Benefits
Offsetting Workers' Comp.
In this area, we'll look at whether, and to what extent, you
can offset workers' compensation benefits against benefits from
other sources.
Interaction with retirement plans. Suppose your
employee is on workers' compensation leave and retires. Do you
have to pay the employee both the workers' compensation benefits
and the retirement benefits, or can you offset one against the
other? The answer is that there are no hard and fast rules, but
you should note that at least one court has held that offsetting
workers' compensation benefits against retirement benefits was
appropriate. You may be able to offset workers' compensation
benefits as long as your retirement plan does not expressly
prohibit it.
Interaction with medical plans. Suppose your medical
plan also includes coverage for certain workplace-related
medical expenses. Does the employee get the benefit of both
coverages? The answer is "not usually," although
sometimes employees do get the windfall. If you discover
overlapping coverage, you should notify both the workers'
compensation carrier and the medical plan carrier and let them
work out the coordination of benefits.
Interaction with Social Security. Sometimes Social
Security will pay for disability benefits that overlap with
workers' compensation benefits. Approximately half the states
have laws that offset those benefits so that employees are paid
only once. If you have an employee who is entitled to workers'
compensation benefits, you should instruct him or her to contact
the local Social Security office to find out which benefits he
or she is entitled to.
Interaction with federal benefits laws. Here are some
questions and answers that may help you understand how workers'
compensation laws interact with other benefit laws. These
questions and answers presume that the other benefit laws
mentioned here apply to you, which may not be the case if you
have only a few employees.
Is an employee away from work because of a workers'
compensation-related injury still entitled to leave under the
Family
and Medical Leave Act? Yes. The injured employee's
rights under the FMLA (which applies to employers with 50 or
more employees) are not affected by the fact that he or she is
receiving workers' compensation benefits.
Can a workers' compensation injury be considered a
"disability," thus triggering rights under the
Americans with Disabilities Act? Yes. The ADA (which applies
to employers with 20 or more employees) defines disability as:
- having a mental or physical impairment that substantially
limits a major life function
- having a record of substantially limiting impairment
- being regarded as having a substantially limiting
impairment
If your injured employee fits into one of those three
categories, the employee has rights under the ADA. Most
importantly, the ADA requires that you provide reasonable
accommodation in finding other work for the employee to do. You
cannot just fire the employee for no longer being able to
perform the job.
In the days before the ADA, employers that had maximum
leave-of-absence policies would send the employee a notice of
termination when the leave period was exhausted. Under the ADA,
employers must send a notice by certified mail at least 30 days
prior to the end of the leave that explains the reasonable
accommodation requirement. Depending upon the circumstances,
reasonable accommodation may have to include extending the leave
period.
If an injured employee's right to participate in the group
health plan ends while the employee is away from work, do I have
to give the employee notice of COBRA
rights? Absolutely. You should also be careful about
determining when the COBRA rights are triggered. If the employee
has unexpired FMLA leave time remaining, the COBRA rights are
not triggered until the FMLA leave is used up.
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