Any business owners with employees must have workers comp. insurance.
Workers comp. insurance premium is based on a few factors:
1. Employees’ duties and payroll
2. Claim history, which includes the frequency and the nature of claims, as well as how much was paid out.
3. Some additional underwriting data factoring safety features of the work space, locations, working hours (24-hour operation is considered as a high risk) and similar.
Let’s talk about #2 – claim history, in particular, how much was paid off in case of a claim.
First off, the funds paid out often include medical payments, lost wages, legal expense and recovery/rehabilitation. As the business owner, you have the right to receive reports about how much was already paid out or reserved for payments. And we advise you monitor this amount in a great details, otherwise, you can repeat a story of Home Depot, Inc. that cannot recoup excess payments made to an injured worker who received more workers compensation benefits than he was due, the Massachusetts Appeals Court ruled Thursday.
Mr. K. was a Home Depot employee when he slipped and injured his left knee while descending a ladder, court records show. He filed a workers comp claim, which Home Deport contested.
But in 2005, an administrative law judge ordered the self-insured employer to pay total disability benefits for a limited period followed by ongoing partial disability benefits.
On appeal, however, the judge issued a second order that retroactively reduced Mr. K.’s benefits, so that he had already received more in benefit payments than he was due.
Home Depot then filed an enforcement action against the claimant. It contended that the administrative law judge’s second ruling amounted to a recoupment order, and a superior court judge agreed.
But the Massachusetts Appeals Court found that Home Deport did not pursue a proper avenue for relief. Moreover, even if Home Depot had, its action was insufficient to determine whether a certain amount of recoupment would be proper, the court said.
Massachusetts case law requires judges in recoupment cases to determine “fundamental fairness” by balancing issues such as the claimant’s degree of culpability and ability to pay, the employer’s negligence, and the hardship the worker would suffer, the court said.
It denied Home Depot’s attempt and allowed Mr. K. to file for reasonable appellate attorney’s fees.
In the end, the amounts paid out for a claim are recorded in the loss history and may affect your workers compensation insurance premium.
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