"How to Mitigate Exposure and Close Out a Case for an Incarcerated Employee"

Joanna Hair authored an article for the July 2021 issue of HR News highlighting the complex scenario facing employers when an employee with a workers’ compensation claim gets arrested. When this happens, many of the traditional conventions of handling a claim no longer apply — for example, determining the claimant’s eligibility for wage benefit checks when the employee is unable to keep appointments with the authorized treating physician. While issues that arise when a claimant is incarcerated are case specific, there are many measures employers can take to mitigate exposure and resolve claims.

For one, insurers and employers will need to know when to suspend or reinstate the claimant’s wage benefits. While one may assume benefits can be suspended immediately upon incarceration as the reason they cannot work is because they are in jail, suspending the benefits of a jailed claimant is not always possible and subject to state workers’ compensation law.

Second, work release programs introduce new intricacies that need to be handled. In states where wage benefits can be suspended when a claimant is convicted of or pleads guilty to a jailable offense, there is typically no need to try reducing exposure by using work release because work release is itself a type of sentence. However, employers and insurers will have the ability to use work release income to offset exposure for continuing wage benefits employees in states where benefits are still owed to incarcerated claimants.

Third, settling a claim for an incarcerated employee will lead to unique challenges, including the logistics of communicating with a jailed or imprisoned party and notarizing necessary documents.

For the full article, please click here.