DI 52120.115 Maryland Workers' Compensation (WC)
The Maryland Workers Compensation Commission does not make benefit payments to injured workers. The Commission's role is to process and adjudicate claims. Once claims determinations have been made, the insurance carriers and self-insured employers make WC payments as required by the Commission's awards and orders.
A. Types of WC payments
Maryland WC law is found in Title 9: Worker's Compensation. Subtitle 6 (Benefits) covers periodic indemnity payments. All periodic payments are subject to the state maximum and minimum amounts. Be careful to distinguish payments of accumulated periodic WC from true lump sums.
1. Temporary Total (TT) (9-618 thru 622)
This WC is paid during the period of time frequently referred to as the "healing period". If an injury has resulted in a disability that prevents the individual from returning to work for a period of time (that is, he is completely disabled for all work purposes), then TT WC is paid. TT is based on 2/3 of the average weekly wage of the injured individual, with a minimum of $50.00 per week. TT is terminated when the individual can return to work in some capacity or has reached maximum medical improvement.
2. Temporary Partial (TP) (9-614, 9-615)
This WC is paid when the injured individual can only perform limited or part-time duties at a reduced income level. That is, when their wage earning capacity is lower. The employer or its insurer pays TP WC at 50 percent of the difference between the individual's pre-injury and post-injury average weekly wage. The maximum amount is 50 percent of the TT/PT maximum.
3. Permanent Total (PT) (9-635 thru 9-640)
PT is paid at 2/3 of the individual's pre-injury average weekly wage. It is paid for the duration of the disability and may continue indefinitely. ONLY PT WC IS INCREASED BY COLAs.
4. Permanent Partial (PP) (9-625 thru 9-633)
a. PP scheduled awards (for loss or loss of the use of a specific body part)
PP scheduled awards are paid in addition to TT WC starting with the termination of the TT WC. They are not reduced for prior TT benefits. Weekly PP is awarded for a specified period of time (as established by a statutory ‘schedule' of injuries) and is based on 2/3 of the individual's pre-injury average weekly wage. The minimum PP is $50 per week (or the actual pre-injury wage, if less). The number of weeks of PP awarded as established by law varies according to the body part injured and the severity of the injury. There are 3 types of scheduled awards:
Serious cases: Paid for 250 or more weeks (for the duration of disability). The PP maximum for serious cases is 3/4 of the regular TT/PT maximum.
Non-serious cases: Paid for 75 to 249 weeks. The PP maximum for non-serious cases is 1/3 of the regular TT/PT maximum.
Minor non-serious cases: Paid for up to 74 weeks. The maximum for these cases is $114 per week. Awards of less than a year are often issued as a lump sum.
b. PP disfigurement awards
WC may also be paid for mutilations, and for other disfigurements not specifically covered in the schedule of injuries. The amount of WC paid is at the discretion of the WC commission.
5. Vocational Rehabilitation Payments (9-674)
In addition to their TT, Maryland pays up to $40 per week in “maintenance costs” to individuals in bona fide vocational rehabilitation programs. The maximum period is 24 months. These additional payments are NOT OFFSETTABLE. For more information on vocational rehabilitation payments see DI 52110.005.
6. Subsequent Injury Fund (SIF) Payments (9-655 to 9-657 & 9-801 to 9-808)
The “Subsequent Injury Fund” replaced the prior “Second Injury Fund.” SIF pays WC when a pre-existing health condition substantially increases the disability of the injured individual. The employer/carrier's liability is limited to compensation for the damages caused by the current injury, and SIF incurs all additional liability. The WC Commission decides if SIF is liable for payment of a WC Claim, and the amount and duration of benefits to be paid by them. Payments from SIF normally begin AFTER the completion of the benefit payments paid by the employer/insurer. Following notification of the last day covered by the insurer's payments, SIF begins disbursing its payments. Typically the first check will be for an odd amount to catch up any lapse in payments between the employer/insurer and SIF; then regular biweekly payments are made. Generally, the WC benefits paid by SIF are
permanent partial (limited to a certain number of weeks), or
permanent total (payments usually for life), or
settlement agreements (which can have several varieties).
7. Lump Sum Commutations (9-729)
These are referred to as Lump Sums (LS). If the WC Commission finds that a lump sum payment is warranted based on the circumstances of a claim, it may order that the PP or PT WC payable be converted to a partial or total lump sum. An award may not be reduced just because it's paid as a lump sum. The parties agree on a dollar sum to be paid immediately and the future ‘life' of the claim. As a result, the claim can be closed out completely or partially. For a partial commutation of a PT award, the Commission:
reduces the weekly WC rate until the amount of the lump sum is recovered, and specifies in their award the dollar amount and number of weeks to be paid at the reduced weekly rate; and
if payments are made from SIF, the dollar amount and the number of weeks to be paid by SIF at the reduced weekly rate.
Note that in cases of partial commutation, the offset would be based on the reduced WC rate AND the concurrent lump sum proration.
8. Lump Sum Settlements (9-722)
These are referred to as Compromise Orders (CO). The injured individual may enter into an agreement for the final compromise and settlement of any current or future WC claim with the employer, carrier, or SIF. When approved by the Commission, a final compromise and settlement agreement is binding on all of the parties to the agreement. Unless the Commission orders otherwise, the compromise and settlement agreement precludes the right to claim SIF payments on the claim.
B. Cost-of-living Adjustments (COLA)
The Maryland annual COLA provision became effective 01/01/1988. COLAs only apply to WC paid for injuries or occupational diseases on or after that date.
Who gets COLAs?
Only workers receiving PT benefits are entitled to cost of living increases.
What are the rules for COLAs?
COLAs are reduced for individuals who are also entitled to SSA DIB benefits to the extent necessary to avoid a reduction of the SSA benefits.
Do we offset for COLAs?
YES. THE AMOUNT WE USE FOR OFFSET CORRECTLY INCLUDES ANY WC COLAs.
When are COLAs due?
COLAs are effective January 1 of each year if the worker is entitled to them.
How much are they?
See DI 52120.115H for a chart of Maryland's COLA increases.
C. Attorney fees
If a claimant appoints a lawyer, the WC Commission will establish the attorney's fees. Fees are generally limited to $7500.00.
Usually the fee is deducted from the award and paid separately to the attorney by the employer/carrier. In periodic WC awards, the fee amount is then recovered from the WC awarded by reducing the amount of the regular WC payments, or by withholding the last weeks of the WC due.
For example, the individual was awarded WC at $115.00 a week for 150 weeks ($17,250.00) starting 04/26/2001. The attorney fee was $3,087.50 and was withheld from the final weeks of the award. Therefore, periodic payments were awarded through 03/10/2004, but actual payment ended with 09/03/2003. The periodic payments 09/04/2003 – 03/10/2004 that were withheld to recover the attorney fee would be coded with a 100 percent expense deduction, making the WC rate used for offset $0.00 for that period.
When subsequent awards or compromise settlements are made, sometimes an earlier WC award is ended before the prior award has expired and the attorney fee recovered. Carriers rarely collect the attorney fee balance. For this reason, we must rely on the carriers to advise us of the amount of WC actually withheld from the injured individual to pay his attorney's fee, as this excludable amount may be less than the amount paid to the attorney.
Note that when a lump sum follows a periodic WC where the last weeks of the award were withheld for the attorney's fee and the earlier award was NOT superseded, the lump sum proration start date is based on when the periodic WC was last DUE, not when it was last paid. In the example above, if a lump sum was awarded and no allocation period was specified in the award, the proration start date would be 03/11/2004.
D. Retirement insurance benefit (RIB) considerations
Maryland does not offset WC for receipt of RIB.
E. Time limitations for filing claims
Injury: If the injured individual fails to file a claim within 2 years after the date of injury, the claim is completely barred.
Occupational Disease: If he is disabled as a result of an occupational disease, he must file a claim within 2 years (in the case of pulmonary dust disease within 3 years), counting from either the date of disablement or when he first had knowledge that the disability was caused by his employment.
F. Verifying WC
1. State Information
Maryland now maintains a website that allows the general public access to WC claims and payment related information without the necessity of signing in to view the database. You need the individual's name, and SSN or Maryland WC claim number. Maryland's WC claim number is always a letter followed by 6 numbers (for example, B123456). See ‘References' below for a link to a user's guide with instructions for accessing MD WC information online and help in interpreting the screens.
Data provided by the website includes carrier and attorney information and some LIMITED information about WC awards that were made. Accurate payment information is usually only available from the carrier and will have to be requested from them. The information online is an overview of the WC awarded and cannot be relied on to impose offset. It is often incomplete and sometimes inaccurate as to rates and attorney fees paid. Also, note that the award dates shown are NOT the date the WC was effective but rather when the award was approved. However, the website database does show the WC awards that were made, and so should be checked before developing to the carrier.
NOTE: The MD Workers' Compensation Commission implemented its database in the early 1980's. WC claims filed prior to this implementation may not be accessible online.
2. Injured Workers' Insurance Fund (IWIF)
Formerly the Maryland State Accident Fund, this was the nation's first workers' compensation insurance organization. It became an independent state agency in 1988 and received its current name in 1990. IWIF now operates as a not-for-profit insurer and is the carrier for one in every four Maryland business owners across the state. Although some WC information may be provided to us over the phone, for a written or faxed reply we must provide them with the injured worker's signed consent.
NOTE: Per IWIF website, call the Customer Service Center at (410) 494-2000 or toll-free at 1-800-264-IWIF (4943) to obtain the name and telephone/fax numbers for the claims adjuster working your case. Have the claim number or social security number and date of injury available when calling IWIF. Then you can directly fax SSA requests to them. This expedient will assist SSA technicians to quickly obtain needed information. Using the general fax number below may result in delays.
Contact information: Injured Workers' Insurance Fund
8722 Loch Raven Boulevard
Towson, Maryland 21286-2235
(800) 264-IWIF (4943), (410) 494-2000; General Fax: (410) 494-2201
Below are exhibits of Maryland WC forms containing payment information.