When Lost Wage (Indemnity) Benefits Should Start in Louisiana Workers Compensation
In most cases, an injured employee's Louisiana workers compensation indemnity (lost wage) benefits should be paid no later than fourteen (14) days after the employer or its insurance company is notified of the employee's injury.
This 14 day rule applies to both Temporary Total Disability Benefits (TTD), Permanent Total Disability Benefits (PTD), and Supplemental Earnings Benefits (SEBs).
To receive Supplemental Earnings Benefits (SEBs), the employee must file a Form 1020 with the employer or the workers compensation insurance company each month to report any income that the employee earned or other benefits received. Again, Supplemental Earnings Benefits payments are due fourteen days after the employer or the insurer receives this Form 1020.
But again, all these types of indemnity benefits should start being paid by the fourteenth day - or 2 weeks - after the employer or insurer finds out about the employee's injury.
Once the indemnity benefits begin, the injured employee should regularly receive indemnity checks until he or she can return to some type of work.
If the employee's lost wage benefits are delayed, the employee can file a claim with the Louisiana Office of Workers' Compensation and request that the insurance company pay penalties and attorneys fees in addition to the reinstatement of regular indemnity benefits.
When The First Week of Lost Wage (Indemnity) Benefits Will Be Paid in Louisiana Workers Compensation
Louisiana law holds that no compensation shall be paid for the first week after the injury is received, unless the employee's disability continues for two weeks or longer after date of the accident.
So, in other words, the employee must be out two weeks before recovering lost wage benefits for the first week the employee missed.
The intent of this rule was likely to attempt to minimize trivial claims for disability of less than a week's duration.
Either way, the injured worker will not receive a check for his or her first week of wage loss benefits unless the employee has missed a full two weeks or more of work.
Once the employee is out for two weeks, then at the two-week mark, the check for the first week of lost wages should be promptly paid by the workers compensation insurance company.
Why Lost Wage (Indemnity) Benefits May Be Delayed in Louisiana Workers Compensation
The first payment of an injured employee's indemnity benefits is regularly and wrongly delayed.
In fact, a primary tactic of most workers compensation insurers is to delay, delay, delay.
Typical reasons for delay include the following:
- The employer never reported the injury to its workers compensation insurer. Once the employer is notified of the injured employee's injury, the employer has 10 days to notify its workers compensation insurance company. In fact, the employer must file a form called the First Report of Injury or Illness with the insurance company within 10 days. If the employer is self-insured, it must file the First Report of Injury or Illness with the Office of Workers Compensation. Failure of the employer to notify the insurer or file a First Report of Injury or Illness will delay the employee's benefits.
- The employer did not report the injury to the workers compensation insurer within the proper time limit. Failure of the employer to notify the insurer or file a First Report of Injury or Illness within 10 days will delay the employee's benefits. However, it is not a valid excuse for a delayed payment.
- The employer does not have the required workers compensation insurance. Despite the fact that all employers are required to have workers compensation insurance or be self-insured, some employers either let their coverage lapse, have improper coverage, or even just outright ignore their legal responsibilities and requirements. If the employer does not have workers compensation insurance, it can and should be sued directly, not only for the workers comp benefits which the employee is typically entitled, but also for the penalties and attorneys fees due to the fact that it failed to maintain the required workers compensation insurance. Typically, if the employer does not have the proper insurance, then it does not understand the proper way to handle a claim, including when and how payments must begin.
- The workers compensation insurer's claim file got misplaced or forgotten. Workers compensation insurance companies often claim that they lost a file, or misplaced claim file, or forgot about it. Whether these excuses are true or not is irrelevant. Again, indemnity benefits should be paid no later than the fourteenth day after the employer or their insurance company is notified of the employee's injury.
- The workers compensation insurer is still processing the claim. Workers compensation insurance companies love to remark that they are "processing" an injured employee's claim. But again, this is no excuse. Lost wage benefits should be paid no later than the fourteenth day after the employer or their insurance company is notified of the employee's injury.
- The workers compensation insurer is conducting an investigation of the claim. The workers compensation insurance company often claim that it has not issued a payment due to the fact that it is "investigating" the claim of an injured employee. Typically, this means witness statements, medical records, and employment records. Like its explanation of claim "processing," this is not a valid excuse. The insurer can investigate all it wants, but it must issue the payment within 14 days of notification unless there is a valid reason otherwise.
- The workers compensation insurer denied the claim, but the employee was not notified about the denial. Sometimes, an injured employee is simply not notified of a claim denial. This is typically the fault of the insurer. However, such an error is important, and must be handled appropriately by the employee or the employee's legal representative, since the employee will want to maintain all legal rights to file an appeal of a claim denial.
- The employee missed the deadline for filing a claim. Under Louisiana law, the employee must report his or her injury to the employer within 30 days. Though in practice, a good attorney can get around this deadline, an employee should report the injury right away. Otherwise, the insurer will likely delay or deny the claim, especially if it was reported over 30 days after the injury. Also, at the time the injury is reported to the employer, the employee should request from the employer some written proof that the injury was in fact reported, such as a written accident report or injury report or simply an email.
- The employee failed to file an Employee's Monthly Report of Earnings. When an injured worker in Louisiana is entitled to Supplemental Earnings Benefits (SEBs), the worker must file every month a Form 1020 - Employee's Monthly Report of Earnings. The purpose of this Form 1020 is to report to the insurance company whether the employee had income during the month, so that the insurer can reduce indemnity by that amount. The insurance company will typically delay any indemnity payments until it receives a completed Form 1020 each month.
Penalties and Attorneys Fees for Lost Wage (Indemnity) Benefits
If an injured employee's benefits are delayed, the employee may file a claim with the Office of Workers Compensation.
The claim is initiated by filing a Form 1008 - Disputed Claim for Compensation.
Within this Disputed Claim for Compensation, the injured employee may request penalties and attorneys fees in addition to the regular workers compensation benefits.
Under Louisiana law, the employer or the workers compensation insurer will not owe penalties and attorneys fees "if the claim is reasonably controverted or if such nonpayment results from conditions over which the employer or insurer had no control."
Does the Insurance Company Have A Valid Reason for Its Denial of Benefits?
Additionally, if the employer or the workers compensation insurance company stops paying the indemnity benefits without a valid reason, then the injured employee may be entitled to penalties and attorneys fees in addition to the reinstatement of the regular workers compensation benefits.
Specifically, according to Louisiana law, "Any employer or insurer who at any time discontinues payment of claims due and arising under this Chapter, when such discontinuance is found to be arbitrary, capricious, or without probable cause, shall be subject to the payment of a penalty not to exceed eight thousand dollars and a reasonable attorney fee for the prosecution and collection of such claims."
The critical determining factor here as to whether penalties and attorneys fees are appropriate, is whether the insurance company's actions were "arbitrary, capricious and without probable cause."
In other words, did the insurance company have a good reason to deny the payments? All too often, the answer is NO.
When to Get an Attorney for a Louisiana Workers Compensation Lost Wage (Indemnity) Claim
Sadly, most injured employees wait too long before hiring an attorney.
It is never a good idea for an injured employee to wait until he or she "needs" an attorney, as by that time, the employee's rights have likely already been reduced, and the employee's claim value already diminished.
During the time before an employee hires an attorney, the insurance company is likely devaluing the employee's claim, and on the road to denial by stripping away the rights of the injured employee.
For example, besides simply delaying an employee's claim, the insurance company will:
- Send the employee to the doctor of its choice, not of the employee's choice, which can produce medical records that can drastically limit or eliminate the claim.
- Unfairly limit or deny appropriate medical care, often causing permanent negative health and legal effects.
- Improperly calculate the amount of indemnity payments due the employee.
- Wrongly force or pressure the employee to return to work, which will eliminate indemnity payments and limit medical care going forward.
- Insist upon inappropriate vocational rehabilitation, which can irreversibly eliminate indemnity payments to the employee.
- Pressure an injured employee into a low-ball settlement, by leveraging against the employee the present financial and medical stress of the employee.
- Claim falsely that its settlement offer is a take-it-or-leave-it offer, even though it is never a take-it-or-leave-it offer.
In short, if an injured employee is not represented by a skilled Louisiana workers compensation attorney, then the employee is not effectively protected by the Louisiana workers compensation laws.
The Louisiana Statute regarding the Due Date of Lost Wage Benefits in Louisiana Workers Compensation
The primary Louisiana statute regarding the due date for lost wage (indemnity) benefits is La. R.S. 23:1201, which reads as follows:
§1201. Time and place of payment; failure to pay timely; failure to authorize; penalties and attorney fees
A.(1) Payments of compensation under this Chapter shall be paid as near as may be possible, at the same time and place as wages were payable to the employee before the accident; however, when the employee is not living at the place where the wages were paid, or is absent therefrom, such payments shall be made by mail, upon the employee giving to the employer a sufficient mailing address. However, a longer interval, not to exceed one month, may be substituted by agreement without approval of the assistant secretary. An interval of more than one month must be approved by the assistant secretary.
(2) Notwithstanding the requirement to make payments by mail in Paragraph (1) of this Subsection, electronic transfer of funds, including but not limited to direct deposit or use of a debit card, is an appropriate method of payment of compensation under this Chapter. Where a payor or insurer elects to issue debit cards and makes weekly payments by way of electronic funds transfers, an injured worker represented by an attorney may elect to have his weekly indemnity check deposited directly into his attorney's trust account. Where such an election is made, the payor or insurer shall provide notice by way of email only to the injured worker's attorney containing a list of all claims and amounts included in the direct deposit within forty-eight hours of the direct deposit.
B. The first installment of compensation payable for temporary total disability, permanent total disability, or death shall become due on the fourteenth day after the employer or insurer has knowledge of the injury or death, on which date all such compensation then due shall be paid.
C. Installment benefits payable pursuant to R.S. 23:1221(3) shall become due on the fourteenth day after the employer or insurer has knowledge of the compensable supplemental earnings benefits on which date all such compensation then due shall be paid.
D. Installment benefits payable pursuant to R.S. 23:1221(4) shall become due on the thirtieth day after the employer or insurer receives a medical report giving notice of the permanent partial disability on which date all such compensation then due shall be paid.
E.(1) Medical benefits payable under this Chapter shall be paid within sixty days after the employer or insurer receives written notice thereof, if the provider of medical services is not utilizing the electronic billing rules and regulations provided for in R.S. 23:1203.2.
(2) For those providers of medical services who utilize the electronic billing rules and regulations provided for in R.S. 23:1203.2, medical benefits payable under this Chapter shall be paid within thirty days after the employer or insurer receives a complete electronic medical bill, as defined by rules promulgated by the Louisiana Workforce Commission.
F. Except as otherwise provided in this Chapter, failure to provide payment in accordance with this Section or failure to consent to the employee's request to select a treating physician or change physicians when such consent is required by R.S. 23:1121 shall result in the assessment of a penalty in an amount up to the greater of twelve percent of any unpaid compensation or medical benefits, or fifty dollars per calendar day for each day in which any and all compensation or medical benefits remain unpaid or such consent is withheld, together with reasonable attorney fees for each disputed claim; however, the fifty dollars per calendar day penalty shall not exceed a maximum of two thousand dollars in the aggregate for any claim. The maximum amount of penalties which may be imposed at a hearing on the merits regardless of the number of penalties which might be imposed under this Section is eight thousand dollars. An award of penalties and attorney fees at any hearing on the merits shall be res judicata as to any and all claims for which penalties may be imposed under this Section which precedes the date of the hearing. Penalties shall be assessed in the following manner:
(1) Such penalty and attorney fees shall be assessed against either the employer or the insurer, depending upon fault. No workers' compensation insurance policy shall provide that these sums shall be paid by the insurer if the workers' compensation judge determines that the penalty and attorney fees are to be paid by the employer rather than the insurer.
(2) This Subsection shall not apply if the claim is reasonably controverted or if such nonpayment results from conditions over which the employer or insurer had no control.
(3) Except as provided in Paragraph (4) of this Subsection, any additional compensation paid by the employer or insurer pursuant to this Section shall be paid directly to the employee.
(4) In the event that the health care provider prevails on a claim for payment of his fee, penalties as provided in this Section and reasonable attorney fees based upon actual hours worked may be awarded and paid directly to the health care provider. This Subsection shall not be construed to provide for recovery of more than one penalty or attorney fee.
(5) No amount paid as a penalty or attorney fee under this Subsection shall be included in any formula utilized to establish premium rates for workers' compensation insurance.
G. If any award payable under the terms of a final, nonappealable judgment is not paid within thirty days after it becomes due, there shall be added to such award an amount equal to twenty-four percent thereof or one hundred dollars per day together with reasonable attorney fees, for each calendar day after thirty days it remains unpaid, whichever is greater, which shall be paid at the same time as, and in addition to, such award, unless such nonpayment results from conditions over which the employer had no control. No amount paid as a penalty under this Subsection shall be included in any formula utilized to establish premium rates for workers' compensation insurance. The total one hundred dollar per calendar day penalty provided for in this Subsection shall not exceed three thousand dollars in the aggregate.
H. Within fourteen days after the final payment of compensation has been made, the employer or insurer shall send a notice to the office, in the manner prescribed by the rules of the assistant secretary, stating:
(1) The name of the injured employee or any other person to whom compensation has been paid, or both.
(2) The date of injury or death.
(3) The dates on which compensation has been paid.
(4) The total amount of compensation paid.
(5) The fact that final payment has been made.
I. Any employer or insurer who at any time discontinues payment of claims due and arising under this Chapter, when such discontinuance is found to be arbitrary, capricious, or without probable cause, shall be subject to the payment of a penalty not to exceed eight thousand dollars and a reasonable attorney fee for the prosecution and collection of such claims. The provisions as set forth in R.S. 23:1141 limiting the amount of attorney fees shall not apply to cases where the employer or insurer is found liable for attorney fees under this Section. The provisions as set forth in R.S. 22:1892(C) shall be applicable to claims arising under this Chapter.
J. Notwithstanding the fact that more than one violation in this Section which provides for an award of attorney fees may be applicable, only one reasonable attorney fee may be awarded against the employer or insurer in connection with any hearing on the merits of any disputed claim filed pursuant to this Section, and an award of such single attorney fee shall be res judicata as to any and all conduct for which penalties may be imposed under this Section which precedes the date of the hearing.
Amended by Acts 1954, No. 723, §1; Acts 1983, 1st Ex. Sess., No. 1, §§1, 6, eff. July 1, 1983; Acts 1985, No. 926, §1, eff. Jan. 1, 1986; Acts 1988, No. 938, §1, eff. July 1, 1989; Acts 1989, No. 23, §1, eff. June 15, 1989; Acts 1989, No. 24, §1; Acts 1989, No. 260, §1, eff. Jan. 1, 1990; Acts 1992, No. 1003, §1, eff. Jan. 1, 1993; Acts 1995, No. 1137, §1, eff. June 29, 1995; Acts 1997, No. 88, §1, eff. June 11, 1997; Acts 2003, No. 1204, §1; Acts 2008, No. 415, §2, eff. Jan. 1, 2009; Acts 2010, No. 3, §1, eff. May 11, 2010; Acts 2012, No. 652, §1, eff. July 1, 2013; Acts 2012, No. 860, §1; Acts 2013, No. 337, §1.