Rehabilitation Settlements - VR Notices

Saturday, February 1, 2003 | 0

Is a vocational rehabilitation settlement under L. C. section 4646(b)(c) valid if the employer or insurer failed to send a Notice of Potential Eligibility to the injured employee?

It is common knowledge that failure to send the employee a Notice of Potential Eligibility (NOPE) creates some problems for the defense: failure to send this notice incurs two types of "penalties." First, the employer is required to pay VRMA at the Temporary Disability rate pursuant to L. C. section 4642(a). Second, none of the expenses incurred during a vocational rehabilitation program will accrue to the $16,000 "cap" until a proper Notice is sent to the employee. [See Delta Airlines, Employers Self Insurance Service v. WCAB (Fox)(2000) 65 CCC 177 (writ denied) and Castro Valley Unified School District v. WCAB (Cusseaux)(1999) 64 CCC 668 (writ denied)] To state the matter simply, the cap doesn't start until the QIW employee is provided proper notice.

The VR settlement of up to $10,000 specified in L. C. section 4646(b) is an "in lieu of" payment. This section of the Labor Code indicates that the employee is settling a right for an agreed amount of money up to $10,000 "...for the employee's use in self directed vocational rehabilitation." If employers/insurers are required to provide proper notice to QIW employees who use VR services, are they also required to provide proper notice to injured employees who decide to settle their right to those services? We might note here that the Legislature did not eliminate the employer's obligation to provide notice - L. C. section 4637(a) remains unchanged. In my view, failure to send proper notice prior to a settlement of VR leaves the employer/insurer at significant risk.

Some have argued that the actual VR settlement will cure all prior defects, such as a failure to send proper notice. That might well be the case - but I am reminded of the Estrada case some years ago where the industry was suddenly faced with the possibility that all prior settlements of retro VRMA/VRTD issues were not valid. On that issue, the Legislature pulled the industry's chestnuts out of the fire by modifying L. C. sectionsection 4646 & 5100.6 to allow for settlement of retroactive issues by prohibiting settlement of prospective benefits and services only. If it happens that the VR settlement does not cure all defects, do we again want to depend on the Legislature for salvation? Discretion dictates providing the employee with a NOPE, even if it is done on the day of the agreement.

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