TN 76 (08-23)

DI 52120.210 Pennsylvania Workers' Compensation (WC)

The Pennsylvania Department of Labor and Industry is responsible for the administration of their workers’ compensation law. Worker's compensation insurance may be provided through a competitive state fund (the State Workers' Insurance Fund, SWIF), a private insurance carrier, or employers may self-insure.

A. Periodic WC payments

Pennsylvania’s WC law is found in their Statutes, Articles III and IV. Section 306 covers indemnity payments and Section 306.1 covers Subsequent Injury Fund Payments. Under the Pennsylvania WC Act, work-related injuries are separated into three statutory classifications depending on the type of injury: total disabilities are governed by section 306(a); partial disabilities are governed by section 306(b); and disabilities resulting from permanent injuries, including permanent disfigurement and the loss of a body part, are governed by section 306(c).

All periodic payments are subject to the state minimum and maximum amounts. The minimum compensation rate is the LOWER of 90 percent of the individual’s average weekly wage or 50 percent of the state average weekly wage.

1. Total Disability (TT or PT)

Payments are made while the worker is temporarily unable to perform any work and are based on 2/3 of the injured individual’s average weekly wage. They are paid for the duration of disability. Although it is theoretically possible to receive wage-loss benefits for life, this is not common. For injuries after 06/24/1996, once 104 weeks of total disability benefits have been paid, the individual may have to submit to a medical examination to determine the extent of their permanent impairment.

  • If their impairment rating is 50 percent or greater the individual continues to receive total disability benefits and will be considered totally disabled. The individual must be profoundly disabled in order to receive an impairment rating of greater than 50 percent.

  • If the impairment rating is less than 50 percent, the individual is deemed to be only partially disabled. At that point WC payments are limited to no more than an additional 500 weeks.

2. Partial Disability/Nonscheduled award (TP)

This is paid when the injured worker cannot return to regular work and is given a light duty job at a lower wage, or is found not totally disabled. It is generally paid at 2/3 of the difference between the worker’s wages before and after their injury. The maximum period that can be awarded is 500 weeks. If, while on partial disability status, the worker receives a determination of impairment which is equal to or greater than 50 percent, they may file a petition for reinstatement of total disability status.

3. Scheduled award for a specific loss (PP)

The Pennsylvania Workers' Compensation Act contains a schedule of ‘specific losses’ that lists the benefits paid for a permanent loss or loss of use of certain limbs or functions of the body. The law fixes a specific number of weeks for each specific loss. The individual is entitled to receive these benefits for the period allotted regardless of whether or not they are out of work. Injured employees are compensated for scheduled losses based on 2/3 of their pre-injury wage, multiplied by the number of weeks established for the loss in question. Scheduled awards are paid in addition to TT at the end of TT and are not reduced for TT previously paid.

  • Disfigurement benefits are paid for serious and permanent disfigurement of head, face, or neck. This type of Scheduled Award has a maximum period of 275 weeks.

  • Healing period benefits are also mandated by the schedule. These are additional weeks of WC paid until either the injured individual returns to work without an impaired earnings capacity, or the scheduled amount has been paid, whichever comes first. These WC benefits may be reduced for wages received during the healing period, and the amount of WC payable is sometimes recalculated every 2 weeks.

B. Lump sum WC payments

1. Commuted awards (Sections 316 and 412):

Pennsylvania law allows future periodic payments to be commuted by the WC Board. When the period to be commuted is 52 weeks or less, no discount is allowed. When more than 52 weeks are being commuted the lump sum is usually calculated at a discounted rate. For information on prorating Commuted Awards, see DI 52150.065B.

2. Compromise and Release (C&R) lump sums Section 449):

The WC Act permits employers and injured workers to settle claims for WC benefits, including medical expense benefits. Life expectancy lump sum settlements are prevalent in Pennsylvania. For information on life expectancy lump sum settlements, see DI 52150.065.

A Compromise and Release Agreement, form LIBC-755, is required and must be approved before the agreement is legally binding. The form itself is detailed and generally provides all the information needed to impose offset, but sometimes the effective date of the award is not specified. This is problematic when periodic payments were made but their end date is not shown in the award. However, C&R agreements are signed on the day of the hearing, right before being submitted to the judge for approval and the date the C&R was signed is the last date periodic payments were due. If the body of the C&R does not specify an effective date, use the day after the day it was signed as the lump sum proration effective date.

CAUTION: Disregard any subsequent addendums regarding how to prorate the award. If an addendum was made at the same time as the award, it will generally be referred to in the award. If there is no reference to the addendum in the award, the employer/carrier can be contacted to verify whether the addendum was part of the original settlement. For more information on Subsequent Addenda to LS Settlements, see DI 52150.065.

C. Salary continuation for public employees

For some state employees injured at work, Pennsylvania law provides for salary continuation: the injured individual is paid their full salary and their WC is paid to the state. THESE TYPES OF WC ARE NOT OFFSETTABLE IF WC WAS PAID TO THE STATE during salary continuation. We must verify that the WC is paid to the state if these types of benefits are alleged. For more information on WC payments made to employers see DI 52110.010.

1. Heart and Lung Act benefits

This Act applies to all public law enforcement officers and investigators, firemen, park guards, etc. who were injured in the performance of their duties. These benefits are available for any temporary incapacity which results from a work injury. Individuals permanently incapacitated from returning to their pre-injury duties are ineligible for Heart and Lung Act benefits.

2. Act 534 / 61 P.S. Section 951 benefits

These benefits apply to certain employees of State penal and correctional institutions, mental hospitals, and others who are injured at work. The injured individual is entitled to receive their salary until they are able to return to work for his employer at a salary equal to that earned at the time of the injury.

D. Pennsylvania supersedeas cases [Sec. 443 (a)]

Before WC benefits can be reduced, suspended, or terminated, the employer/carrier must file a petition with a WC judge. The petition is treated as a supersedeas to suspend the WC previously awarded. The WC payments must ordinarily continue until the judge approves the petition. If the employer/carrier’s request is approved, the judge's order usually indicates that benefits be modified or stopped at some point in the past.

The Pennsylvania WC Act contains no provisions requiring an individual to repay any of the benefits received for periods after the date specified in the order, and the WC carrier cannot adjust ongoing WC payments to recover the excess WC paid. The carrier/employer is instead reimbursed from the state’s Supersedeas Fund. So, even though the Appeal Board may decide that less WC should have been paid for a retroactive period (either a lower rate or fewer weeks of WC), SSA considers the individual as still due the greater amount actually paid. In these cases the suspension/termination date shown in the judge's order is NOT the controlling factor in removing offset. We impose offset for the WC payments actually made in these cases. Therefore it will always be necessary to contact the carrier to determine the amounts paid or the last day for which WC payments were made rather than relying on a date shown in a judge's order. Follow these instructions in processing all Pennsylvania cases involving a judicial petition to suspend or terminate WC benefits.

NOTE: This situation is specific to Pennsylvania. Do not apply this procedure to other states.

E. Cost-of-living Adjustments (COLA)

Pennsylvania does not give COLAs on its WC.

F. Attorney fees

Although the individual may represent himself in WC proceedings, other layperson representation is not allowed. Any attorney fee agreement must be approved by a WC judge or the Workers’ Compensation Appeal Board, and approved fees become liens against awards. Fees are limited by statute to 20 percent of any past due or ongoing wage loss benefits.

G. Reduced WC

1. Pension, unemployment compensation, or severance pay reduces the WC rate

a. Reduction in WC wage-loss benefits due to “offset credit” by the employer or insurance carrier

The Pennsylvania WC Act, and Rules and Regulations Title 34, Part VIII, Chapter 123 allows a reduction (also referred to as an “offset credit”) taken by the employer/insurance carrier of the worker’s WC wage-loss benefit if the worker also receives any of the following:

  • Unemployment compensation (UC)

  • Severance pay

  • Pension benefits funded in whole or in part by the employer liable for the WC (including amounts withdrawn or otherwise utilized from pension benefits rolled over into an IRA or other similarly restricted account while the employee is receiving WC benefits).

NOTE: A reduction due to severance pay or pension benefits applies only to claims for injuries suffered on or after 06/24/1996. A reduction due to unemployment compensation benefits applies to all claims regardless of the date of injury.

See DI 52120.210G.2. in this section for reduction in WC due to retirement insurance benefits (RIB).

The reduced WC rate is the actual WC amount the worker is entitled to receive under the applicable provisions of the law. Therefore, if the WC rate is reduced because of a pension, unemployment compensation, or severance pay, impose offset using the reduced WC rate. Note that the reduced WC rate may be further reduced to recover an overpayment. For offset calculations, use the WC rate after the pension/unemployment compensation/severance pay reduction but before any reduction to recover an overpayment (see instructions and NOTE in DI 52120.210G.2.b. in this section). For WC overpayment situations and examples, see DI 52150.035A.4.

b. Pennsylvania form LIBC-761 Notice of Workers’ Compensation Benefit Offset

The employer/insurance carrier files form LIBC-761 Notice of Workers’ Compensation Benefit Offset notifying the worker of the reduction. (To view this form, see link in DI 52120.210K Exhibits in this section.) The form includes the following information:

  • Type of benefit causing the WC wage-loss rate reduction

  • WC wage-loss benefit rate prior to the reduction, and the frequency of payment

  • Amount of the reduction (i.e., the “offset credit” amount) and the beginning date of the credit

  • Amount of the WC wage-loss payable after the reduction

  • A specific ending date for the WC wage-loss rate reduction, or a statement that the ending date for the reduction cannot be established (e.g., if the pension payment continues indefinitely).

  • A space for the employer or insurer to provide an explanation of the reduction calculation (i.e., the “offset credit” calculation).

NOTE: Carefully review Form LIBC-761, Notice of Workers’ Compensation Benefit Offset. Employers and insurers are not consistent in their completion of the form. For example, the “offset credit” amount can correctly represent the reduction in WC wage-loss benefits due to the aforementioned Pennsylvania WC Act, Rules and Regulations, or it can incorrectly represent the amount being withheld to recover an overpayment due to retroactive benefit offset, or a combination of both factors. Also, the “beginning date” and “ending date” entries can correctly represent the period for which the “offset credit” provisions apply, or can incorrectly represent the period during which an overpayment is being recovered, or a combination of both periods. If Form LIBC-761 does not clearly explain the amount of the reduced WC rate payable, the effective date, or the ending date (if applicable), further development is needed. The employer or insurer should be contacted for verification of this information.

2. Retirement insurance benefit (RIB) reduces the WC rate

Pennsylvania reduces its WC payments for 50 percent of RIB received, if the WC injury occurred 06/24/1996 or later, and if the entitlement to RIB did not begin prior to the date of the injury. Advise claimants to contact the Pennsylvania Bureau of Workers Compensation to determine how this offset provision would impact their WC payments if they elect RIB. The offset is described in Pennsylvania Regulations Chapter 123.7. We do not curtail development of a RIB election at age 62 for Pennsylvania WC cases.

H. Time limitations for filing claims

1. Initial claims

Unless the individual gives notice to the employer within 21 days of the injury (or the employer had knowledge of the injury), no WC is payable before the date notice is given. For any compensation to be allowed, notice must be given within 120 days of the injury.

2. Protests to denied or terminated claims

If the request for WC benefits was denied or WC benefits were paid but then stopped, the individual has 3 years from the date of injury to file a claim petition or petition to reinstate WC benefits.

3. Occupational disease cases

The injury/disability must occur within 300 weeks from the date of last employment in an occupation in which the individual had exposure to a hazard, and a petition must be filed no later than 3 years from the date of injury/disability.

If WC benefits were terminated, a petition to reinstate WC benefits must be filed within 3 years after the date of the most recent WC check.

I. Verifying WC

1. Carrier

Our best source of information is usually the WC carrier. Carrier contact information can be obtained from the state. See the state link for contact information for Pennsylvania carriers under ‘REFERENCES’ in this section.

2. State

The Bureau of WC can be contacted for help in identifying the carrier.

a. Address:

Pennsylvania Bureau of WC

1171 South Cameron Street, Room 109

Harrisburg, Pennsylvania 17104-2501

J. WC forms

Pennsylvania WC forms are generally easy to interpret. CAUTION: some forms (like the Compromise and Release form) have valuable information on both sides, and both sides must be faxed to us for our records.

K. Exhibits

Pennsylvania WC forms, including:

  • Notice of Compensation Payable, LIBC-495,

  • Notice of Temporary Compensation Payable, LIBC-501

  • Notice of Suspension or Modification, LIBC-751,

  • Compromise and Release Agreement, LIBC-755,

  • Notice of Workers’ Compensation Benefit Offset, LIBC-761:

http://www.portal.state.pa.us/portal/server.pt/community/forms/10421

 

L. References

  • Pennsylvania Labor and Industry Bureau of Workers’ Compensation //www.dli.pa.gov/Individuals/Workers-Compensation/Pages/default.aspx

  • Link for Carrier Contact information (scroll down to the ‘line of business’ chart and select ‘Workers’ Compensation’) //www.insurance.state.pa.us/dsf/gfsearch.html

  • Precedents Information re Disfigurement payments and Pennsylvania Supersedeas cases PR 02505.042

  • Pennsylvania WC Act, Rules and Regulations (for WC reduction due to receipt of pension, unemployment or severance pay see Chapter 123.3-.4 and 123.8-.9; for RIB offset see Chapter 123.7) //www.dli.pa.gov/Individuals/Workers-Compensation/publications/Pages/WC%20Act/PA-Workers-Comp-Rules--Regs-Chapter-123.aspx

  • State Workers’ Insurance Fund (SWIF): //www.dli.pa.gov/Businesses/swif/Pages/default.aspx


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0452120210
DI 52120.210 - Pennsylvania Workers' Compensation (WC) - 08/04/2023
Batch run: 08/04/2023
Rev:08/04/2023