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ATLA – NJ FIVE CONCURRENT SEMINARS DECEMBER 2, 2006 WORKERS COMPENSATION THIRD PARTY ACTIONS AND STATE DISABILITY LIENS GREENBERG, WALDEN & GROSSMAN, L.L.C.

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Presentation on theme: "ATLA – NJ FIVE CONCURRENT SEMINARS DECEMBER 2, 2006 WORKERS COMPENSATION THIRD PARTY ACTIONS AND STATE DISABILITY LIENS GREENBERG, WALDEN & GROSSMAN, L.L.C."— Presentation transcript:

1 ATLA – NJ FIVE CONCURRENT SEMINARS DECEMBER 2, 2006 WORKERS COMPENSATION THIRD PARTY ACTIONS AND STATE DISABILITY LIENS GREENBERG, WALDEN & GROSSMAN, L.L.C.

2 PRESENTED BY: RANDY GROSSMAN, ESQ. Greenberg, Walden & Grossman, L.L.C. randy@greenberg-walden.com201-854-2200 GREENBERG, WALDEN & GROSSMAN, L.L.C.

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5 The Department of Labor established new rule: N.J.A.C. 12:235-3.16 (effective Sept. 18, 2006) The rule codifies procedures for handling cases where claimant pursues temporary disability benefits under both the Temporary Disability Benefits Law (N.J.S.A. 43:21-25 et seq.) and the Workers Compensation Act. The rule codifies procedures for handling cases where claimant pursues temporary disability benefits under both the Temporary Disability Benefits Law (N.J.S.A. 43:21-25 et seq.) and the Workers Compensation Act. N.J.S.A. 43:21-30 prohibits the payment of temporary disability benefits for the same period of disability under both TDBL and WCA, a concept referred to as non- duplication of benefits. N.J.S.A. 43:21-30 prohibits the payment of temporary disability benefits for the same period of disability under both TDBL and WCA, a concept referred to as non- duplication of benefits.

6 Where a petitioners claim for temporary disability benefits under the WCA is contested (i.e., where the work relatedness of the disability for which the claimant is seeking temporary disability benefits has yet to be determined), the Division of Temporary Disability Insurance or the private plan carrier may pay benefits.

7 Where workers compensation benefits are subsequently awarded for weeks with respect to which the claimant has received benefits under the TDBL, the Division of Temporary Disability Benefits or the private plan carrier is entitled to be subrogated to the extent of temporary disability paid. Where workers compensation benefits are subsequently awarded for weeks with respect to which the claimant has received benefits under the TDBL, the Division of Temporary Disability Benefits or the private plan carrier is entitled to be subrogated to the extent of temporary disability paid. Non-duplication of benefits and right of subrogation govern the interaction between the two disability programs where there is concurrent jurisdiction of two divisions of the Department of Labor. Non-duplication of benefits and right of subrogation govern the interaction between the two disability programs where there is concurrent jurisdiction of two divisions of the Department of Labor.

8 Prior to the enactment of N.J.A.C. 12:235- 3.16, there was no procedure memorialized in the law – the method traditionally employed by the Division of Workers Compensation and the Division of Temporary Disability was based on various, long-standing practices. Prior to the enactment of N.J.A.C. 12:235- 3.16, there was no procedure memorialized in the law – the method traditionally employed by the Division of Workers Compensation and the Division of Temporary Disability was based on various, long-standing practices. N.J.A.C. 12:235-3.16 sets forth a uniform procedure to be followed by both the Division of Temporary Disability Insurance and the Division of Workers Compensation where the petitioner is pursuing temporary disability benefits under both TDBL and the WCA. N.J.A.C. 12:235-3.16 sets forth a uniform procedure to be followed by both the Division of Temporary Disability Insurance and the Division of Workers Compensation where the petitioner is pursuing temporary disability benefits under both TDBL and the WCA.

9 Non-Duplication of Benefits under the Temporary Disability Benefits Law and the Workers Compensation Act; Temporary Disability Benefits Liens in Workers Compensation Cases: N.J.A.C. 12:235-3.16 (a) Administrative procedures for avoiding duplication of benefits in cases where claimants have pursued temporary disability benefits under both the Temporary Disability Benefits Law, N.J.S.A. 43:21-25 et seq. (hereinafter referred to in this section as the "TDBL") and the Workers' Compensation Act, N.J.S.A. 34:15-1 et seq. (hereinafter referred to in this section as the "WCA") are as follows: N.J.S.A. 43:21-25N.J.S.A. 34:15-1 N.J.S.A. 43:21-25N.J.S.A. 34:15-1

10 1. Where a claimant has filed a claim petition under the WCA and where his or her claim is disputed or contested by the employer or its workers' compensation carrier in regard to whether temporary disability benefits are due to the claimant in workers' compensation, then such claimant may apply for temporary disability benefits under the TDBL and, if eligible, may receive temporary disability benefits as allowable by law during the pendency of the workers' compensation claim. 1. Where a claimant has filed a claim petition under the WCA and where his or her claim is disputed or contested by the employer or its workers' compensation carrier in regard to whether temporary disability benefits are due to the claimant in workers' compensation, then such claimant may apply for temporary disability benefits under the TDBL and, if eligible, may receive temporary disability benefits as allowable by law during the pendency of the workers' compensation claim. 2. Where a claimant has not filed a workers' compensation claim and seeks benefits through the TDBL due to an alleged work-related condition, the Division of Temporary Disability Insurance or private plan disability carrier shall deny said benefits and inform the claimant that should he or she file a workers' compensation claim, benefits may be payable pursuant to the TDBL under (a)1 above. 2. Where a claimant has not filed a workers' compensation claim and seeks benefits through the TDBL due to an alleged work-related condition, the Division of Temporary Disability Insurance or private plan disability carrier shall deny said benefits and inform the claimant that should he or she file a workers' compensation claim, benefits may be payable pursuant to the TDBL under (a)1 above.

11 3. As a condition to receiving temporary disability benefits under (a)1 above, a claimant shall be required to sign a written subrogation agreement which documents that the claimant will prosecute the workers' compensation claim and reimburse the Division of Temporary Disability Insurance or private plan disability carrier, as applicable, from the proceeds of any workers' compensation benefits the claimant subsequently receives based upon the same injury or illness as that for which the temporary disability benefits were obtained under the TDBL. 3. As a condition to receiving temporary disability benefits under (a)1 above, a claimant shall be required to sign a written subrogation agreement which documents that the claimant will prosecute the workers' compensation claim and reimburse the Division of Temporary Disability Insurance or private plan disability carrier, as applicable, from the proceeds of any workers' compensation benefits the claimant subsequently receives based upon the same injury or illness as that for which the temporary disability benefits were obtained under the TDBL. 4. As a result of the subrogation agreement under (a)3 above, the Division of Temporary Disability Insurance or private plan disability carrier shall have the right to file a notice of lien with the Division of Workers' Compensation that shall apply against any workers' compensation award the claimant subsequently receives that is based upon the same injury or illness as that for which the temporary disability benefits were obtained under the TDBL. 4. As a result of the subrogation agreement under (a)3 above, the Division of Temporary Disability Insurance or private plan disability carrier shall have the right to file a notice of lien with the Division of Workers' Compensation that shall apply against any workers' compensation award the claimant subsequently receives that is based upon the same injury or illness as that for which the temporary disability benefits were obtained under the TDBL.

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13 5. Where the Division of Temporary Disability Insurance or private plan disability carrier has paid benefits to a claimant under the TDBL and later has reason to believe that the injury or illness upon which the TDBL benefits were based may also be compensable under the WCA, the Division of Temporary Disability Insurance or private plan disability carrier may file a lien against any workers' compensation claim. 5. Where the Division of Temporary Disability Insurance or private plan disability carrier has paid benefits to a claimant under the TDBL and later has reason to believe that the injury or illness upon which the TDBL benefits were based may also be compensable under the WCA, the Division of Temporary Disability Insurance or private plan disability carrier may file a lien against any workers' compensation claim. 6. Where a lien has been filed pursuant to (a)4 or 5 above, or where the parties and/or the Judge of Compensation become aware during workers' compensation proceedings that benefits had been paid under the TDBL, the Division of Temporary Disability Insurance or private plan disability carrier shall be reimbursed the amount of temporary disability benefits paid pursuant to the TDBL from any workers' compensation award, order, or settlement including lump sum or permanent disability benefits the claimant receives. 6. Where a lien has been filed pursuant to (a)4 or 5 above, or where the parties and/or the Judge of Compensation become aware during workers' compensation proceedings that benefits had been paid under the TDBL, the Division of Temporary Disability Insurance or private plan disability carrier shall be reimbursed the amount of temporary disability benefits paid pursuant to the TDBL from any workers' compensation award, order, or settlement including lump sum or permanent disability benefits the claimant receives. 7. Where a claimant's workers' compensation award, order, or settlement after deductions for allowances totals less than the amount of the benefits paid under the TDBL, then the net amount due to the petitioner shall be reimbursed to the Division of Temporary Disability Insurance or private plan disability carrier in full satisfaction of the petitioner's obligation resulting from the written subrogation agreement.

14 8. While a judge of compensation would determine any contested issue with respect to temporary disability benefits payable by the respondent under the WCA, should a claimant wish to contest the amount of the lien or reimbursement required under (a)6 above or other issues related to the lien or reimbursement, including disabilities covered by the lien or reimbursement, the claimant shall either: 8. While a judge of compensation would determine any contested issue with respect to temporary disability benefits payable by the respondent under the WCA, should a claimant wish to contest the amount of the lien or reimbursement required under (a)6 above or other issues related to the lien or reimbursement, including disabilities covered by the lien or reimbursement, the claimant shall either: i. Reimburse the amount of the temporary disability insurance lien as part of the workers' compensation award, order or settlement and then appeal, pursuant to (a)9 and 10 below, such amount or other issues related to the lien within 24 days from the date of the workers' compensation award, order or settlement; or i. Reimburse the amount of the temporary disability insurance lien as part of the workers' compensation award, order or settlement and then appeal, pursuant to (a)9 and 10 below, such amount or other issues related to the lien within 24 days from the date of the workers' compensation award, order or settlement; or ii. File an appeal, pursuant to (a)9 and 10 below, of the reimbursement amount or other issues related to the lien, which shall stay the workers' compensation proceedings until the reimbursement issue is determined. ii. File an appeal, pursuant to (a)9 and 10 below, of the reimbursement amount or other issues related to the lien, which shall stay the workers' compensation proceedings until the reimbursement issue is determined.

15 Approximately 1,300 temporary disability insurance liens are filed per year by the Division of Temporary Disability Insurance against workers compensation awards. During 2005, the Division of Temporary Disability Insurance recovered liens of approximately $ 5.65 million through State plan and temporary disability during unemployment.

16 Methods for resolving or negotiating TDB liens: Get application for State Disability benefits; review injuries claimed and whether all or part are relevant to the workers compensation case. Get application for State Disability benefits; review injuries claimed and whether all or part are relevant to the workers compensation case. Get treating doctors office records. Get treating doctors office records. Petitioner may use personal/family doctor; petitioner may have other medical conditions that render him temporarily, totally disabled. Petitioner may use personal/family doctor; petitioner may have other medical conditions that render him temporarily, totally disabled.

17 Requirements for TDB differ from WCA: for TDB, claimant is unable to perform the job from which he was injured; under WCA, petitioner is temporarily, totally disabled if unable to perform any type of work. Q: If there are multiple injuries being treated and not all from the accident, then can doctor apportion the overall temporary disability? Q: If there are multiple injuries being treated and not all from the accident, then can doctor apportion the overall temporary disability?

18 Get complete set of hospital records; compare clients initial complaints and diagnoses with the treating doctors notes. Get complete set of hospital records; compare clients initial complaints and diagnoses with the treating doctors notes. Expert physicians narrative report should include details of treatment (reasonable and necessary treatment) and temporary disability opinion. Expert physicians narrative report should include details of treatment (reasonable and necessary treatment) and temporary disability opinion. Prepare written summary of why TDB lien should not be fully or partially reimbursed from petitioners claim; organize all medical documentation that supports your argument. Prepare written summary of why TDB lien should not be fully or partially reimbursed from petitioners claim; organize all medical documentation that supports your argument.

19 Q: Are all potentially, compensible medical conditions relevant to the conditions claimed in TDB application? Q: Are all potentially, compensible medical conditions relevant to the conditions claimed in TDB application? Q: Are there jurisdictional issues that give rise to potential dismissal (i.e., Section 20)? Q: Are there jurisdictional issues that give rise to potential dismissal (i.e., Section 20)? Per new code, this is the suggested method of resolution. Per new code, this is the suggested method of resolution. Request phone conference between Judge and Temporary Disability Benefits representative (Ed Harding):

20 TDB will review information and potentially adjust liens in whole or in part. TDB will review information and potentially adjust liens in whole or in part. TDB will notify petitioner of his final decision; if unfavorable, then he will inform in writing of right to appeal. TDB will notify petitioner of his final decision; if unfavorable, then he will inform in writing of right to appeal. TDB does not negotiate liens.

21 If TDB lien is substantial in light of potential offer of settlement, then request a hearing on the limited issue of compensability of the lien. If TDB lien is substantial in light of potential offer of settlement, then request a hearing on the limited issue of compensability of the lien. Utilize the new administrative rule by either A) filing an administrative appeal and stay the workers compensation case, or B) file an administrative appeal with 24 days of the workers compensation award, order or settlement. Utilize the new administrative rule by either A) filing an administrative appeal and stay the workers compensation case, or B) file an administrative appeal with 24 days of the workers compensation award, order or settlement.

22 Third Party Liens: Section 40 Injured employees or their dependents are permitted to pursue claims against third party tortfeasors under the Workers' Compensation Act. In order to prohibit double recovery by the employee, statutory provisions have been enacted to permit reimbursement to the employer for recoveries made by the employee against a third party tortfeasor. N.J.S.A. 34:15-40. Injured employees or their dependents are permitted to pursue claims against third party tortfeasors under the Workers' Compensation Act. In order to prohibit double recovery by the employee, statutory provisions have been enacted to permit reimbursement to the employer for recoveries made by the employee against a third party tortfeasor. N.J.S.A. 34:15-40.

23 34:15-40. Liability of third party. Where a third person is liable to the employee or his dependents for an injury or death, the existence of a right of compensation from the employer or insurance carrier under this statute shall not operate as a bar to the action of the employee or his dependents, nor be regarded as establishing a measure of damage therein. In the event that the employee or his dependents shall recover and be paid from the said third person or his insurance carrier, any sum in release or in judgment on account of his or its liability to the injured employee or his dependents, the liability of the employer under this statute thereupon shall be only such as is hereinafter in this section provided.

24 The employer is only responsible for paying its pro rata share of the counsel fee, and where the counsel fee is less than 33 1/3%, then the employer's responsibility is reduced to the percentage of the counsel fee actually assessed on the third party action. Pagan v. Hillside Metal Products, Inc., 140 N.J.Super. 154, 355 A.2d 690 (App.Div. 1976).

25 The benefits which were paid by an employer for medical services are subject to reimbursement and are included in the determination of the employer's lien. The benefits which were paid by an employer for medical services are subject to reimbursement and are included in the determination of the employer's lien. In Raso v. Ross Steel Erectors, Inc., 319 N.J.Super. 373, 725 A.2d 690 (App.Div.1999), the respondent was entitled to assert a lien for the services provided by a rehabilitation nurse as the expenses could be demonstrated to provide care that was necessary to cure and relieve the employee from the effects of the injury. The Court permitted apportionment of the expenses if not all can be deemed to meet that criteria. In Raso v. Ross Steel Erectors, Inc., 319 N.J.Super. 373, 725 A.2d 690 (App.Div.1999), the respondent was entitled to assert a lien for the services provided by a rehabilitation nurse as the expenses could be demonstrated to provide care that was necessary to cure and relieve the employee from the effects of the injury. The Court permitted apportionment of the expenses if not all can be deemed to meet that criteria.

26 The employer's negligence plays no part in the operation of N.J.S.A. 34:15-40; there is no joint liability of the employer and the third-party tortfeasor to the injured employee. Even if the employer's negligence contributed to the employee's injury, the employer's right to reimburse- ment is not extinguished. Schweizer v. Elox Division of Colt Industries, 70 N.J. 280, 359 A.2d 857 (1976). The employer's negligence plays no part in the operation of N.J.S.A. 34:15-40; there is no joint liability of the employer and the third-party tortfeasor to the injured employee. Even if the employer's negligence contributed to the employee's injury, the employer's right to reimburse- ment is not extinguished. Schweizer v. Elox Division of Colt Industries, 70 N.J. 280, 359 A.2d 857 (1976).

27 The employer is limited to those injuries for which a third party claim was actually asserted, and third party recovery obtained by an employee during his lifetime is not considered to be a recovery in favor of his dependents following his death, against which an employer can impose a lien. The surviving spouse of a firefighter, individually and as administratrix of the estate of a firefighter brought a civil action against the public entity, the fire department, fire director, fire chief and electric utility alleging multiple causes of action including survival and wrongful death. The Court held that the workers' compensation lien attaches to any amount recovered in a wrongful death action, but that it does not attach to the proceeds of a survival claim for pain and suffering, when the injured employee had not filed a claim petition nor received any workers' compensation benefits. DeLane ex rel. DeLane v. City of Newark, 343 N.J.Super. 225, 778 A.2d 511 (App.Div.2001). The employer is limited to those injuries for which a third party claim was actually asserted, and third party recovery obtained by an employee during his lifetime is not considered to be a recovery in favor of his dependents following his death, against which an employer can impose a lien. The surviving spouse of a firefighter, individually and as administratrix of the estate of a firefighter brought a civil action against the public entity, the fire department, fire director, fire chief and electric utility alleging multiple causes of action including survival and wrongful death. The Court held that the workers' compensation lien attaches to any amount recovered in a wrongful death action, but that it does not attach to the proceeds of a survival claim for pain and suffering, when the injured employee had not filed a claim petition nor received any workers' compensation benefits. DeLane ex rel. DeLane v. City of Newark, 343 N.J.Super. 225, 778 A.2d 511 (App.Div.2001).

28 Funeral expenses are not considered to be payments of compensation and are not includable in a lien against third party recovery asserted by an employer. O'Brien v. New Jersey State Highway Dept., 11 N.J.Super. 548, 78 A.2d 717 (App.Div.1951). Funeral expenses are not considered to be payments of compensation and are not includable in a lien against third party recovery asserted by an employer. O'Brien v. New Jersey State Highway Dept., 11 N.J.Super. 548, 78 A.2d 717 (App.Div.1951). Damages awarded or allocated under the per quod claim are not subject to a lien. Weir v. Market Transition Facility of New Jersey, et al., 318 N.J.Super. 436, 723 A.2d 1231 (App.Div.1999). Damages awarded or allocated under the per quod claim are not subject to a lien. Weir v. Market Transition Facility of New Jersey, et al., 318 N.J.Super. 436, 723 A.2d 1231 (App.Div.1999).

29 Payments made pursuant to N.J.S.A. 34:15-20 are not considered payments of compensation and are not subject to reimbursement should there be third party recovery. The lump-sum payment by the carrier in settlement with the common-law wife of the deceased was exempt from the carrier's general lien for reimbursement out of the proceeds paid by the third party. The court stated that the lump-sum settlement of the controversy between the employer and the employee or dependents of the employee was recognized as payment of workers' compensation benefits for insurance rating purposes only. Such settlement had the force and effect of a dismissal of the claim petition, was final and conclusive upon the petitioner, and was a complete surrender of any right to compensation or other benefits arising out of the claim. Aetna Life and Casualty v. Estate of Engard, 218 N.J.Super. 239, 527 A.2d 497 (Law Div.1986). Payments made pursuant to N.J.S.A. 34:15-20 are not considered payments of compensation and are not subject to reimbursement should there be third party recovery. The lump-sum payment by the carrier in settlement with the common-law wife of the deceased was exempt from the carrier's general lien for reimbursement out of the proceeds paid by the third party. The court stated that the lump-sum settlement of the controversy between the employer and the employee or dependents of the employee was recognized as payment of workers' compensation benefits for insurance rating purposes only. Such settlement had the force and effect of a dismissal of the claim petition, was final and conclusive upon the petitioner, and was a complete surrender of any right to compensation or other benefits arising out of the claim. Aetna Life and Casualty v. Estate of Engard, 218 N.J.Super. 239, 527 A.2d 497 (Law Div.1986).

30 Respondent is not entitled to lien reimbursement when the third party tortfeasor's insurance carrier has become insolvent and the New Jersey Property Liability Insurance Guaranty Association has undertaken the defense and indemnification of the tortfeasor. The court confirmed that injured workers are not entitled to double recovery for the same injury and that the Guaranty Association is obliged to pay only the difference between workers' compensation benefits and the employee's recovery against the tortfeasor if the latter is greater than the former. In any event, the workers' compensation insurer is limited in asserting its reimbursement lien to a claim against the insolvent insurer's receiver and may not assert a lien against the Guaranty Association. Sussman v. Ostroff, 232 N.J.Super. 306, 556 A.2d 1301 (App.Div.1989), certif. denied 117 N.J. 143, 564 A.2d 865 (1989). Respondent is not entitled to lien reimbursement when the third party tortfeasor's insurance carrier has become insolvent and the New Jersey Property Liability Insurance Guaranty Association has undertaken the defense and indemnification of the tortfeasor. The court confirmed that injured workers are not entitled to double recovery for the same injury and that the Guaranty Association is obliged to pay only the difference between workers' compensation benefits and the employee's recovery against the tortfeasor if the latter is greater than the former. In any event, the workers' compensation insurer is limited in asserting its reimbursement lien to a claim against the insolvent insurer's receiver and may not assert a lien against the Guaranty Association. Sussman v. Ostroff, 232 N.J.Super. 306, 556 A.2d 1301 (App.Div.1989), certif. denied 117 N.J. 143, 564 A.2d 865 (1989).

31 Dealing with section 40 liens: Discuss with petitioner during initial consultation. Discuss with petitioner during initial consultation. Client may think he can have a double recovery of money. Client may think he can have a double recovery of money. Remind client that you (or both his attorneys) will try to recover money in both claims that when considered as a whole, fully and fairly compensates client. Remind client that you (or both his attorneys) will try to recover money in both claims that when considered as a whole, fully and fairly compensates client.

32 Periodically request that W/C carriers subrogation department provide complete lien statement: Periodically request that W/C carriers subrogation department provide complete lien statement: Lien should be itemized, including medical, temporary, and permanent disability benefits paid. Lien should be itemized, including medical, temporary, and permanent disability benefits paid. Review all amount included in payment of medical benefits Review all amount included in payment of medical benefits

33 Maintain communication with W/C carrier throughout third party claim. Maintain communication with W/C carrier throughout third party claim. Inform carrier of any difficult issues in third party case (i.e., Title 59, Verbal Threshold, Liability issues) Inform carrier of any difficult issues in third party case (i.e., Title 59, Verbal Threshold, Liability issues) Provide carrier with written summary outlining third party case and issues; provide supporting documentation (deposition transcripts, relevant case law or statutes) Provide carrier with written summary outlining third party case and issues; provide supporting documentation (deposition transcripts, relevant case law or statutes)

34 Be careful when resolving third party case when client is still getting medical treatment benefits from compensation carrier. Be careful when resolving third party case when client is still getting medical treatment benefits from compensation carrier. Negotiate compromise of lien so that client can continue to receive treatment payable 100%. Negotiate compromise of lien so that client can continue to receive treatment payable 100%.

35 Q: Confirm compromise agreement in writing! Does compromise of outstanding lien end future lien assertions if future compensation benefits provided? Q: Confirm compromise agreement in writing! Does compromise of outstanding lien end future lien assertions if future compensation benefits provided? Q: If med/temp compensation benefits paid but case ends via Section 20, does subsequent third party settlement require reimbursement of those comp benefits paid? Q: If med/temp compensation benefits paid but case ends via Section 20, does subsequent third party settlement require reimbursement of those comp benefits paid?

36 Randy Grossman, Esq. Greenberg, Walden & Grossman, L.L.C. 425 59th Street West New York, NJ 07093 201-854-2200 201-854-4293 fax randy@greenberg-walden.com randy@greenberg-walden.com www.greenberg-walden.com www.greenberg-walden.com


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