“Sorting Workers' Compensation: Different Disability Classifications and Their Potential Costs,” CLM Magazine
In an article published in the July 2019 issue of CLM Magazine, Trey Dowdey provided insight on workers' compensation claims and how different disabilities and their costs differ depending on the state.
As each state has a separate workers’ compensation system, there are differing laws and methods for determining a temporary or permanent disability and the pertinent benefits. However, despite these differences, there are generally similar methods used nationally with disability classifications and payment of workers' compensation indemnity benefits.
Typically, unless the claim is a medical-only claim where there has been no missed work, the four general classifications of workers' compensation disability benefits paid across the states are temporary partial disability (TPD), temporary total disability (TTD), permanent partial disability (PPD) or permanent and total disability (PTD) benefits. TPD and TTD benefits are meant to provide compensation during periods of temporary disability. PPD benefits, as opposed to PTD benefits or permanent loss of earning capacity (or 100 percent vocational disability), are meant to compensate injured workers with some degree of a permanent impairment, limitation or disability. Permanent disability is evaluated as of their maximum medical improvement date. Maximum medical improvement is often, but not always, the starting point or trigger for stopping TPD or TTD and starting PPD benefits.
Because states have different laws, it is important to have a working understanding of the different methods or disability classifications used to evaluate or award PPD benefits. With permanent injuries to specific body parts, many states use a “schedule” of benefits that delineates a set number of total possible weeks that could be awarded for that body part. PTD benefits generally are geared toward compensating injured workers for the permanent loss of their ability to earn, as defined and addresses by the respective states.
“These various methods of evaluating disability, once understood by the type of method or classification, will help manage expectations as to what claims may be worth in a particular state and provide an explanation as to why similar injuries and claims in a different state may he worth much less or more,” said Dowdey. “Knowing the ground level reality in a certain state will help project costs and lead to more efficient and realistic outcomes.”
For the full article, please click here.