SJDB vouchers - More FAQs

Saturday, May 20, 2006 | 0

By Allan Leno

The applicant has an accepted 2005 CT claim that overlaps two policy periods by different insurers. The treating physician has determined the applicant has permanent disability and work restrictions that preclude a return to his regular duty; the employer cannot provide modified or alternative work so the injured worker is entitled to an SJDB voucher. As the insurer managing the claim, can we seek contribution from the other insurer for the voucher? Can we seek contribution for the 15% PD adjustment?

With respect to contribution, the voucher is no different than vocational rehabilitation. Employment during both policy periods contributed to the applicants permanent disability so the insurer managing the claim can seek contribution from the other carrier for the proportionate share determined by the WCAB (or by agreement). The same should apply for the 15% PD increase resulting from the employers inability to provide modified or alternative work.

When an employer cannot provide a modified or alternative job, when does the 15% PD increase begin - at 60 days or as soon as it is determined that no modified or alternative work is available? Also, the 15% increase in PD will mean that the applicants PD rate will exceed her TD rate - do I have to pay at the higher rate?

L. C. Section 4658(d)(2) indicates the 15% increase in the PD rate begins at the end of the 60 day period (from the P&S date) so the employer/insurer is not obligated to commence the PD adjustment at the time it is determined that modified/alternative (or regular) work is not available. This may seem counter-intuitive but the statute seems quite clear that the requirement to pay the 15% increase does not begin until 60 days after the P&S date.

The applicant was released to modified duties while still TD. The employer was able to provide appropriate work and the employee returned to work at his pre-injury wage rate. Can I reduce the applicants PD payments by 15%?

No. L. C. Section 4658(d) is quite clear that the +/- 15% PD adjustment can only commence after the applicant becomes P&S. Applicants who return to regular, modified or alternative work prior to P&S must be paid applicable PD advances but the employer/insurer cannot reduce those payments by 15% until an offer of work is made after the applicant becomes P&S (see 4658(d)(3)(A)). There are three important conditions to note here before there can be a reduction in PDAs: (1) the applicant must be P&S, (2) there must be an offer of work after the P&S date, and (3) the 15% reduction in PDAs can begin immediately after the offer is made. This means that the employer must make an offer of employment even where the employee is working but, once an offer is made, the reduction in PD payments can begin immediately.

I have heard that the employee must be sent a 10133.53 Notice of Offer of Modified or Alternative Work where TD payments have stopped because the employee returned to work in a temporary or transitional job. Is this true? What if the employer can provide temporary work but the availability of a permanent modified or alternative job is unknown?

There are many reasons why such a requirement might be onerous for the employer and misleading for the injured worker but Otis Byrd at the DWC has confirmed that the 10133.53 Notice must be sent for temporary or transitional job offers or the employer/insurer will lose the option to avoid a voucher obligation by offering modified or alternative work after the applicant becomes P&S. The DWC legal staff believes the statute leaves the Division no choice in the matter because it requires an offer to be made within 30 days of the last payment of TD (rather than after a P&S determination). In creating the statute, the Legislature clearly failed to contemplate that many injured workers return to work before they are P&S and that there are many employers who provide temporary and transitional jobs for their injured employees. Unfortunately, employers who provide temporary/transitional may not be certain they can provide a permanent position once final work restrictions are known. This requirement may also have the potential for creating an FEHA exposure for the employer.

This requirement can also be misleading to injured workers. The 10133.53 form indicates they have 30 days to respond to the offer; there is no such time frame. When an applicant is released to temporary or transitional work, they must immediately accept the work and return or learn to subsist on PDAs; their TTD benefits will terminate on the return to work date provided by the employer. There is no requirement for a temporary or transitional position to last twelve months. In fact, such positions usually do not last more than 45 days and should never last more than 90 days without a full review and agreement by the parties. Finally, there is no 85% wage requirement; the position can pay any amount allowed by law as long as the employer/insurer pays wage loss where applicable.

Editorial note: I disagree with the DWC Legal assessment that it had no options here. It seems to me that DWC could have created a requirement to document a temporary/transitional job with some sort of offer form (lets call it a 10133.53(temp)) and specified that failure to properly document a temporary/transitional job would require a voucher, even where a permanent job is documented by a 10133.53. The effect of requiring use of the 10133.53 for temporary/transitional jobs may be to discourage employers from providing such work and that would be unfortunate for injured workers. It would also serve to increase claim costs and that runs counter to the intent of SB 899 and its progenitors.

Is a voucher due if the injured worker moves out of state? How about out of the country? If the voucher is due, how do we determine if the training facility is approved

There is no prohibition in L. C. SectionSection 4658.5/4658.6 against using the SJDB voucher in another state or another country. Technically, the injured worker can use his/her voucher at any training facility in the world as long as that facility is approved by a recognized agency.

There have already been a number of cases where the injured worker has elected to use his/her voucher at institutions outside the State of California. CCR Section 10133.58 provides guidance on the types of institutions that may be used and the accreditation expected. Colleges and universities must be accredited by a Regional Association similar to the Western Association of Colleges and Universities that accredits California institutions. Vocational facilities must be approved by an agency similar to the Bureau for Private Postsecondary and Vocational Education (BPPVE). The Bureau can provide a list of such organizations (you must call the Bureau - the list is not available on-line). FAA approved institutions are also acceptable.

Determining accreditation for training institutions outside the U.S. presents a greater challenge. Institutions supported by the local government are probably acceptable. If in doubt, start by calling the Bureau ((916) 574-7720). If the parties cannot agree on the out of country institution, they can file a 10133.55 Request for Dispute Resolution and present their respective arguments.

The 10003 Notice of Offer of Regular Work indicates that it is to be used for injuries on or after 1/1/2005 only. Does this mean I do not have to worry about documenting regular work offers for pre-2005 dates of injury?

You do not have to document regular work offers for 2005 cases - yet. The 10003 Notice of Offer of Regular Work is a proposed form and has not yet completed the regulatory review process. Employers and insurers are therefore not required to use the form. However, it is clear that the DWC intends to require the use of a form to document return to work offers for regular work, as well as offers of modified and alternative work. The basis for this requirement is the 15% PD adjustment contained within L. C. Section 4658(d); to justify a 15% reduction in weekly PD payments, the employer must make an offer of regular, modified or alternative work. There is already a form that documents offers of modified or alternative work (the 10133.53); the proposed 10003 is the corresponding form for regular work. Although the form is not yet required, it might be a good idea to start using the proposed form, or a form of your own design, to get your staff ready for the time when a variant of the 10003 becomes a requirement. This will be an adjustment for claims administrators because we have never had to document a return to regular work.

There is no requirement to document a return to regular work for 2004 cases because injured workers with a 2004 date of injury are not entitled to the PD adjustment.

And a VR Question -

Is an employer obligated to pay the 10% self imposed penalty (SIP) on a late payment of VRMA?

L. C. Section 4560 does not identify VRMA as an indemnity benefit so DWC has not imposed administrative penalties where the SIP was not paid. A couple of years ago, it appeared that this situation would change when the Board, in Rivera/Crump, determined en banc (among other things) that VRMA was an indemnity benefit and there was no reason it should be exempt from the SIP requirement. The District Court of Appeal reversed and remanded the Boards decision; the SIP issue for late VRMA payments was not revisited. So the simple answer to this question is that there is no requirement to pay the SIP for late VRMA payments.

However, late VRMA payments are subject to 5814 penalties and these may be significantly more expensive than the SIP. A claims administrator may need to make a financial decision to pay the SIP as the lesser of two evils.

Contributed by vocational rehabilitation expert Allan Leno, Leno & Associates, (818) 370-8859, allanleno@leno-assoc.com.

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