DI 52120.270 West Virginia Workers' Compensation (WC)
WV used to have a state exclusive WC system, with no private carriers, but now the state is only responsible for monitoring employer/carriers to ensure they follow proper procedure and legal requirements.
WV WC cases are often extremely complicated. Therefore, it is imperative that we maintain detailed, accurate information regarding how the WC used for offset was calculated.
A. Changes in West Virginia WC
2004: In the past, all WC in WV was always paid through the state. Then, effective 07/01/2004 self-insured companies had to begin administering their own WC claims. Some of them administer the WC claims process themselves and some use a third-party administrator (TPA) such as an insurance company.
2005: In 2005, West Virginia signed into law a bill which privatized the state’s WC system. As part of this bill, the Workers’ Compensation Commission was transformed into a private mutual insurance company effective 01/01/2006. WC benefit levels are still determined by the state and the state can still review claims decisions. However, the new mutual insurance company (Brick Street Mutual Insurance) took over the rest of the state’s WC functions for claims involving injuries 07/01/2005 or later.
Certain ‘Old Funds’ cases are still funded by the state, but they have third party administrators. These include claims paid from one of their ‘special funds’ such as the uninsured employer fund and the Coal Workers’ Pneumoconiosis Fund (CWPF).
2008: Brick Street was the state’s only private carrier for regular WC claims through 06/2008. Effective 07/2008 other private insurance carriers are also allowed.
B. WC payments
West Virginia’s WC law is found in their State Code, Chapter 23; Article 4 covers indemnity payments. Multiple types of WC for the same claim are paid sequentially not concurrently, but multiple overlapping claims are allowed unless permanent total (PT) has been awarded. ALMOST ALL WV WC IS PAID AS PERIODIC BENEFITS; LUMP SUMS ARE RARE.
1. Minimum and Maximum Amounts
All periodic payments are subject to the state minimum and maximum amounts.
Minimum WC Rates: WV has 2 sets of minimum WC benefit rates, one based on the state average weekly wage (SAWW) and one based on the federal minimum wage. The state decides which applies. Effective 07/01/1994 the minimum WC rate cannot exceed the federal minimum wage.
Maximum WC Rates: WV has 2 sets of maximum WC benefit rates, one for partial disability and one for total disability.
2. Types of Periodic WC
WV does not provide a statute in their WC law for disfigurement benefits.
These are the different types of regular periodic WC payments in descending order of priority:
a. Permanent Total (PT)
PT payments are based on 2/3 of the individual’s average weekly wage. PT WC supersedes all other WC due for the same period and almost always continues until age 65 or later. A different type of WC previously paid for the same period of time (even if paid under a different claim number) will be adjusted from the PT awarded. Although current ongoing PT payments are made monthly, past due PT payments are made based on the exact number of days times the WC daily rate. Large retroactive PT awards are not uncommon in WV, and are sometimes mistaken for lump sum payments.
b. Permanent Partial (PP)
Past due PP payments are made based on the exact daily rate; current ongoing PP payments are made monthly. The individual is paid 4 weeks PP WC for each percent of disability established, so that 40 weeks PP WC would be awarded for a 10 percent disability. In the rare case that an individual was released by his physician to return to work at the job he held before the injury occurred but his employer doesn't offer him the pre-injury job (or a comparable job) when such a position is available, PP is paid at 6 weeks per percent of disability.
Before 06/2005, PP awards generally began the day after the TT was last due, and any non-awarded (NP) payments made were withheld from the first PP payments made. Under WV’s ‘Rule 1’ which was effective 06/01/2005, PP awards are not made effective before their application date. This has increased the number of gap situations we encounter. Also, adjustments to recover NP are no longer made at the beginning of the PP award, but at the end instead. We must be careful not to stop offset when PP WC payments end if additional WC was due but withheld to recover NP payments.
c. Temporary Total (TT)
The TT rate is the same as the PT rate. TT is now limited to 104 weeks, but before 07/01/2003 could be paid for 208 weeks. Although in very old cases TT was paid twice a month, payments have been made biweekly since the mid-1970s. If TT has stopped because maximum medical improvement (MMI) has been reached, the injured worker can file a protest with the Office of Judges and submit evidence to show he is not at MMI, or ask to be examined for a PP award. The claimant may receive non-awarded partial benefits until that request is decided.
d. Temporary Partial (TP)
Normally TT is paid during a period of rehabilitation. However, when the individual returns to work as part of a rehabilitation plan but his earnings are less than his average pre-injury earnings, he can receive TP WC. TP is based on 70 percent of the difference between the average weekly earnings before and after the injury. Very few of our cases involve temporary partial WC.
e. Non-awarded Payments (NAP or NP)
These payments are made biweekly. NP payments are presumptive prepayments of additional WC to be awarded. They are made while a final decision is pending on a claim for more WC.
When NP is superseded by PP, PT, or more TT payments, it is withheld from the additional awarded WC. In this case, our offset is based on the WC that superseded the NP, not on the NP.
When no additional WC is awarded, the individual is permitted to keep the NP paid. In this case, offset is based on the NP payments.
f. Disabled Worker's Relief Fund (DWRF) Supplements
Another type of periodic WC paid by WV is the DWRF payment. The WV Disabled Worker's Relief Fund supplements WC claimants receiving PT benefits that are less than the state minimum in effect on 07/01/1973. DWRF payments are rare, since they only apply to WC claims with a date of injury/illness prior to 07/01/1971. DWRF payments are offsettable.
3. Overlapping periodic WC
Same WC claim
Sometimes PT will be awarded on a claim for the same period of time that PP and/or TT was paid, or PP will be awarded for the same period that TT was paid. In this situation, the new award will be adjusted for the payments previously made, and offset is based on the WC due under the award of higher priority. In the past, NP payments were recovered from the first months of subsequently awarded PP, but since 06/2005 NP has been recovered from the end of the new award. Be careful not to remove offset when WC payments have stopped just because previously paid NP is being recovered.
However, sometimes after PP had been granted, due to continued litigation additional TT was awarded and the new period of TT WC extended into a period of PP previously paid. This did not invalidate the prior PP award. The time period for which PP was awarded was just changed to begin at the end of the extended TT period (although computer records were rarely corrected to show the new time period). This situation has become less common because PP awards effective dates are no longer set as the day after prior TT ended.
Simultaneous workers’ compensation claims can be paid (under two or more different WC claim numbers) for different injuries. For instance, the individual could be collecting TT for an injury to his arm and then be awarded additional WC for a back injury for the same period. In this case, the WC used for offset is the total of the WC being paid on both claims. However, sometimes a WC award that overlaps other award claims may offset them (or partially offset them). For this reason, any adjustments to awards should be carefully examined, and not just assumed to pertain to only that specific claim number.
Concurrent Federal Black Lung and State Occupational Pneumoconiosis (OP) WC
Remember that Federal Black Lung (BL) benefits (DOL Part C) are a form of workers’ compensation. The worker may be offset for WV WC, Federal BL, or both. Generally Federal BL is offset for State Occupational Pneumoconiosis. In a case where offset was imposed based on Federal BL and then a retroactive state Occupational Pneumoconiosis award is received, the Federal BL award will probably be reversed or adjusted. Develop through the Department of Labor to ascertain the new amount of Federal BL to be used for offset. For more information on Federal BL, see DI 52115.001. Note that this adjustment only occurs for receipt of State Occupational Pneumoconiosis and not for state WC being paid for any other reason. In the later case, the individual would receive full Federal BL and State WC.
4. Calculating the amount of WC for offset
Our normal rules for converting WV rates from one period to another cannot be used with PP or PT WC, as WV does not convert daily WC rates to monthly rates in the same manner we do.
Daily rates: WV carries its daily rate calculations to 4 and sometimes 5 decimal places. They round the biweekly and monthly rates to the nearest penny.
TT and NP payments are made biweekly. To obtain the monthly amount of WC, multiply the biweekly payment by 13/6. To obtain the daily rate, divide by 14 as usual.
Past due PP and PT payments are made based on the exact daily rate. For example, 03/01/2008 through 04/30/2008 would be 61 days multiplied by the daily rate. If a past due payment is calculated for a period of time covering a leap year, the extra day will be added in (i.e. $29.32 per day from 01/04/1996 through 03/31/1996 was paid at $2580.16 for 88 days, not 87).
Current ongoing PP and PT payments are made monthly. Although award documents and pay stubs often don’t state the monthly amount of the award, they usually give the daily rate from which the monthly rate can be derived. To calculate the monthly amount of WC from the daily rate, do NOT multiply by 7 and then by 13/3. WV multiplies the daily rate by 365 (even in a leap year) and divides by 12.
In the example below there is a $5.00 per month difference between the two methods:
Midmonth adjustments: Because the relationship between WV’s daily and monthly rates differs from the standard used by SSA and WC/PDB ICF, caution must be taken in using WC/PDB ICF when partial periods of monthly WC are involved. WC/PDB ICF CANNOT DO THESE MIDMONTH ADJUSTMENTS CORRECTLY. Whenever a monthly WC rate is not paid for the entire month, you must manually calculate the amount due for the full month and use that amount as a monthly rate in WC/PDB ICF. So, if WC were due at $87.90714 per day beginning 03/15/2008, we would code ICF as follows: $1494.42 per month due 03/01/2008-03/31/2008 ($87.90714 per day times 17 days, including Saturdays and Sundays) and $2673.84 per month 04/01/2008 on.
5. Lump sum payments
Although WV does now pay lump sums, they are rare. Carefully examine any allegation of a lump sum payment. What looks like a lump sum (and what lawyers and claimants will sometimes call a lump sum) is usually an accumulation of past due periodic WC.
Commutations of future WC PP payments are allowed. One or more lump sum payments may be made as a prepayment of the balance of the commuted PP award. We prorate these lump sums using the effective dates and payment amounts of the original award. If excludable expenses are involved, method A, B, or C proration may be used. For more information on lump sum proration, see DI 52150.060.
Settlement agreements that are paid as lump sums are also true lump sums, and we may use method A, B, or C proration of the excludable expenses when calculating the amount of WC for offset purposes.
6. Settlement Agreements (SA)
When a WV WC award is made, both the employer and injured worker have 30 days to file a protest. If a protest is made, sometimes to avoid litigation, a compromised ‘settlement agreement’ is made for a lesser dollar amount or period of disability. Settlement agreements can be for TT, PP, or PT awards, and are decided differently for each individual case. These compromise agreements can be paid periodically or as lump sums. If a settlement agreement was made, always request to see the agreement, as exact details of it are needed to determine the WC for offset purposes.
C. Cost-of-Living Adjustments (COLA)
West Virginia does not give COLAs on its WC. It used to give escalations on the state minimum and maximum rates every July 1st, but due to a change in the state law no escalations were given 07/01/2003 or later. WC awards effective on or after 07/01/2003 are not subject to annual adjustments, but are ‘frozen’ at their initial payment rate, and awards prior to 07/01/2003 are now frozen at their 06/30/2003 payment rate.
In the past, WV would calculate the WC rate due based on the individual’s earnings (referred to as his ‘odd rate’) and compare it to the state minimum and maximum amounts. Then,
If the odd rate was lower than the state minimum, the state minimum would be paid, and it would be escalated every July 1st until 2003.
If the odd rate was between the state minimum and maximum amounts, it would be paid with no increases. If at some point the escalating minimum exceeded the odd rate, the minimum would be paid (with escalations) beginning that July.
If the odd rate was greater than the state maximum the state maximum would be paid until it increased to an amount greater than the odd rate. At that point the odd rate would be paid, and the WC rate would not be increased again.
D. Attorney fees
WV’s law limits attorney fees to ‘20 percent of the benefits to be paid during a period of 208 weeks’ for each award. Although this is the maximum fee amount allowed under WV law, not every attorney will charge the maximum. Do not make assumptions about the fee amount charged; it must be verified. WV attorneys generally provide detailed information regarding their fee calculations, and are also an excellent source of information regarding other excludable expenses.
The actual method used to calculate the fee charged varies from attorney to attorney.
Some base their fee on 48 months or 4 years instead of 208 weeks (WV allows this).
Some base their fee on 20 percent of the gross WC awarded and some on the net (after deducting a prior amount of WC paid for the same period of time). Both are allowable. Note that if the fee was 20 percent of a PP award and 20 percent of the gross PT award that superseded it, the total fee would exceed 20 percent for some months. The total fee would be coded in WC/PDB ICF as a dollar amount, not a percentage.
If PP was awarded on a claim for 200 weeks and then a second award was made for another 60 weeks (even if on the same claim) the attorney could charge a fee equal to 20% of both awards, as neither exceeded 208 weeks.
Some attorneys calculate their fee on the highest WC rate paid, even though the rate changed over the 208 week period the fee was deducted from (this is also allowed). Be careful to use the dollar amount of the attorney fee in these cases, as the fee was not always 20 percent of the WC rate paid.
Excluding the fee:
If the attorney fee was calculated using 20 percent of the payments for a specific period of time, then use the 20 percent fee as an excludable expense for that period.
On PT awards the attorney will usually take 20 percent of the first retroactive payment (which covers 12 to 15 months), 20 percent of the next few subsequent regular monthly payments (usually 2 or 3 months), and then 20 percent of the second retroactive payment (that pays the balance of the retroactive WC due and is issued after the 2 or 3 month period). If the period covered by those payments is not at least 208 weeks, attorney fee withholding should extend into future monthly payments. However, sometimes the full balance of the attorney fee is, with the worker’s consent, withheld from the second retroactive payment. We cannot attribute a 208 week fee to a smaller time period or extend an attorney fee deduction period into future months when the full fee has already been recovered. If a 208 week fee was withheld from less than 208 weeks of WC, we must deduct the attorney fee from the WC effective with the first month for which offset is imposed, along with any other excludable expenses.
E. Retirement insurance benefit (RIB) considerations
WV does not reduce their WC payments for RIB.
F. Time limitations for filing claims
1. Initial Claims
All injury claims must be filed within six months from the date of injury, or the claim may be barred. Claims for WC based on an occupational disease must be filed within 3 years.
2. Claims Reopened for PT WC
Claims for PT must generally be filed within 5 years of the date of prior closure of the claim.
G. Verifying WC
The disabled individual should always be the first source of verification. The WC applicant whose claim is processed through a self-insured company or third-party administrator must give written permission for us to obtain information.
1. Self-insured employers
Contact must be made with the applicable self-insured company or third-party administrator (TPA) to verify WC payments if the individual does not have proof. However, the state maintains a list of those employers by company name with their TPA and contact information. See the ‘Self-Insured Employers’ link under ‘EXHIBITS’ below.
WV has an index of the state WC claims that have been filed. The system that maintains this data is referred to as I-Comp and is accessed by using the individual’s SSN. Only certain technicians in WV offices, ODO and MATPSC have access to this system. Although I-Comp does not contain any payment information, it does show ALL the WV WC claims for the individual, including claims where the employer was self-insured and claims where the DOI is 07/01/2005 or later. The following information is available on I-Comp:
Accident date/Date of injury or last exposure;
Claimant’s full name;
Claimant’s social security number;
Name, address and phone number of a contact person for the private carrier,
Self-insured employer or third-party administrator, as applicable; and
Body part that is the subject of the claim.
H. Claim numbers and computer records
WV’s WC records are kept by claim number. For injuries before 2000 the first part of the claim number is the 2 digit year of injury followed by 2 zeros and a 5 digit number (example: 910012345); old records may show a dash instead of zeros (example: 75-12345). For injuries 2000 or later the first part of the claim number is the 4 digit year of injury followed by 1 zero and a 5 digit number (example 2001012345).
WV originally provided us with detailed hand-written statements of the WC due for each claim paid. However, they changed their WC recordkeeping system in 04/1996. Information on WV WC claims paid prior to then was converted to the new computer system, know as ‘Workers’ Compensation Information System’ (WCIS). They began sending us computer printouts as verification of WC. Unfortunately, sometimes errors or omissions had occurred in their records conversion, and there were occasions when the computer records were inaccurate or incomplete, especially for the older claims. The most common example of this was a large retroactive payment shown as all due for a single day.
SSA was given on-line access to WCIS (with WC payment information) in 1998. Access to WV’s database changed throughout the years, from the original system, to their online Internet Application System, to the Online Management System (E-Comp) still in use today. Over the years we have received a variety of printouts that are all from their database. Although SSA’s access to E-Comp was ended 12/28/2007, E-Comp printouts are still occasionally seen.
I. WC Forms
West Virginia does not have standardized WC forms that have WC information useful to SSA, but PP and PT award letters often contain useful payment information. SA documents are almost always needed to determine the WC for offset, but are not standardized.