III. POSSIBLE BENEFITS IN ADDITION TO WORKERS' COMPENSATION
Third Party Lawsuits
If the worker is injured on the job by a third party (someone other than the employer or a co-worker), the worker may sue the third party in a personal injury suit under "common law" principles and may also file a claim under workers' compensation. An example would be a delivery person who is involved in a car accident where the other driver, the third party, caused the accident. The third party suit should be filed within one year of the date of the injury. A third-party suit may be filed thereafter, within the time from one year to two years after the injury, if the injured worker first obtains the written consent of the industrial insurance carrier to do so. Workers' compensation benefits which are received before the trial or settlement of the third party lawsuit must be repaid out of any recovery from the third party personal injury suit, with any balance on the recovery being applied as a "lien" against future benefits. The worker must also get the compensation insurance carrier/employer to approve any settlement of the third party personal injury case or risk losing rights to further benefits.
AN EXCEPTION to the one-year time limit applies to any CLAIM AGAINST A GOVERNMENT ENTITY. THAT CLAIM MUST BE FILED WITHIN 180 DAYS FROM THE DATE OF THE ACCIDENT OR INJURY OR THE DATE YOU KNEW OR SHOULD HAVE KNOWN ABOUT THE ACCIDENT OR INJURY. The reduced time limits to file against government entities is not limited to workers' compensation claims but applies to any claim for injuries caused by a government agency or employee of that agency while working for the agency. The rest of the procedures outlined above still apply once the claim is timely filed.
It is important because of the interrelationship between third party claims and workers' compensation cases that a lawyer who represents in the third party claim have experience in dealing with cases involving both types of claims, or at least be willing to consult with a workers' compensation attorney to be sure that your rights are protected in both claims. WE WILL ASSIST YOU IN FINDING A QUALIFIED AND COMPETENT ATTORNEY IF YOU NEED HELP.
Bad Faith and Unfair Claims Practices Through ICA
The definition of what is bad faith or unfair claims practice as well as how to apply the 25% penalty is difficult to determine. The Rules of Procedure before the Industrial Commission generally describe ''unreasonable'' conduct of various kinds on the part of the insurance carrier or employer as sufficient basis for a claim. Obviously, what is "unreasonable" is subject to different interpretations as well as to when the 25% penalty should apply. Arguments about those things usually result in litigation.
If a worker or an attorney believes there is a claim for bad faith or unfair claims practice, he or she must obtain a form from the ICA and complete and file the form with the ICA for an initial determination by the ICA. After the initial determination is made by the ICA, if either side disagrees, a hearing may be requested and the matter is heard by an ALJ, just as any other request for hearing.
Often these cases are hotly contested by the insurance carrier or employer and the amounts of the recovery are so small that it may not be worthwhile to pursue the claim. If you have an attorney representing you, the attorney will be glad to advise you whether you have such a claim. If you are not represented, you may consult with the Ombudsperson at the ICA, whose name and phone number appear at the end of this booklet.
While it is not clear how long you have to file such a claim, to be safe the claim should be filed no later than 1 year from the date you or your attorney knew or should have known of the "bad faith or unfair claims practice" by the insurance carrier.
Bad Faith As A Separate Litigation
In a workers' compensation claim, if an insurance carrier or employer has little or no justification or basis for their delay or refusal to pay benefits to the injured worker and the injured worker is damaged by that action, he/she may file a separate claim in Superior Court for that misconduct otherwise known as "bad faith." Our Arizona legislature attempted to take away that right to sue by enacting the statute (as described on the preceding pages), which appeared to limit filing bad faith claims to the ICA. However, the Supreme Court of Arizona recently declared that workers have a choice of filing in either Superior Court or at the ICA where there has been "bad faith" misconduct.
The advantages to filing a lawsuit in Superior Court for "bad faith" include a jury trial, payment of actual damages to the worker and/or his family (not limited to a percentage of what the carrier has failed to pay as in the ICA claims) and even "punitive damages" under special circumstances. The disadvantages are that lawsuits are time consuming, costly and generally more difficult to prove than claims before the ICA, which are broader than just "bad faith." (The ICA, for example, permits filing for "unfair claims practices" as well as "bad faith".)
REMEMBER THAT EVERY NEGATIVE ACTION THAT AN INSURANCE CARRIER TAKES IS NOT "BAD FAITH!" If you feel there is no basis for the carrier or employer's conduct and it has caused you some harm, a "bad faith" claim should be investigated by an attorney. After that investigation if there appears to be "bad faith" a decision can be made as to whether to file at the ICA or in Superior Court.
Penalty for "Willful Safety Violations"
For workers injured after 8/13/86 who suffer a permanent disability or death as a result of an employer's willful or repeated violations of Arizona's Occupational Safety and Health Act (OSHA), there is a possible penalty against the employer of up to $25,000 which is paid directly to the injured worker or the worker's dependents. This "penalty" is not part of any workers' compensation payment and is an additional penalty over and above the normal fines against an employer for OSHA violations.
This penalty is handled by the ICA directly. If the ICA imposes such a penalty, it is done as part of its function in handling OSHA violations. There is no procedure set out for a worker to file a claim under this law. The law itself specifically forbids payment of an attorney out of any recovery from this penalty. It is difficult to know how this law is applied by the ICA.
We recommend that if either an injured worker or the worker's dependents believe that the worker has been disabled or killed as a result of the employer's "willful" safety violations, then under this act the worker or worker's dependents should file a complaint with OSHA through the ICA. We also recommend that the worker ask to be informed of the results of the investigation and then follow up with an attorney if represented, or the Ombudsperson if unrepresented.
While no one is sure just how long you have to pursue such a claim, we believe that the written complaint should be filed as soon as possible, but certainly within 1 year from the date the employee knew or should have known that there may have been a "willful" safety violation.
Social Security Disability In General
PERSONS WHO HAVE BEEN UNABLE TO WORK FOR AT LEAST ONE YEAR DUE TO ANY MEDICAL PROBLEM SHOULD CONSIDER APPLYING FOR SOCIAL SECURITY BENEFITS. The first type (called Title II benefits) is paid to workers who are insured and who are disabled. Generally, being insured means that you have enough quarters of coverage. For example, a person who has worked five years out of the last ten years would probably be insured for Title II Social Security Disability benefits. Even if you have not worked yourself, you might be entitled to Title II benefits based on the earnings record of a family member. For example, a person who is disabled before the age of 22 might be able to qualify for disabled adult child's benefits based on the earnings of a deceased parent.
The second type of Social Security benefit is called SSI. Those benefits are paid to a person who is disabled and poor. There is a limit on monthly income and a $3,000 resources maximum for a couple (a $2,000 maximum for an individual) to qualify for these benefits. (Because these amounts change from time to time, you should check with Social Security if you have a claim.)
The definition of disability for both Title II benefits and SSI benefits is the same. It is the inability to perform not only your old job, but also any other job that exists in "significant" numbers in our national economy for a period of one year.
If you believe that you might be entitled to Social Security benefits, please contact your attorney. While you can apply on your own by calling the Social Security Administration at 1-800-772-1213, our law firm is always happy to discuss the procedures of how to apply with persons who are interested in Title II benefits. IF YOU DO NOT FILE WITHIN 18 MONTHS AFTER BECOMING DISABLED, YOU WILL LOSE YOUR RIGHT TO RETROACTIVE BENEFITS FOR EACH MONTH YOU DELAY FILING. SSI benefits are not paid retroactively.
If you have applied for Social Security benefits and have received a notice denying your claim, it is very important to remember that you have only 60 days to protest any denial notice from the Social Security Administration. Because valid claims are frequently denied, you should not assume that the denial of your claim means you are not entitled to those benefits.
Social Security and Workers' Compensation
Contrary to what some people might tell you, you may receive both your workers' compensation benefits and Title II Social Security disability payments at the same time. There is, however, a maximum benefit limitation on Social Security and workers' compensation paid together. While there are other methods to compute the maximum payments for combined benefits, generally you may not draw more than 80% of your highest single calendar year's earnings within the 5 years before you became disabled in a combination of workers' compensation and Social Security disability benefits.
Mr. A became disabled from an on-the-job injury in 1990. He earned $24,000 in 1989 as his highest year's earnings. Mr. A also receives $1,200 a month from workers' compensation before he pays $300 in attorney's fees, so he actually gets only $900 per month. If Mr. A were not receiving workers' compensation, Mr. A and his family would have been eligible to receive $1,000 per month in Social Security disability benefits.
Since Mr. A's highest earnings by using the single year formula is $24,000, the calculation would be $24,000 divided by 12 months equals $2,000 per month (80% of which is $1,600). Therefore, $1,600 is the maximum Mr. A and his family can receive in both Social Security and workers' compensation benefits (after attorney fees). He would then be entitled to $700 per month in Social Security benefits ($1,600 - $900 = $700).
In the above example, if Mr. A did not have an attorney in his workers' compensation case and was receiving $1,200 a month in workers' compensation benefits, his Social Security would be reduced to $400 per month so that he still would only get $1,600 total benefits from both Social Security and workers' compensation. In effect, Mr. A is getting his representation from his attorney in his workers' compensation case "free," since Social Security allows the offset to be computed on the "net" amount Mr. A receives. This is another reason to apply for Social Security benefits since, even if there is a large offset, at least attorney's fees and costs in the workers' compensation case may be applied against that offset.
Other reasons to file for Social Security benefits would include first, the fact that your earnings record will be protected by "freezing" those earnings for the years in which you were disabled to maximize your payments at retirement, and second, to provide for Medicare coverage 24 months after you start receiving Title II payments.
For those on SSI benefits there may in fact be a dollar-for-dollar reduction in benefits for receipt of workers' compensation benefits since those benefits are based strictly on financial need and any "net" monthly income reduces those benefits.
More information on this subject can be obtained from the Social Security office or from this office.
Americans With Disabilities Act (ADA)
There will be no attempt to fully explain this complicated federal legislation. The ADA prohibits discrimination against the disabled in employment, public accommodations, public transportation, government services and telecommunications. It became effective for employers with 25 or more employees on 7/26/92 and for employers of 15 or more on 7/26/94.
To be protected under the ADA, a person must be "disabled" which generally requires a permanent problem with one of what the ADA calls "major life activities," such as walking, seeing, hearing, speaking, sitting, standing, lifting, reaching, breathing, learning or working. It also covers individuals who are perceived to have disabilities or limitations in the above areas.
An employer cannot discriminate against an individual who is "disabled" within the ADA insofar as hiring, advancement or discharge if that individual is otherwise "qualified" for the job and can perform the "essential job functions." If the job requires "reasonable accommodation" to enable that individual to perform the job, the employer must make those accommodations.
The ADA also prohibits "covered employers" from asking questions on job interviews or applications pertaining to "disability" or prior workers' compensation injuries or claims. The employer can ask if you are able to do a job and may provide physical examinations after you are hired to see if you are capable of doing the "essential functions" of that job. If you feel that you are capable of doing a job, and the employer is refusing to consider you for the position because of your disability, or is refusing to make reasonable accommodations so that you can do the job, you should know that several government agencies exist to help you. You can contact the Arizona Civil Rights Division at (520) 628-6500 or the Equal Employment Opportunity Commission at (800) 669-4000.
If a "covered employer" violates the ADA, it can be subject to monetary damages including back pay, attorneys' fees and other damages including compensatory and possibly punitive damages. IF YOU SUSPECT THAT YOU MAY HAVE BEEN DISCRIMINATED AGAINST BECAUSE OF A "DISABILITY," YOU MUST FILE A CLAIM WITH ONE OF THE AGENCIES LISTED ABOVE WITHIN 180 DAYS OF THE VIOLATION.
If you need any further assistance, this office can refer you to an experienced employment attorney.
Family Medical Leave Act (FMLA)
As with the ADA, no attempt will be made to do a comprehensive analysis of this complicated federal legislation that became effective 8/5/93. Our purpose is primarily to make sure you are aware of the FMLA and its possible affect on your workers' compensation claim. The basic purpose of the FMLA is to provide up to 12 weeks of unpaid leave each year for the "serious health condition" of an employee or member of the employee's immediate family or for the birth or adoption of a child.
FMLA covers all public employers, private employers who have 50 or more employees on the payroll (with certain exceptions), or employers who have 50 or more employees working within 75 miles of the work site. It covers only employees who have been employed for at least 12 months and who have worked at least 1,250 hours in the 12 months preceding commencement of the FMLA leave.
The 12-week leave can be taken either all at once or over the year a few hours at a time. It can be taken in conjunction with "sick leave" or paid leave or, if those are unavailable, as "unpaid leave," depending on the employer. No special written notice for the leave is necessary, but as much advance notice as possible should be given. The employer must designate the leave as accruing under the FMLA to start the 12-week period for each year and if they fail to do so, it may entitle the employee to "tack" on additional leave.
Workers who take leave under the FMLA are entitled to 12 weeks of leave per year. If the worker is ready to return to his/her regular job within the 12 weeks, the employer must take him/her back, either to the old job or an "equivalent" job (a job with the same wages, hours of work, and level of responsibility). If the worker is released to regular work on a part-time basis within the 12 weeks, the employer must accommodate that reduced schedule.
In a workers' compensation setting, the FMLA may protect a worker's job for at least 12 weeks and SINCE IN ARIZONA THERE IS NO OTHER PROTECTION, UNLESS THERE IS SOME TYPE OF LABOR CONTRACT, THIS ACT FOR THE FIRST TIME GIVES "COVERED" WORKERS SOME JOB SECURITY IF THEY CAN RETURN TO WORK IN 12 WEEKS. If there is a longer period of disability OR the employer has less than 50 employees, there may be no protection for the disabled worker under this act.
Violation of the FMLA, such as denying leave, firing a worker entitled to leave for "absenteeism" or even discouraging workers from taking leave, can result in payment for lost wages and benefits from the employer and in some cases additional damages for "willful violations." THE EMPLOYEE MAY SUE, BUT MUST FILE THE CLAIM WITHIN 2 YEARS FROM THE DATE OF THE LAST INCIDENT OF VIOLATION OR WITHIN 3 YEARS IF THE VIOLATION WAS WILLFUL.
An agency of the Federal government is authorized to assist workers who feel they may have a problem in this area. The Wage-Hour Division of the United States Department of Labor, 300 W. Congress, Tucson, Arizona 85701-1319, (520) 670-4899 may be of assistance in processing claims.
If you need any further assistance, this office can refer you to an experienced employment attorney.
Other Private Health, Disability and Retirement Benefits
Every injured worker should check with his/her employer or union representative to be sure the worker is receiving all benefits to which the worker may be entitled. Other benefits could include such things as the right to short and long term disability payments and continuing medical care for the injured worker or his or her family ("COBRA" benefits). This pamphlet does not cover private benefit plans.
Property Tax Exemption
Under certain circumstances, based on property value and taxable income limitations, "disabled persons" or widows or widowers may be eligible for an exemption from the payment of property taxes.
Application must be made between January 1 and March 1 of each calendar year at the Office of the Pima County Assessor. For information contact the Office of the Pima County Assessor at (520) 740-8630.