Presentation on theme: "WORKERS’ COMPENSATION How to Effectively Work with the WCAB, Insurance Companies and Attorneys To Collect From Workers’ Compensation Benefits."— Presentation transcript:
WORKERS’ COMPENSATION How to Effectively Work with the WCAB, Insurance Companies and Attorneys To Collect From Workers’ Compensation Benefits
YOUR PRESENTERS Angela Bott, Humboldt County DCSS Child Support Specialist III Alix Haik-Bruno, Sacramento County DCSS Child Support Officer III Steven Pesante, San Bernardino County DCSS Child Support Attorney IV
GOALS OF THIS PRESENTATION -- Give you a BASIC OVERVIEW of the Workers’ Compensation System -- Show where LCSAs INTERACT with the Workers’ Compensation System -- Discuss STRATEGIES on how to effectively collect child support from WCAB benefits and liens -- Tell you WHAT TO DO if something goes wrong with resolving your child support lien
Workers’ Compensation : Underused and Underestimated Least used enforcement action. ■ Very profitable if applied effectively. Can affect both FPM3 and FPM4. ■ Depends on the case and the life of the claim. ■ Professional knowledge and continuous education by LCSA staff members is needed.
MAJOR THEME TO REMEMBER
WCAB GUIDE Released on June 5, 2014, it’s a comprehensive written WCAB handbook available to print-out and take with you to hearings. Compilation of best practices by LCSAs and DCSS. The most updated version of this document can be found at California Central ________________________________ Review and understand the Glossary of terms contained within it
LIFE CYCLE OF A WORKERS’ COMPENSATION CASE Injury Medical Treatment Return to work Unable to return Total Temporary Disability (TTD) Permanent Disability (PD) Settlement CCP LC 4903(e) Not charged against settlement Charged against settlement
OVERVIEW OF THE WCAB SYSTEM The Workers’ Compensation system is an Administrative Law System which provides medical treatment and compensation for employees injured while working “on the job” Many observers say it favors workers at the expense of employers. It is an excellent source of periodic and lump-sum payments of child support to LCSAs.
OVERVIEW OF THE WCAB SYSTEM Understand what you are dealing with here... The applicant’s attorneys only receive 15% of the settlement as their fee, so actions are quickly handled, on a “quantity” basis. When liens are settled, you must make it easy to get paid. Telephone calls are usually made by litigants just once, on the day of the hearing or trial, so someone must be available to discuss your lien!
OVERVIEW OF THE WCAB SYSTEM A worker is injured while working. It must have a “nexus” to the job to be compensable. The worker usually finds an attorney and files an “Application for Adjudication”. 15% of settlement is their fee. If such a “nexus exists”, the claim is usually “accepted” and the workers is sent for medical treatment.
OVERVIEW OF THE WCAB SYSTEM If the nexus does not exist, the claim will be “denied”. Sometimes claims are settled for “nuisance” value. Once the Claim for Adjudication is opened, the State Department of Workers’ Compensation sends a list of new claims to the State DCSS. A “Match-up” occurs The LCSA with participant managing responsibility (PMR) then gets a list of tasks for obligors with open claims from the State DWC.
OVERVIEW OF THE WCAB SYSTEM LCSA IMPACT POINT - #1 Once the LCSA finds out there is a claim open, it takes two significant, yet separate steps: 1. Issues an IWO to the employer’s insurer [to collect from TDD benefits being paid – NOW] 2. Files a child support lien [to collect from the settlement – LATER]
OVERVIEW OF THE WCAB SYSTEM LCSA IMPACT POINT #2 Settling the child support lien when the case resolves at the end of the WCAB action But that comes a lot later, so stay tuned.
OVERVIEW OF THE WCAB SYSTEM The LCSA is authorized by California State Law to deduct 25% of Temporary Disability benefits payments to pay child support Code of Civil Procedure Section These deducted payments are NOT charged as advances against the eventual settlement
OVERVIEW OF THE WCAB SYSTEM The injured worker continues to receive medical treatment from his or her medical provider, and continues to receive Temporary Disability Benefits, and DCSS continues taking child support from TD benefits payments until... He or she is declared by the medical provider to be: “PERMANENT AND STATIONARY” This means the worker is stabilized and is going to be returned to their prior health as much as possible.
OVERVIEW OF THE WCAB SYSTEM EVERYTHING CHANGES NOW
DIFFERENCES BETWEEN TTD AND PD Total Temporary Disability (TTD): Intended to replace lost wages Max of 104 weeks of TTD benefits if injury occurred after April 19, 2004 [Labor Code Section 4656 (c) (1)] Based on the employees last earnings We can issue W/C IWO for up to 25% of the benefit (Code of Civil Procedure Section ) You do not have to be WCAB lien eligible to issue a W/C IWO
DIFFERENCES BETWEEN TTD AND PD Permanent Disability (PD): Issued once TTD runs out or injured worker is “P&S” or has reached “MMI” P&S: Permanent and Stationary MMI: Maximum Medical Improvement Not automatically garnishable. An order from a WCAB judge must authorize us to take a percentage of the benefit amount.
OVERVIEW OF THE WCAB SYSTEM #1 The injured worker no longer receives TD benefits – he or she now receives Permanent Disability benefits. Permanent Disability benefits payments, or “PDAs”, are considered “advances” against the eventual settlement of the claim
OVERVIEW OF THE WCAB SYSTEM #2 The LCSA’s IWO no longer works Generally, insurers will not deduct child support from Permanent Disability benefit payments Why? There is no law to authorize it
OVERVIEW OF THE WCAB SYSTEM #3 There is law to authorize 25% deductions from Temporary Disability benefits Code of Civil Procedure Section NO law authorizes child support deductions from Permanent Disability benefits
OVERVIEW OF THE WCAB SYSTEM #4. As Permanent Disability Benefits are paid out, the available compensation for child support is slowly paid out, until... There isn’t any money, anymore But – “Truck Insurance” says they must reserve out the amount of the lien
OVERVIEW OF THE WCAB SYSTEM LCSA IMPACT POINT #2 SETTLEMENT OF THE LIEN Assuming there IS money left, DCSS will seek to satisfy the lien. Labor Code Section 4903(e)
WORKERS’ COMPENSATION: EARLY INTERVENTION Information from employer: Injuries, employer response form, interruptions to employer IWO. EI005 task is generated on the case. A phone call can be the difference between a case not having payments for months or having a brief interruption in payments. Reach out to NCP and employer directly to find out more information.
WORKERS’ COMPENSATION: EARLY INTERVENTION ■FPM3: Keep recurring payments coming in. ■ TTD IWO ■ Is EDD paying the injured worker? ■ File a petition to withhold PD if eligible. ■FPM4: Lump Sum awards ■ File a WCAB lien if unpaid child support accrued from the date of injury. ■ Monitor cases for payout if ineligible for a WCAB lien for straight collections and/or other intercepts.
REFERRALS: DIR AND CSE EN043 tasks: Generated at the participant level. Weekly batch. SSN is used as the matching identifier. Likelihood of mismatches is high. Population of claim insurance screen, only automated CSE function in regards to workers compensation.
ESTABLISH AN EFFECTIVE WCAB UNIT Establish a telephone number to call to settle liens or get accurate WCAB lien balances Staff the telephone number during all business hours Train your staff to settle liens Give your WCAB staff settlement authority
ESTABLISH AN EFFECTIVE WCAB UNIT Train non-attorneys to be “Hearing Representatives” to expand coverage [Use the Hearing Representative Agreement form] Ask other LCSAs to make appearances for you, when required [Family Code Section 17400(o) Use the telephone call-in system, available in some areas. Update and mail out Amended Liens Use the newly-created “Petition to withhold Child Support from Permanent Disability benefits”
ESTABLISH AN EFFECTIVE WCAB UNIT BE PROACTIVE!
DATA SOURCES: CSLN, OCSE and EAMS CSLN: Matches are handled within CSLN first, not CSE. Only active claims are then transitioned manually by the LCSA to CSE. Not only workers’ compensation claims feed through. For optimal claim management, large counties should review daily, smaller counties once a week. Can be used for other purposes like COAP asset research
DATA SOURCES: CSLN, OCSE and EAMS OCSE: State DCSS staff handles incoming matches. Claim is manually loaded into CSE. Workers’ Compensation IWOs are generated directly out of CSE.
DATA SOURCES: CSLN, OCSE and EAMS EAMS Public Search Tool: Not to be confused with the internal EAMS platform Main search done by first and last name. DOB can be added for accuracy. Events’ information is becoming more accurate each day.
FILING LIENS Paper liens are unreliable, slow and cumbersome… Switching to e-filing is easy and free. One central location processes documents, no need to deal with WCAB branch specifics or response timeframes. Less use of paper, no need for cover sheets. Savings in postage
FILING LIENS How can I transition into e-filing? Contact DIR. They host a cost free monthly webinar to train staff into the specifics of e-filing. Adapt your department’s procedures.
SETTLING LIENS The law covering liens and their resolution is outlined by Labor Code Section 4903(e) LCSAs are called “Child Support Lien Claimants”
SETTLING LIENS OPENING LIENS Created when the claim is first received, along with the IWO for TD payment deductions Filed with the Board – mailed to parties AMENDED LIENS Created when a matter is set for MSC, Trial or Lien Conference – Lien Trial NOT filed with the Board – mailed to the parties
SETTLING LIENS LCSA REQUIRED APPEARANCES MSC when lien over $25k Any Trial Lien Conferences Lien Trials At any proceeding the court requests your LCSA to be present
SETTLING LIENS WCAB LITIGANTS MUST ATTEMPT TO CONTACT YOU TO RESOLVE THE LIEN *** They must telephone you at least once *** Insertion of the phrase into the settlement documents stating litigants will “pay, adjust or litigate the child support lien” is NO longer permissible
SETTLING LIENS Most settlements take the form of a lump-sum payment called a Compromise & Release Less frequently, the applicant reserves their right to future medical treatment, and gets paid in periodic payments in a Findings & Award
SETTLING LIENS The following protocols are to be used when there is a COMPROMISE & RELEASE SETTLEMENT
SETTLING LIENS What amount do you ask for in resolving the lien? It entirely depends on what amount of money is on the table Do your research, first!
SETTLING LIENS FIRST, determine the GROSS settlement amount THEN, deduct out the following: Attorney fees at 15% of settlement gross & Permanent Disability Advances
SETTLING LIENS What remains is the NET settlement amount Example: GROSS settlement amount - $20,000 Less Attorney fees (15%) - $3,000 Less PDAs - $6,000 _________________ $11,000 is the NET settlement
SETTLING LIENS Now, evaluate the NET settlement amount If you can pay the lien in full, and leave the same or greater amount for the applicant, REQUEST THE LIEN BE PAID IN FULL If you cannot pay the lien in full, and leave the same or greater amount for the applicant, SPLIT THE NET SETTLEMENT 50-50%
SETTLING LIENS Examples Net Settlement is $11,000 LCSA lien is $3,000 Ask for entire lien to be paid This leaves the applicant $8,000
SETTLING LIENS Examples Net Settlement is $11,000 LCSA lien is $6,000 Ask for $5,500 Split the net with the applicant
SETTLING LIENS When to ask for “a little bit more, Sir” History of LCSA payments is poor. Future payments are unlikely. You sense the Board Judge is favorable to suggesting a higher lien pay-out You can talk the Applicant/Applicant’s attorney into more since it will benefit their LCSA situation
SETTLING LIENS Lack of Attorney Understanding of WCAB process On occasion, some applicant attorneys will attempt to claim that no more than 25% of the settlement can be used to resolve the child support lien... WRONG!
SETTLING LIENS This misunderstanding comes from confusing the statute which allows 25% of TD payments: i.e., Code of Civil Procedure Section with the correct code which allows Board Judges complete discretion to resolve the lien in any amount they feel is appropriate: i.e., Labor Code Section 4903(e)
SETTLING LIENS In the event you are bullied, thwarted, browbeaten, ridiculed, belittled or otherwise mistreated by an applicant’s attorney who does not wish to resolve the lien pursuant to this widely-used, reasonable protocol, CALL THEIR BLUFF! Ask that the Court reserve the full amount of the lien, and order a Lien Conference be set to litigate the lien
SETTLING LIENS When settlement talks are taking place, outline your settlement strategy to the parties Attend ALL chamber conferences with the Judge Remember – the litigants cannot settle the case without settling the child support lien, especially when child support lien is substantial in size
SETTLING LIENS Oh, heck – they selected a “Findings & Award” settlement NOW WHAT? Applicant will now receive a modest, bi-weekly periodic payment until their entire compensation is paid out – this could take years How does a LCSA get more than just a few $$$ a week?
SETTLING LIENS INVOKE THE PHRASE ALL APPLICANT’S ATTORNEY FEAR... “Your Honor, I would like to satisfy our child support lien by commuting off the far end of the award” And what does THAT mean?
SETTLING LIENS The court will likely be sympathetic to the LCSA’s situation. The court will then allow a lump-sum “commutation” of periodic payments at the end of the payment cycle to be converted to a one-time, lump-sum payment made payable to the LCSA.
SETTLING LIENS COMMUTATION EXAMPLE Applicant is owed 240 payments of $ bi-weekly to pay off his compensation award of $44, You ask for 35 payments to be “commuted” to pay off the child support lien of $6,400.00
SETTLING LIENS For All Lien Settlements... PLACE THE SETTLEMENT PROVISIONS REGARD IN THE LIEN INTO THE SETTLEMENT DOCUMENTS [Get a copy of the settlement documents] ALWAYS REQUEST THAT THE INSURER PAY THE CHILD SUPPORT LIEN DIRECTLY TO THE SDU NEVER ALLOW THE APPLICANT OR APPLICANT’S ATTORNEY TO PAY THE LIEN FROM THEIR PROCEEDS
SETTLING LIENS Lien Conferences and Lien Trials LCSA representatives must attend or your lien might be resolved without your input, or disallowed Trials can involve testimony, and even witnesses Informal rules of Evidence are used
WHEN UNFORTUNATE THINGS HAPPEN Why do unfortunate things happen? Again, it is the nature of this system. Things happened quickly, there is not sufficient time to check things (like your child support lien balance) correctly, and the parties are more interested in getting the case resolved than getting your lien exactly right OR You didn’t file your lien electronically
WHEN UNFORTUNATE THINGS HAPPEN How to guard against this? Electronically file your liens – most important! Call litigants before and after each hearing Stay in the minds of the litigants by making telephone calls and amending liens Develop a relationship with your WCAB Judges Frequently attend hearings, to show LCSA interest
WHEN UNFORTUNATE THINGS HAPPEN SO, what can go wrong? Your child support lien is omitted completely from the settlement Your child support lien is underpaid NO money is left to pay the child support lien
WHEN UNFORTUNATE THINGS HAPPEN NOTIFY THE LITIGANTS OF THE PROBLEM [by telephone, and confirm by FAX/Letter] Ask the Defense counsel NOT to pay out the settlement money until the lien is resolved, or in the alternative, pay out all but the full amount of the lien. File a Petition for Reconsideration Or Declaration of Readiness
WHEN UNFORTUNATE THINGS HAPPEN Insurers are required to pay out the settlement proceeds within thirty (30) calendar days of settlement documents being approved by the court. You must file for your relief promptly! Petitions for Reconsideration must be filed within twenty (20) calendar days of the award [Labor Code Section 5903]
WHEN UNFORTUNATE THINGS HAPPEN RECONSIDERATION FORM Found on the Department of Workers’ Compensation website Use the DECLARATION OF READINESS FORM if the defense counsel agrees to wait to pay out the settlement until the child support lien issue is resolved
CLOSING CONSIDERATIONS TO MAXIMIZE YOUR WCAB COLLECTIONS 1. ESTABLISH AN EFFECTIVE WCAB UNIT Be available during business hours Workers should have settlement authority Train your personnel on WCAB issues Use Hearing representatives Electronically file liens
CLOSING CONSIDERATIONS 2. PAY ATTENTION Telephone litigants before and after hearings Amend and mail out liens frequently Develop a relationship with your WCAB Judges Watch for omitted or underpaid liens Attend hearings frequently Keep WCAB contact list updated and accurate
CLOSING CONSIDERATIONS 3. USE YOUR RESOURCES Read and use the WCAB Guide Understand the Glossary of Terms Contact other LCSAs for assistance in attending remote WCAB hearings
RESOURCES California Central: Workers’ Compensation Procedures Manual Workers’ Compensation Master Contact List Hearing Representative Agreement
Time for Questions
CLOSING CONSIDERATIONS BE PROACTIVE
CONTACT INFORMATION Angela Bott, Humboldt County DCSS Child Support Specialist III ( 707) Alix Haik-Bruno, Sacramento County DCSS Child Support Officer III (916) Steven Pesante, San Bernardino County DCSS Child Support Attorney IV (909)