Compensation carrier claims a lien interest in any third party case (case between the employee and someone who is not the employer) for the money it has paid to the date of settlement.  In addition, it also claims a credit or holiday from making payments, against future medical and wage loss benefits…. at least until now.

In Whitmoyer v. WCAB, Whitmoyer was injured at work and his Workers’ Compensation carrier paid for his medical expenses and wage loss.  The carrier paid Whitmoyer a lump sum payment for his wage loss. This ended his workers’ compensation wage loss benefits but the medical portion of his Workers’ Compensation claim remained open so he could continue to treat for injuries.  Later, Whitmoyer attained a $300,000.00 settlement from third parties (not his employer) who contributed to causing his injuries.  The Workers’ Compensation carrier requested an adjustment to the third party settlement agreement to reflect the medical expenses incurred after the parties entered the third party settlement agreement (aka future medical benefits credit) and the judge agreed. Whitmoyer contested this and appealed.

The Pennsylvania Supreme Court heard the appeal to determine whether the term “installments of compensation” in section 319 of the Workers’ Compensation Act included both wage loss benefits and payment of medical bills. Under the law, wage loss benefits were required to be paid “in periodical installments, as the wages of the employee were payable before the injury.” However, medical expenses are not.  The court held that when a workers’ compensation claimant recovers proceeds from a third party settlement, after payment of the Worker’s Compensation lien to date (past), under section 319 the employer/insurance carrier is limited to drawing down against that recovery only to the extent that future disability benefits are payable to the claimant (future credit).

Or in English – the Court held that no future credit can be taken against any medical bills or expenses, it can only be applied to future wage loss/disability benefits.