Greetings, by special request, this week’s Tip is on overpayments and how they can be recouped.
There are many reasons why a claimant could potentially be overpaid: correction of the AWW, the claimant returned to work and the adjuster was not immediately aware, switch from TTD to TPD, clmt was put at MMI and the adjuster didn’t get the note right away, etc…
Regardless of the reason or even if it was the claimant’s fault, we can only withhold 20% of each future check until the overpayment is recouped.
440.15(12) REPAYMENT.—If an employee has received a sum as an indemnity benefit under any classification or category of benefit under this chapter to which she or he is not entitled, the employee is liable to repay that sum to the employer or the carrier or to have that sum deducted from future benefits, regardless of the classification of benefits, payable to the employee under this chapter; however, a partial payment of the total repayment may not exceed 20 percent of the amount of the biweekly payment.
- One question was whether we can withhold 20% from Impairment Benefits as well as indemnity (TTD, TPD, PTD). The statute does say “….deducted from future benefits, regardless of the classification of benefits.” So I would argue yes you can withhold a TPD overpayment from IB’s.
- The issue often comes up as to what can be done to recoup an overpayment if there is still a balance due after all WC benefits have been paid.
An Employer cannot withhold from payroll funds to cover a WC overpayment, unless there is some agreement with the claimant. I did have a case where the clmt was sending a check every two weeks to the carrier for reimbursement. There is no harm in sending the claimant a letter advising of the overpayment balance and requesting they contact you to work on a payment plan.
- As far as settlements are concerned, they are negotiated, so you can recoup more than 20% of the net settlement, but it has to be a term of the settlement.
- Advances under the statute always create an overpayment. My office always has a joint stipulation signed so the claimant is aware the overpayment will be withheld from indemnity, and the remaining balance if any from any potential settlement or by any other method permissible by law.
As always, please let me know if you have any questions!
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Sincerely,
Morgan Indek | Managing Partner