Morgan’s Tip of the Week – Math/OP and UP

Greetings, this tip is on everyone’s favorite topic, math.

For the first few weeks of a claim, it can be difficult to obtain the correct information regarding the AWW and post-accident earnings to pay benefits correctly.

This can create hodge-podge of underpaid weeks and overpaid weeks once the info is received.   Per the statute, any late underpayments carry a 20% penalty and 12% interest ($5 min. per check).   Any overpayments can be recouped by withholding 20% from future checks.  There is no mechanism in the statute itself for reconciling underpayments and overpayments, they are treated separately.

So messy.

A JCC decision out of Miami last week caught my eye.  In that case (order below), there were underpayments and overpayments.  The claimant was arguing for penalties and interest on the underpayments despite the fact there were also overpayments.   Traditionally, this is how that had been handled, each 2-week period stood on its own.  However, this JCC looked at the total bucket that was owed it appears, and did not award any additional P and I, allowing the carrier to reclassify the payments. 

For example, based on the JCC’s ruling, if there was a $10 late underpayment on one check and then a $10 overpayment on a subsequent check, they would wipe each other out.   Historically, it would have been viewed as a $2 penalty and $5 interest on top of the $10 underpayment and the claimant would still be owed $7, despite the fact all benefits had been provided in total, just not in the correct time periods.

The JCC said:

“The correct calculation of benefits is an administrative function and where benefits have

been incorrectly classified the E/C is entitled to recalculate the benefits to ensure the Claimant receives those benefits to which she is entitled, no more, no less. To find otherwise would result in a windfall to the Claimant which was not contemplated by the statute.”

Warning: So this is a JCC level decision, and not an Appellate decision.  That means that other JCC’s are not bound to follow that reasoning, and the 1st DCA could always find otherwise.  (I have heard that the state has done the same as the JCC in an audit, but that is second hand info).  I do have a concern that this methodology of overpayments wiping out underpayments does not address the lateness of payments, especially if the overpayments are done much later in time than the underpayments.

Here is a link to the order.