Social Security Disability Issues in Louisiana Workers Compensation

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What is Social Security Disability Insurance? 

Social Security Disability Insurance (SSDI), also known as Social Security Disability (SSD), is insurance through the United States government in case an individual becomes disabled.

Social Security Disability Insurance (SSDI) is available for workers who have paid into the Social Security trust fund through Social Security taxes on their earnings, as well as for certain dependents of disabled workers who have paid into the Social Security trust fund.

Generally speaking, the definition of a disability is a condition where an individual is unable to engage in any substantial gainful activity because of a physical or mental impairment, where is this impairment is demonstrated by medical evidence (such as objective findings by a medical provider, symptoms, laboratory findings, and subjective complaints by the individual).

A person can qualify for Social Security Disability if he or she becomes disabled under the age of 65 or is a qualified family member of a worker who becomes disabled under age 65.

Social Security Disability payments are for disabilities that have lasted or are expected to last for at least 12 months straight or are expected to result in the death of the disabled individual.

In other words, Social Security Disability payments are intended for long-term or permanent conditions, not for temporary conditions (such as where the disabled individual is expected to quickly recover and return to full-duty work).

The amount of a Social Security Disability payment is based on several factors, including:

    1. The amount that the disabled individual earned while that individual was able to work;
    2. Whether or not the disabled individual is still able to work at a reduced capacity;
    3. The number of dependents that the disabled individual has; and
    4. The total household income of the disabled individual.

Once an individual qualifies for Social Security Disability, the actual disability payments will not begin until five months after the date of the onset of the disability.

However, once an individual qualifies for Social Security Disability, that individual will begin receiving health insurance through Medicare beginning 24 months after the five-month waiting period.

Qualifying for Social Security Disability Insurance

Generally, a disabled individual can qualify for Social Security Disability benefits if:
    1. The disabled individual is unable to work for at least a year or more because of a physical or mental disability;
    2. The disabled individual is unable to do the same work that the individual previously performed before the disability;
    3. The disabled individual is unable to do other types of work as a result of the individual's medical condition or conditions; and
    4. The disabled individual previously worked in jobs that were covered by Social Security (for example, cash jobs, self-employment, and some other types of work are not covered by Social Security). 

So one essential qualification regarding Social Security Disability benefits is that a disabled individual must show that his or her medical condition will prevent that individual from working for at least twelve months.

But at the same time, even though the individual must prove to the Social Security Administration the extent and duration of his or her medical condition, a disabled individual does not need to prove that he or she is “permanently" disabled.

Additionally, Social Security Disability benefits are never paid to someone who is partially disabled and are never paid on a percentage basis, because an individual must be totally disabled to receive Social Security Disability benefits.

However, the determination of the Social Security Administration as to whether an individual is partly disabled or totally disabled may be different from the individual's treating physician and may also be different from a determination in Louisiana workers compensation.

Supplemental Security Income (SSI) Benefits

Social Security Disability benefits are for individuals who have contributed to the Social Security system through payroll deductions or self-employment taxes and have earned enough "quarters of coverage" or "credits of coverage" to meet the minimum requirements.

"Quarters of coverage" or "credits of coverage are based upon an individual's annual earnings, and an individual can earn up to four credits each year. 

However, if an individual does not qualify for Social Security Disability Insurance (SSDI) benefits, this individual may qualify for Supplemental Security Income (SSI), which has the same medical qualification as SSDI but much different income and asset requirements.

Supplemental Security Income (SSI) provides benefits for disabled individuals who have very little or no income and own very few assets.

Also, a spouse or child of a recipient of Supplemental Security Income (SSI) benefits will not receive Supplemental Security Income (SSI) benefits unless this spouse or child is also disabled. 

Applying for Social Security Disability Insurance

An individual should apply for Social Security Disability Insurance (SSDI) benefits as soon as he or she becomes disabled because waiting until he or she has been out of work for a year can cause that person to lose SSDI benefits and waiting too long can even cause disqualification.

At any rate, an individual can apply for Social Security Disability Insurance (SSDI) benefits (and Supplemental Security Income (SSI) benefits) online or at a local Social Security office.

Once an application is completed, the Social Security Administration (SSA) will review the application and require additional information, such as medical records and a disability evaluation from a Social Security Administration physician.

However, most folks who apply for Social Security Disability Insurance (SSDI) benefits are initially denied.

Typical reasons why an applicant is denied Social Security Disability Insurance (SSDI) benefits include:

    1. The applicant already earns enough money that the SSA does not consider the applicant to be disabled;
    2. The applicant's disability is determined by the SSA to be a short-term disability;
    3. The applicant's disability is determined by the SSA to last less than a year;
    4. The applicant's disability is related to a drug or alcohol addiction;
    5. The applicant has committed fraud on his or her SSDI application;
    6. The applicant has been convicted of a crime;
    7. The applicant is unable to be contacted; and
    8. The applicant has refused to follow the treatment instruction prescribed by a treating physician (such as medication, physical therapy, or surgical procedures).

However, an applicant can appeal a denial of a Social Security Disability (SSDI) claim.

An appeal can be filed online, but it can be difficult to successfully show on an online appeal that an applicant is disabled and unable to work and earn a living.

If an applicant for Social Security Disability Insurance (SSDI) benefits is denied at both an initial application and a reconsideration application, then this applicant will likely need to appear at a disability hearing to further pursue SSDI benefits.

How Social Security Disability Works with Louisiana Workers Compensation

Under Louisiana workers compensation law and United States federal Social Security law, an injured worker in Louisiana can receive both Louisiana workers compensation lost wage benefits and Social Security Disability Insurance (SSDI) benefits at the same time.

However, when an injured worker in Louisiana is receiving both Louisiana workers compensation lost wage benefits and Social Security Disability Insurance (SSDI) benefits at the same time, this injured worker in Louisiana can not receive a total combined benefit of more than 80% of the gross income that this worker was earning before he or she became disabled.   

So when an injured employee is receiving Louisiana workers compensation lost wage benefits, this employee's social security benefits may be reduced - or "offset" - so that the combined benefits do not exceed 80% of the employee's "average current wage" as calculated by the Social Security Administration (SSA).

But also, the workers compensation insurance company can request that the Louisiana workers compensation Court reverse this offset - in other words, claim a social security "reverse-offset" - if the OWC Court concludes that the injured worker is entitled to Permanently Total Disability (PTD) benefits. 

To make matters even more complex, it must be understood that Louisiana workers compensation and the Social Security Administration (SSA) calculate the amount of income that the injured employee was earning before his or her disability in much different ways.

Specifically, Louisiana workers compensation law calculates the amount of income that the injured employee was earning before his or her disability as the employee's "average weekly wage," which is typically two-thirds of a weekly wage (subject to a minimum and a maximum cap) for the last four full weeks before the employee's accident.

But the Social Security Administration (SSA) calculates the amount of income that the injured employee was earning before his or her disability as the injured worker's "average current wage," which is the largest amount under the following three options:

    1. The average lifetime earnings of the injured employee;
    2. The average earnings during the five years before the injured employee became disabled; and
    3. The average earnings during the one year before the injured employee became disabled.

Additionally, Social Security Disability Insurance (SSDI) benefits can NOT be reduced due to the receipt of social security old-age retirement benefits.

Finally, the workers compensation insurance company is entitled to a credit for the amount that the total benefits (workers compensation benefits plus employer-funded disability benefits or other workers compensation lost wage benefits) exceed two-thirds of the injured worker's Average Weekly Wage.

However, if the injured worker's compensation rate is less than the maximum compensation rate, this credit will be in the amount of the employer-funded disability benefits or other workers compensation lost wage benefits. 

And, if the injured worker's compensation rate is the maximum compensation rate, this credit will be less than the amount of the employer-funded disability benefits or other workers compensation lost wage benefits. 

Proof of Total Disability in Louisiana Workers Compensation

When an injured employee is determined to permanently and totally disabled in Louisiana, this employee is entitled to Permanent Total Disability (PTD) benefits under Louisiana workers compensation.

Basically, to receive Permanent Total Disability (PTD) benefits, a Louisiana workers compensation Judge must rule that the employee has no earning capacity at all due to his or her disability, and will not be able to earn wages in any occupation.

This Louisiana workers compensation Judge will examine all the facts of the claim to decide on Permanent Total Disability (PTD) benefits, including the severity of the employee's medical conditions, and the employee's age, work experience, and education.

Very often, an injured worker who is attempting to prove that he or she is entitled to receive Permanent Total Disability (PTD) benefits is already receiving Social Security Disability Insurance (SSDI) benefits, which means that the Social Security Administration (SSA)  has already determined that the injured worker is permanently and totally disabled.

However, a determination by the Social Security Administration (SSA) that the injured worker is permanently and totally disabled is NOT binding on the Louisiana workers compensation Judge who is deciding whether to award on Permanent Total Disability (PTD) benefits.

In other words, just because the Social Security Administration (SSA) has ruled that the injured worker is permanently and totally disabled, that does NOT necessarily mean that this employee is entitled to Permanent Total Disability (PTD) benefits under Louisiana workers compensation.

The Louisiana workers compensation Judge may rely on the Social Security Administration's decision for evidence of an employee's disability, but the Judge is NOT required to follow the Social Security Administration's determination and reach the same conclusion.

This is because the Social Security Administration utilizes different standards for assessing permanent and total disability than the standards that are used under Louisiana workers compensation.

The Social Security Administration uses a multi-step test called the “sequential evaluation process” to determine if a worker suffers from such a severe impairment, which will last more than one year or be fatal and prevent that worker from earning any wages whatsoever. 

The Louisiana workers compensation Judge, on the other hand, will apply a fact-based inquiry to determine whether the injured employee can prove by clear and convincing evidence, unaided by any presumption of disability, that the employee is physically unable to engage in any employment or self-employment, regardless of the nature or character of the employment or self-employment, including, but not limited to, any and all odd-lot employment, sheltered employment, or employment while working in any pain, notwithstanding the location or availability of any such employment or self-employment.

Nonetheless, even though Social Security disability determinations are not binding on Louisiana workers compensation Judges, these determinations are still relevant and should not be disregarded by Louisiana workers compensation Judges.

In fact, a Social Security disability determination may possess helpful information concerning job history and other vocational issues that are relevant to prove Permanent Total Disability (PTD) under Louisiana workers compensation.

The Social Security Disability "Offset" in Louisiana Workers Compensation

As stated above, when an injured worker in Louisiana is receiving both Louisiana workers compensation lost wage benefits and Social Security Disability Insurance (SSDI) benefits at the same time, this injured worker in Louisiana can not receive a total combined benefit of more than 80% of the gross income that this worker was earning before he or she became disabled.   

The reasoning behind this rule is that the injured employee should not receive more money through the combination of workers compensation benefits and SSDI benefits than the employee was earning before the employee's disability arose. 

So, for this reason, when an injured employee is receiving Louisiana workers compensation lost wage benefits, this employee's social security benefits may be reduced - or "offset" - so that the combined benefits do not exceed 80% of the employee's "average current wage" as calculated by the Social Security Administration (SSA).

The Social Security Administration (SSA) calculates the amount of income that the injured employee was earning before his or her disability as the injured worker's "average current wage," which is the largest amount under the following three options:

    1. The average lifetime earnings of the injured employee;
    2. The average earnings during the five years before the injured employee became disabled; and
    3. The average earnings during the one year before the injured employee became disabled.

But the maximum total amount of combined benefits that an injured worker is allowed to receive is also limited by the total amount of Social Security Disability Insurance (SSDI) benefits received by all of the members of the injured worker's family in the first month that workers compensation is received (otherwise known as the “Total Family Benefit”).

    1. The simplified version of the method for calculating a Social Security Offset is as follows:
    2. The Social Security Administration first calculates the injured employee's average current earnings for the period before the employee became disabled;
    3. The Social Security Administration then calculates the monthly average of the injured employee's average current earnings;
    4. The Social Security Administration then determines how much the injured employee is receiving each month in workers compensation and Social Security Disability Insurance (SSDI) benefits;
    5. The Social Security Administration then determines if the combined income exceeds 80% of the average monthly earnings; and
    6. If the combined benefits do exceed 80% of the employee's average monthly earnings, then the Social Security Administration will reduce the Social Security Disability Insurance (SSDI) benefits by the amount above the 80%.

Additional requirements concerning the Social Security Disability Offset include the following:

    1. The Social Security Disability Offset is only available when the injured worker is receiving Permanent Total Disability (PTD) benefits or Permanent Partial Disability (PPD) benefits
    2. The amount of the Social Security Disability Offset can be re-calculated by the Social Security Administration every three years, which often reduces the amount of the offset;
    3. The Social Security Disability Offset is NOT available when the injured worker is receiving Supplemental Earnings Benefits (SEBs) or Temporary Total Disability (TTD) benefits;
    4. The Social Security Disability Offset is NOT available for disabilities that arose before September 8, 1978;
    5. The Social Security Disability Offset is NOT available for the receipt of social security old-age retirement benefits;
    6. The Social Security Disability Offset is NOT reduced by any amount of attorney's fees that the worker owes to his or her attorney; and  
    7. The Social Security Disability Offset can NOT reduce below the amount to which the employee's total benefits to an amount that is lower than the injured employee's weekly workers compensation rate.

Calculations for a Social Security Disability "Offset"

So for example, let's say an injured employee had a monthly average current wage before the disability of $3,000, and the employee is set to receive $1,800 each month in workers compensation benefits and $2,200 each month in SSDI benefits.

Since eighty percent of the monthly average current wage of $3,000 equals $2,400, and the combined total of monthly workers compensation benefits and SSDI benefits equals $3,000, which exceeds the 80% average current wage by $600, the SSDI benefit would, therefore, need to be reduced (or "offset") by $600, meaning the actual monthly SSDI benefit would only be $1,600.

Another example of a Social Security Disability Offset, this time involving Total Family Benefits, is as follows:

    • Total Family Benefits (TFBs)  =  $ 1,000
    • 80% OF Average Current Earnings  =  $ 2,000
    • Monthly Workers Compensation Benefits (MWCBs)  =  $1,500
    • TFBs + MWCBs ($1000 + $1,500)  =  $2,500
    • Offset Per Month ($2,500 - $2,000)  =  $ 500
    • Weekly Offset ($500 x 12 - 52)  =  $ 115.38

Again, the Social Security Disability Offset is determined by adding the Total Family Benefits ("TFBs") received from social security (before any offset has been taken) and the employee's monthly workers compensation benefits, and then subtracting from the result either the Total Family Benefits or 80% of the average current earnings (calculated by social security), whichever is greater.

Procedures for Obtaining a Social Security Disability Offset

Concerning the procedure for obtaining a Social Security Disability Offset, the workers compensation insurance company must petition the workers compensation Court to request a Social Security Disability Offset; it cannot unilaterally take the Social Security Disability Offset.

To determine information concerning the receipt of Social Security benefits by the injured employee and the amounts received by the injured employee, the workers compensation insurance company must file an OWC Form 1004, Request for Social Security Benefits Information, with the Louisiana Office of Workers Compensation; this OWC Form 1004 will subsequently be executed by an official designated by the Social Security Administration (SSA).

To petition the workers compensation Court for a Social Security Disability Offset in connection with a claim that is NOT in dispute, the workers compensation insurance company must file an OWC Form 1005(A), Motion for Recognition of Right to Social Security Offset, with the appropriate OWC district office.

To petition the workers compensation Court for a Social Security Disability Offset in connection with a claim that IS in dispute, the workers compensation insurance company must file an OWC Form 1008, Disputed Claim for Compensation, and the following requirements must be met:

    • An order shall be issued recognizing the entitlement to the offset for social security benefits from the date of judicial demand, and setting the amount of the offset after a determination of the character of the disability, the right to the offset, and calculation of the offset.
    • A contradictory hearing properly noticed by the court may be set by the judge for this determination.
    • Notice shall be provided to the claimant or his representative before the issuance of the order.
    • The order shall be served by certified mail upon all parties and the Social Security Administration.
    • Such offsets may be taken upon receipt of proof of service of the order upon the Social Security Administration by the Office of Workers' Compensation Administration.

Whether or not a claim that is in dispute, the workers compensation insurance company who has obtained an OWC Judgment recognizing its right to take the Reverse Offset cannot assert the offset until Social Security has been notified and has removed the Social Security Disability Offset. 

Tax Concerns for Social Security Disability Offsets

Generally speaking, Louisiana workers compensation benefits are not taxable income and are not declared to the IRS. 

However, Social Security Disability Insurance (SSDI) benefits might be taxable, depending on:

    1. The filing status of the individual;
    2. The total amount of benefits received by the individual; and
    3. Other income received by the individual.

And, importantly, when there is an overlap between Social Security Disability Insurance (SSDI) and Louisiana workers compensation lost wage benefits that result in a Social Security Disability Offset, the Internal Revenue Service will treat workers compensation lost wage benefits as taxable income. 

So, unfortunately, this is a rare scenario where Louisiana workers compensation benefits can be treated as taxable income and have a potential tax liability.  

Thus, an injured employee who has received both workers compensation lost wage benefits and Social Security Disability Insurance (SSDI) benefits that are subject to a Social Security Offset should work with a certified public accountant to determine how the IRS will treat this income. 

A certified public accountant can properly calculate an injured employee's tax liability because, again, the employee's tax liability depends not just on the workers compensation lost wage benefits and the Social Security Offset, but also on other factors such as the employee's filing status, total amount of received benefits, and other income received by the injured employee.

The Social Security "Reverse-Offset" in Louisiana Workers Compensation

As stated above, when an injured worker in Louisiana is receiving both Louisiana workers compensation lost wage benefits and Social Security Disability Insurance (SSDI) benefits at the same time, this injured worker in Louisiana can not receive a total combined benefit of more than 80% of the gross income that this worker was earning before he or she became disabled.   

So, for this reason, when an injured employee is receiving Louisiana workers compensation lost wage benefits, this employee's social security benefits may be reduced - or "offset" - so that the combined benefits do not exceed 80% of the employee's "average current wage" as calculated by the Social Security Administration (SSA).

But, the workers compensation insurance company can request that the Louisiana workers compensation Court reverse this offset - in other words, claim a social security "reverse-offset" - if the OWC Court concludes that the injured worker is entitled to Permanently Total Disability (PTD) benefits. 

So, in all cases where benefits are converted to permanent and total disability benefits, the workers compensation insurance company is entitled to a reverse-offset, lowering what would otherwise be the workers' compensation indemnity payment.

In other words, a social security "reverse-offset" allows the workers compensation insurance company to reduce its lost wage benefits by the excess amount above the 80% of the employee's "average current wage" instead of allowing the Social Security Administration (SSA) to reduce the Social Security Disability Insurance (SSDI) benefits by that amount.

This social security "reverse-offset" exists in Louisiana workers compensation because Louisiana law has decided to give the workers compensation insurance company, rather than the federal government, the benefit of the ceiling placed on both programs by the coordination of benefits. 

Settlements and "Spread" Language in Louisiana Workers Compensation

A Social Security Offset can have a tremendous impact on the settlement of a workers compensation claim in Louisiana, because receipt of a large lump sum settlement can potentially cause a drastic reduction of an employee's monthly SSDI benefits, and might even completely eliminate these monthly SSDI benefits.

Again, this is because an injured worker in Louisiana can not receive a total combined benefit of more than 80% of the gross income that this worker was earning before he or she became disabled.    

However, fortunately, specialized "spread" language can be placed into a written settlement agreement that can minimizes or even eliminate the offset altogether.

This "spread" language can minimize or eliminate the Social Security Offset by "spreading" the monthly value of the lump sum settlement over the employee's life span through a formula approved by the Social Security Administration (SSA).

It is this average monthly benefit - the prorated monthly value of the lump sum settlement over the employee's life span - that is then used to calculate any Social Security Offset.

In other words, any potential negative impact of a Social Security Offset can be minimized or eliminated by "spreading" the value of the lump sum settlement over time.

Spread language in a written settlement agreement usually looks something like this:

    • "Of the $150,000.00 settlement, $30,000 shall be paid as attorney's fees to the attorney for the employee. The $120,000.00 to be paid to the employe, shall be calculated without commutation of interest, but shall represent the negotiated compromise Agreement that the claimant's life expectancy is 22.45 years forward from this date, pursuant to the Annuity Mortality Table for 1949 Ultimate, as established by O.C.G.A. §24-4-45, Appendix, Title 24, and that the settlement herein reached represents the payment of $110.28 per week to the claimant over the balance of the 969.44-week life expectancy of the claimant into the future."

Again, this "spread" language is used to prevent reduction or elimination of Social Security Disability (SSDI) benefits due to the Social Security Offset rule (which provides social security disability benefits will be reduced so that no combination of workers compensation benefits and social security disability benefits can exceed 80% of pre-injury earnings) by projecting the portion of lump-sum disability settlement proceeds over the worker's remaining life expectancy. 

Social Security Disability and Medicare in Louisiana Workers Compensation

Once an individual has received 24 months of Social Security Disability Insurance (SSDI) benefits, he or she automatically qualifies for Medicare. 

Medicare is a federal program that provides health coverage for certain individuals who are retired or who have become disabled.

Medicare became intertwined with Louisiana workers compensation in 1981 with the passage of the Medicare Secondary Payer Act (MSPA), which makes Medicare a “secondary payer” in place of third-party obligors (such as workers compensation insurance companies) who are considered “primary payers” under the MSPA.

Critically,  in Louisiana workers' compensation, the Medicare Secondary Payer Act (MSPA) prevents cost-shifting from the workers compensation insurance company (who is obligated to pay for medical treatment of the injured worker) to Medicare, which is good public policy since Medicare is funded by taxpayers.

In addition to the MSPA, the Center for Medicare Services (CMS) is authorized by Congress to set forth federal regulations concerning Medicare's rights with respect to workers compensation claims.

Medicare has the two following significant rights under the Medicare Secondary Payer Act (MSPA):

    1. To recover “conditional payments” from the primary payer (such as workers compensation insurance company), which means that if medical treatment is paid for by Medicare, but should be paid by the workers compensation insurance company, then Medicare has the right to recover its payments from the workers compensation insurance company; and
    2. To ensure that the primary payer (such as the workers compensation insurance company) adequately funds the employee's future medical costs in a workers compensation settlement.

So basically, the main point of the Medicare Secondary Payer Act (MSPA) is to “protect Medicare's interest,” which is important because Medicare (and thus the taxpayers) should not have to pay the medical expenses for a work-related injury that are otherwise owed by the workers compensation insurance company.

In short, Medicare will not allow the injured worker to simply settle his or her workers compensation claim, pocket all the money for the future medical expenses, and then have Medicare pay for all the future medical expenses.

To avoid such a scenario, Medicare requires that the workers compensation insurance company "set-aside" a portion of that settlement money so that it can be used for future medical expenses, thereby preventing Medicare from having to pay for those future medical expenses.

This process of "setting-aside" a portion of that settlement money is known as a "Medicare Set-Aside Arrangement" or an "MSA" for short.

In some circumstances, determining whether Medicare's interest is protected includes the Center for Medicare Services (CMS) reviewing the settlement for approval.

Medicare Set-Aside Arrangements (MSAs)

In Louisiana workers compensation, a Medicare Set-Aside Arrangement (MSA) is a financial agreement that allocates a portion of a workers' compensation settlement to pay for future medical services related to the workers compensation injury, illness, or disease.

These funds that are "set-aside" in an MSA must be depleted before Medicare will pay for medical treatment related to the workers compensation injury, illness, or disease.

The Center for Medicare Services (CMS), which sets forth federal regulations concerning Medicare's rights with respect to workers compensation claims, states that all parties in a workers' compensation case have “significant responsibilities” to protect Medicare's interests when resolving cases that include future medical expenses.

While there are no laws requiring that an MSA be submitted to CMS for review, the recommended method to protect Medicare's interests is an MSA.

If any party chooses to submit an MSA for review, CMS requests that the party complies with its established policies and procedures.

CMS will only review new MSA proposals when one of the following conditions is met:

    1. The claimant is a Medicare beneficiary, and the total settlement amount is greater than $25,000.00; or
    2. The claimant has a reasonable expectation of Medicare enrollment within 30 months of the settlement date, and the anticipated total settlement amount for future medical expenses and disability/lost wages over the life or duration of the settlement agreement is expected to be greater than $250,000.00.

The amount of each MSA is determined on a case-by-case basis. 

Medicare's Rights in Workers Compensation Claims

Medicare has two main rights under the Medicare Secondary Payer Act (MSPA) and Louisiana workers compensation law:

    1. To recover “conditional payments” from the workers compensation insurance company (which is backward-looking); and
    2. To ensure that the workers compensation insurance company adequately funds the employee's future medical costs in a settlement (which is forward-looking).

Concerning the first backward-looking right, this right to recover “conditional payments” from the workers compensation insurance company is the equivalent of a lien.

That is, if medical treatment that is otherwise owed by workers compensation is paid by Medicare, then Medicare has the right to recover its payments from the workers compensation insurance company.

This backward-looking right to recover “conditional payments” is not contingent on there being any workers compensation settlement; Medicare's right to recoup conditional payments exists regardless of whether a workers compensation settlement is ever reached.

So if the workers compensation insurance company has received a conditional payments letter from CMS, those conditional payments must be reimbursed to CMS regardless of whether the employee ever settles his or her claim.

Concerning the second forward-looking right to ensure that the workers compensation insurance company adequately funds the employee's future medical costs in a settlement, this second right of Medicare is linked specifically to a workers compensation settlement.

This second forward-looking right fulfills the main purpose of the Medicare Secondary Payer Act (MSPA) by ensuring the protection of “Medicare's interests” and preventing cost-shifting from the workers compensation insurance company (who is obligated to pay for medical treatment of the injured worker) to Medicare, which is good public policy since Medicare is funded by taxpayers.

Medicare should not assume the responsibility of paying the medical expenses for a work injury that is otherwise owed by the workers compensation insurance company.

So in order to ensure that Medicare will not have to begin paying for treatment upon settlement of the employee's claim, the proceeds must include an amount of money sufficient to cover the employee's future medical costs.

If the settlement is adequately funded, then Medicare's interest is protected as contemplated by the Medicare Secondary Payer Act (MSPA).

The Louisiana Statute for Social Security Disability Insurance and Louisiana Workers Compensation

The primary Louisiana statute regarding Social Security Disability (SSDI) benefits in Louisiana workers compensation is La. R.S. 23:1225, which reads as follows:

§1225.  Reductions when other benefits payable

A.  The benefits provided for in this Subpart for injuries producing permanent total disability shall be reduced when the person receiving benefits under this Chapter is entitled to and receiving benefits under 42 U.S.C. Chapter 7, Subchapter II, entitled Federal Old Age, Survivors, and Disability Insurance Benefits, on the basis of the wages and self-employment income of an individual entitled to and receiving benefits under 42 U.S.C. §423; provided that this reduction shall be made only to the extent that the amount of the combined federal and workers' compensation benefits would otherwise cause or result in a reduction of the benefits payable under the Federal Old-Age, Survivors, and Disability Insurance Act pursuant to 42 U.S.C. §424a, and in no event will the benefits provided in this Subpart, together with those provided under the federal law, exceed those that would have been payable had the benefits provided under the federal law been subject to reduction under 42 U.S.C. §424a.  However, there shall be no reduction in benefits provided under this Section for the cost-of-living increases granted under federal law after the date of the employee's injury.

B.  No compensation benefits shall be payable for temporary or permanent total disability or supplemental earnings benefits under this Chapter for any week in which the employee has received or is receiving unemployment compensation benefits.

C.(1)  If an employee receives remuneration from:

(a)  Benefits under the Louisiana Workers' Compensation Law.

(b)  Repealed by Acts 2003, No. 616, §1.

(c)  Benefits under disability benefit plans in the proportion funded by an employer.

(d)  Any other workers' compensation benefits, then compensation benefits under this Chapter shall be reduced, unless there is an agreement to the contrary between the employee and the employer liable for payment of the workers' compensation benefit so that the aggregate remuneration from Subparagraphs (a) through (d) of this Paragraph shall not exceed sixty-six and two-thirds percent of his average weekly wage.

(2)  Notwithstanding the provisions of Paragraph (1) of this Subsection, benefits payable for injury to an employee under this Chapter shall not be reduced by the receipt of benefits under this Chapter or any other laws for injury or death sustained by another person.

(3)  If an employee is receiving both workers' compensation benefits and disability benefits subject to a plan providing for reduction of disability benefits, the reduction of workers' compensation benefits required by Paragraph (1) of this Subsection shall be made by taking into account the full amount of employer-funded disability benefits, pursuant to plan provisions, before any reduction of disability benefits are made.

(4)  If a conflict arises between the application of the provisions of this Section and those of any other Louisiana law or contract of insurance, the provisions of this Section shall control.

D.  Repealed by Acts 2004, No. 561, §1.

Added by Acts 1978, No. 750, §1; Acts 1983, 1st Ex. Sess., No. 1, §1, eff. July 1, 1983; Acts 1985, No. 926, §1, eff. Jan. 1, 1986; Acts 1989, No. 454, §§6, 10, eff. Jan. 1, 1990; Acts 1991, No. 469, §1; Acts 1993, No. 928, §2, eff. June 25, 1993; Acts 1995, No. 1284, §2; Acts 2003, No. 616, §1; Acts 2004, No. 561, §1.

Putting Our Clients First

Our clients always come first. Putting our clients first means we always offer free consultations, and free off-street parking, just one block off the highway in New Orleans. Putting our clients first also means we have a strict 24-hour communications policy, wherein our clients’ phone calls are always returned within 24 hours, if not sooner. That also means that our clients never have an issue getting through to their attorney, whether on the phone or in person.

A Proven Track Record of Success

We have successfully recovered millions of dollars in settlements for our clients in personal injury claims, auto accidents, and insurance claims. The reason that our opponents settle our clients’ cases for full value is because they know we prepare all our clients’ cases for trial from the start. In fact, we are known for not being afraid to take cases to trial, and thus our opponents know they are in for a fight when going against our clients.

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