Temporary Disability Issues Facing Employers In Light Of COVID-19

NEBRASKA

 

1. If somebody was on modified duty and due to the virus the employer is shutting down, are we responsible to pick up TD?

Nebraska courts require employers to pay temporary disability benefits until the sooner of two events: (1) the worker reaches maximum medical improvement, or (2) the worker returns to work. Unless and until the Nebraska Workers’ Compensation Act were to be amended in subsequent legislative sessions to specifically address the COVID-19 outbreak, the employer would be responsible for paying temporary benefits until one of these conditions has been met, even if the employer is temporarily shut down for unrelated reasons.

Court have addressed a somewhat similar situation when a worker is terminated for cause, i.e. for reasons having nothing to do with the worker’s restrictions due to the work injury. Employers have argued that a worker fired for cause should not be entitled to receive benefits because, but for his or her violation of an internal policy, or even commission of a crime, the employer would have had work available and could have accommodated the restrictions. But termination has no bearing on the employee’s entitlement to temporary benefits. In Zwiener v. Becton Dickinson-East, 285 Neb. 735, 741, 829 N.W.2d 113, 119 (2013), the Nebraska Supreme Court stated: “We have never held that an employee who ceases to work for the employer responsible for the injury somehow forfeits temporary disability benefits because the employer would have accommodated light-duty work in lieu of benefits. In fact, in Guico v. Excel Corp., 260 Neb. 712, 619 N.W.2d 470 (2000), and Manchester v. Drivers Mgmt., 278 Neb. 776, 775 N.W.2d 179 (2009), we held that employees who were fired for cause did not forfeit their temporary total disability benefits simply because their employers would have provided light-duty work.” Id.; Aldrich v. ASARCO, Inc., 221 Neb. 126, 128, 375 N.W.2d 150, 152 (1985) (“[T]he fact of termination or the reason for it is irrelevant if the plaintiff sustained a compensable injury. The fact that an employer has terminated the employment of an employee, whose ability to perform the work for which he is fitted has been restricted due to an injury arising out of and in the course of his employment, does not destroy the right of the employee to compensation for the injury.”); Hernandez v. JBS USA, 20 Neb. App. 634, 640, 828 N.W.2d 765, 771 (2013) (“We note that employees who are entitled to workers’ compensation benefits remain entitled to workers’ compensation benefits if their employment is subsequently terminated.”).

Stated differently, once the worker sustains an injury entitling him or her to temporary disability benefits, benefits cannot be stopped until one of the conditions set forth above occurs, even if the worker could not have returned to work anyway because of a shutdown. It is possible that a worker could return to work with another employer during the time the insured employer has halted operations, or that the worker would be found to be at MMI during the closure; such events would be sufficient to terminate benefits, otherwise benefits would likely be owed.

An exception may occur if the employer pays the worker his or her regular wages during the time of closure. This may come into play if the employer decides to pay all employees across the board using its own funds, or funds from a bailout or loan such as a payroll protection or small business loan, and decides to pay all employees their regular wages across the board. Payment of the worker’s regular wages will likely be more than what the worker would earn for temporary indemnity benefits, and so long as any such wages the worker receives could be designated as “wages in lieu of benefits,” temporary benefits would probably not be owed as a worker cannot receive double benefits. (The employer may be able to seek reimbursement from the carrier if it paid full wages to the worker when the worker was actually entitled to indemnity benefits during that time).

 

2. If somebody was working modified duty but they elect not to go into the office due to the virus, do we owe TD?

The key factor in this question is whether the employee’s refusal was “reasonable.” If the worker unreasonably refuses to return to suitable employment following an injury, the employer may suspend benefits during the period of refusal. Cases involving this issue have generally included factors such as the job responsibilities the worker would be expected to perform in the new position, as well as the distance between the worker’s home and the new temporary position. An employee’s fear in returning to the office would likely be a similar consideration, and we believe a court would likely find such a refusal by a worker to be reasonable. On the one hand, whether such a fear is founded could depend largely on the worker’s demographics as well as the geographical area where the worker works, as areas that have been “hotbeds” of the pandemic could be viewed as being more likely to result in a rationale fear. On the other hand, the unprecedented rate at which people are contracting the virus, the ever-increasing restrictions that workplaces are imposing in an effort to stop the spread, and the fact that there have been growing reports of younger workers affected, would probably make it difficult to argue that anyone who refuses to go to work is being “unreasonable.”

Even in areas with relatively few cases, and with no coworkers testing positive, the daily developments in this disease suggest even a rationale person could probably have a rationale fear of working in a location requiring close proximity to others. A claimant who works in an office setting with fewer than 10 people may have relatively little to worry about. But with studies suggesting the virus can be transmitted much easier than thought, and can be passed by just talking or even breathing, it is difficult to imagine a judge finding fault with a worker who believes he or she may be putting their own health, as well as the health of coworkers and members of his or her own family (especially those who may be classified as high-risk), at risk of exposure. Even when doing all the right things, i.e. washing hands for 20 seconds, being careful not to sneeze in the air or hands, practicing social distancing, wearing a mask, and keeping doors closed, an employee is probably justified in being concerned about going to work under these unique circumstances, so we think TTD benefits should still be paid during this time period. An added incentive to pay TTD is that if an employer takes the position that the fear of going to work is unreasonable (despite over 4/5 of states currently enacting some type of stay-at-home policy), and if the court were to disagree and find no reasonable controversy, that employer would be liable for a waiting time penalty of 50% of the amount of late or unpaid indemnity benefits.

 

3. How do we handle lack of TD reporting from providers as many are not taking patients right now, so injured workers may not have valid off work slips.

Courts routinely hold that the Nebraska Workers’ Compensation Act is to be broadly construed to accomplish the “beneficent purpose” of the act. See Tomlin v. Densberger Drywall Inc., 706 N.W.2d 595, 14 Neb. Ct. App. 288, 2005 Neb. App. LEXIS 287 (Neb. Ct. App. 2005). What this means, from a practical standpoint, is that the court will often point to this language to justify finding in the claimant’s favor when there is a close call. We think the court would likewise cite to this language in the case of a worker who has failed to provide a current work slip due to closures/delays caused by COVID-19. To the extent the failure is related to a backlog caused by the provider being closed/not taking patients/postponing appointments that are scheduled the near future, the court will likely require the employer to bridge that time and continue to honor the existing off-work slips until a new appointment can be arranged. Even if it is reasonable to assume a particular worker may have already reached MMI, there is no substitute for a doctor making that determination and the court would find that the worker should not be penalized for the provider’s inability to provide an updated status. Therefore, we would have a choice to either continue paying benefits based on the existing slip, or else to obtain a work slip from a different provider or IME physician.

 

4. How do we handle lack of disability/work status reporting from providers, as many are cancelling appointments, not taking patients right now, or other issues that prevent the injured workers from getting valid off work slips.

Please see response to Question No. 3, above. The court would probably conclude that things are on hold until the employee has had the opportunity to be seen by the provider. Where the provider at issue has closed its office or is otherwise unable to see the worker due to some aspect of the outbreak, the judge would most likely hold that the worker’s status as of the last appointment should apply. This means that the employer will likely need to either abide by the most recent note, or else take steps to seek treatment by another authorized provider. The court would probably not endorse the employer unilaterally steering plaintiff to a new provider just to be seen more quickly, though it is unclear how the court would react depending on how long things are shut down.

Nebraska law provides that “[i]f, due to the nature of the injury or its occurrence away from the employer’s place of business, the employee or the employer is unable to select a physician using the procedures provided by this subsection, the selection requirements of this subsection shall not apply as long as the inability to make a selection persists.” NEB. REV. STAT. § 48-120(2)(d). Closure due to the virus would not fit with these circumstances, since such closure does not relate to the “nature of the injury” or the location in relation to the employer’s place of business, but it does suggest there could be a willingness by the court to put a hold on the selection requirements under Rule 50 in circumstances in which they cannot be met. It is possible, though not likely, that the court could view such closures as a similar “inability to make a selection,” which may justify altering the statutory method of selecting a provider.

 

5. If the injured worker elects to temporarily discontinue treatment (such as PT, chiro etc.) due to the virus, do we continue to owe benefits?

Nebraska recognizes limited situations in which a worker’s refusal to proceed with treatment can justify suspension of benefits. For instance:

• If the injured employee unreasonably refuses or neglects to avail himself or herself of medical or surgical treatment furnished by the employer, except as herein and otherwise provided, the employer is not liable for an aggravation of such injury to due to such refusal and neglect the compensation court or judge hereof may suspend, reduce, or limit the compensation otherwise payable under the Nebraska Workers’ Compensation Act.

NEB. REV. STAT. § 48-120(2)(c) (emphasis added).

There are a few take-aways from this section. First, the worker’s actions will, once again, be measured against the standard of “reasonableness.” Second, the statute does allow employers to “suspend, reduce or limit” benefits (note the absence of the term “terminate”) during the period that the worker fails to comply with the treatment. Third, the specific reference to “the compensation court or judge” suggests that any suspension, reduction or limit on benefits is not self-administered, but rather must be effectuated by a judge.

It is not difficult to see how COVID-19 could have a chilling effect on a worker’s willingness to undergo treatment. Even for treatment the worker knows would likely be beneficial to his or her recovery, the benefits of attending an appointment to seek that treatment could easily be overshadowed by the perceived danger to the worker and the worker’s family of exposure to a risk of contracting COVID-19. If the case-by-case circumstances in a particular matter indicate that the worker’s fear of seeking additional treatment is likely unfounded or irrational, we may be able to avoid paying benefits. Under the language of the statute, however, such suspension must be through a court order. The employer should move to terminate or suspend benefits and ask the court for an order on that issue, rather than unilaterally stopping benefits and risking having to pay a penalty on the amount of any unpaid indemnity benefits should the court conclude that there was not a reasonable controversy about the worker’s entitlement to the same.

Nebraska also allows an employer to suspend benefits if the worker refuses to submit to an IME: “The unreasonable refusal of the employee to submit to such [independent medical] examination shall deprive him or her of the right to compensation under the Nebraska Workers’ Compensation Act during the continuance of such refusal, and the period of such refusal shall be deducted from the period during which compensation would otherwise be payable.” NEB. REV. STAT. § 48-134. See also Behrens v. American Stores Packing Co., 234 Neb. 25, 449 N.W.2d 197 (1989) (the determination of whether a plaintiff’s refusal to submit to a medical examination was unreasonable “under the circumstances” is a fact question). As with the section above, best practices would dictate that if the facts in a particular case support suspension of benefits because a claimant is refusing to attend an IME due to fears related to the virus, the employer should seek a court order regarding payment of benefits, rather than unilaterally putting those benefits on hold.

 

IOWA

 

1. If somebody was on modified duty and due to the virus the employer is shutting down, are we responsible to pick up TD?

Iowa law requires employers to pay temporary total disability benefits (intended for injuries which are not expected to result in permanent injury) “until the employee has returned to work or is medically capable of returning to employment substantially similar to the employment in which the employee was engaged at the time of injury, whichever occurs first.” IOWA CODE § 85.33(1).

To the extent the worker’s injuries result in permanent disability, he or she is entitled to receive healing period benefits, rather than temporary total disability benefits, until the first of the following three events: (1) the worker has returned to work; (2) the worker medically is capable of returning to substantially similar employment; or (3) the worker has achieved maximum medical recovery. IOWA CODE § 85.34(1). Temporary partial disability benefits are due when “it is medically indicated that the employee is not capable of returning to employment substantially similar to the employment in which the employee was engaged at the time of injury, but is able to perform other work consistent with the employee’s disability.” IOWA CODE § 85.33(2).

Courts have held that intervening events will not disqualify a worker from receiving benefits so long as the worker would otherwise be entitled to receive such benefits, regardless of whether other events also kept the worker from being able to work during that time. Therefore, if a worker is receiving temporary benefits and the employer shuts down its operations for some reason, including precautions or orders relating to COVID-19, the employer would continue to owe benefits until the occurrence of one of the applicable triggering events above.

 

2. If somebody was working modified duty but they elect not to go into the office due to the virus, do we owe TD?

If the employer makes an offer of suitable employment which the worker unreasonably refuses, the worker is not entitled temporary benefits during the period of refusal. As under Nebraska law, the determining factor will be whether the claimant acted “reasonably” in refusing the employer’s offer of employment. Courts have determined that suitable work does not mean simply any work the worker is physically capable of performing, and there are limits to what a worker should be expected to endure and still have the work be regarded as “suitable.” See, e.g. Neal v. Annett Holdings, Inc., 814 N.W.2d 512 (Iowa 2012) (holding it was not unreasonable of the worker to refuse to report for temporary work that was hundreds of miles away from his employer’s premises).

Each case is fact-specific, so it will be important to determine all details surrounding the worker’s refusal to report to the employer’s premises. A worker’s refusal that is based on concerns about the virus, i.e. not wanting to work in close proximity with others, whether or not there have been any known case at the premises in question, would likely be deemed reasonable when taking all circumstances into account.

 

3. How do we handle lack of TD reporting from providers as many are not taking patients right now, so injured workers may not have valid off work slips.

The Iowa agency will likely require the employer to continue paying temporary disability benefits based on the most current reports until one of the triggering events has occurred, even if there is a good faith belief that claimant has likely reached MMI or is capable of returning to work. Such a determination must be made by a physician, so if the treating physician is unable to examine claimant to provide an updated status due to closures or other restrictions placed on the provider’s practice, the employer can either wait it out and continue to pay until the provider becomes available, arrange alternate care with another provider (since the employer gets to select care), or set up an IME.

 

4. How do we handle lack of disability/work status reporting from providers, as many are cancelling appointments, not taking patients right now, or other issues that prevent the injured workers from getting valid off work slips.

Please see above. In addition, referrals from the authorized physician to another physician are generally regarded as being authorized as well. If the authorized provider cannot conduct an updated exam or see the worker due to closures or practice restrictions caused by the virus, that provider may be willing to refer the worker to another practice group in the interest of preventing delays in the claimant’s treatment, so that could be another option in trying to bring the treatment towards conclusion.

 

5. If the injured worker elects to temporarily discontinue treatment (such as PT, chiro etc.) due to the virus, do we continue to owe benefits?

The employer’s obligation to furnish medical treatment to an injured worker is not absolute; if a worker unreasonably refuses to continue with treatment being offered by the employer, the employer’s obligation to offer the medical benefits typically comes to an end. The key question, once again, is whether the refusal was reasonable. The agency would probably find that a worker’s refusal to proceed with authorized treatment, due to fears about contracting or spreading COVID-19, is well-founded. See, e.g. Bruneau v. Insulation Serv., Inc., 1 Iowa Indus. Comm’r Rep. 34, 35 (appeal dec. 1981) (“If the trier of fact believed that fear [of undergoing back surgery] to be sincere, as it were, and if the surgery itself is dangerous, claimant should not be deprived of any compensation benefits.”).

Generally, the worker does not forfeit indemnity benefits if he or she refuses treatment, but there is an exception for refusing to attend an IME arranged by the employer. Under Iowa Code § 85.39(1): “The refusal of the employee to submit to the examination shall forfeit the employee’s right to any compensation for the period of the refusal. Compensation shall not be payable for the period of refusal.” While this provision does not require that the refusal be “unreasonable” before benefits can be suspended, if a worker informs the employer that he or she wants to postpone, rather than cancel, an IME due to the virus, it would probably be viewed as a reasonable request that would not subject the worker to suspension of benefits.

If you have questions about the above information, please give Partner Attorney, Stacy Morris a call at 402-397-7300.