WORKER’S COMP OFFSET ARTICLE

WORKER’S COMP OFFSET NOTES AND MINI REFEERENCE GUIDE

WC Offset Notes and Mini Reference Guide

My office procedure when filing an initial SSDI claim that involves WC is to provide the following to SSA at the initial step:

1) SSA 1696 2) Fee Agreement 3) SSA 827 4) SSA 1709 with Section I completed and signed 5) Printout of payments to date * 6) Signed copy of any Lump-Sum settlement, if applicable 7) Any medical records, IME’s, FCE’s, in claimant’s possession 8) A short narrative, if needed, as to the current status of the claim

This will usually save several months of back and forth mailing with the Field Office before the claim is forwarded to the DDS office for a medical determination.

* Some states, Washington as an example, have a website where a claimant can review their claims, payments, medical records and other documents. These sites are a gold mine for payment records and medical records. If I have a client in one of these states I schedule an in-office appointment and review everything in the work comp file. I print any and all records that may be pertinent to the SSDI claim.

Information needed in order to determine whether or not a claimant would be subject to offset if granted SSDI benefits.

PIA - Primary Insured Amount. You will probably have to contact SSA directly for that figure. I will usually call the FO with the client present and request PIA and Fam Max (if applicable).

Work Comp periodic payment amount - This is the amount your client (or potential client) receives from the work comp surety. Checks are usually biweekly. Most claimants will be able to tell you when payments started, stopped or changed.

ACE - Average Current Earning

Calculating an ACE:

Highest single year within 5 years of injury, divided by 12, multiplied by .8.

Or Highest 5 years of earnings, divided by 60, multiplied by .8.

Use whichever formula is most beneficial to claimant.

WORKER’S COMP OFFSET NOTES AND

MINI REFEERENCE GUIDE (CONTINUED)

Add the monthly work comp amount to the PIA amount. If the amount is less than the ACE amount, there shouldn’t be an offset. If the amount is greater than the ACE amount, the claim would be subject to offset. Please remember that most WC claims will go through a cycle of payments, non-payments, reinstatement of payments, settlement, or something along those lines. If language is not incorporated into a LSS, then SSA will prorate any settlement into the future. It is very important that the WC attorney review potential settlements and outcomes before advising a client on LSS. In most cases it is very beneficial to incorporate proration language to avoid offset.

If a client is unrepresented in their work comp claim, I will repeatedly suggest that they seek counsel and offer to provide a list of local WC attorneys. If they are already represented, I will do everything I can to make sure there is regular communication with that office. Here are a couple of sample emails I have sent to referring attorney’s.

Dear [WC Atty]:

I just received the WC payment info on the [client] matter. Here are the figures to date.

ACE = $2,580 (High year 2014 $38,700)

PIA 2017 = $1185 PIA 2018 = $1209 PIA 2019 = $1243

TII Application date 6/12/18. Earliest possible payment date if found disabled = 6/2017.

ACE ($2580) - PIA (1243) = $1337

If we are successful at hearing, [client] should be able to receive up to $1337/mo in prorated benefits prior to an offset being triggered.

Based on SSA website figures, [client] has a life expectancy of 24.5 years, or 294 months.

*I typically enclosed a printout of earnings showing my work in calculating the most beneficial ACE; a copy of the life expectancy calculator; and PIA info, if available.

Here is an example of an email where the attorney forgot to notify my office of a lump sum settlement, and failed to incorporate offset language.

Dear [WC Atty]:

I just received a copy of the signed LSS from [client]. Since the LSS did not contain proration language, here is an estimated breakdown of TII disability benefits.

Gross settlement

$50,000 Excl. Fee expense (12,500)

WORKER’S COMP OFFSET NOTES AND

MINI REFEERENCE GUIDE (CONTINUED)

Net Settlement

$37,500 Excl. Future Medical (10,000) POMS DI 52150.050

Amount subject to offset $27,500

$27,500 divided by $392.40 (amount of last periodic payment, rounded to nearest dime POMS DI 52150.060 (D)(3)(d) = 70.08 weeks). Start date for proration is day after the day of the last periodic payment (6/15/18). 29 weeks would be the balance of 2018, and remaining 41 weeks would end this week. (POMS DI 52150.060 (D)(2)(b)).

Based on these figures, it is my belief that she will not be eligible for her full SSA disability payments until next month. SSA is running their calculations today.

I’ve been given two PIA’s by SSA. I am assuming that one is 2018 amount, and the other 2019. $1265 and $1301.

Her ACE is $2487. $392.40 x 4.3 = $1687.70 work comp per month. 2018 PIA $1265 plus $1687 work comp = $2952. Her ACE is $2487, so she would be subject to offset for the balance of 2018 (29 weeks). $1301 PIA plus $1687 WC would be $2988, ACE is $2487, so she will be in offset through next week (41 weeks).

Found disabled as of 9/2017, DOI. Received weekly WC of $392.49 through 6/14/18. Her application was not filed until 5/2019, so benefits cannot start prior to 5/2018. Medicare should start Feb 2020.

(Side note on this case. She had contacted SSA to inquire about a monthly benefit amount while still thinking she would be able to return to work. That call took place in 9/2018. We were able to get this deemed a protected filing date which resulted in additional benefits).

Samples of offset language incorporated into Lump Sum Settlements:

“ The parties acknowledge that they have disputes over the extent of Claimant’s disability, which would continue for his lifetime, as well as other issues. Claimant alleges, for purposes of Social Security, that he is entitled to prorate the amount of this Lump Sum Settlement over his lifetime. Claimant alleges that his preset life expectancy is approximately 25 years, and that for proration purposes, for Social Security, the sum of $130,000, less attorney fees of $32,500 and costs of $4,225.54 is $93,274.46, and that $93,274.46 should be prorated over the Claimant’s life expectancy, which would factor into a weekly benefit of $71.74 over his 25-year life expectancy”.

and

“It is Claimant’s contention that she suffered permanent partial disability following an accident that occurred on 12/29/14. At the time of the injury, Claimant was age 58.5 years old. Claimant asserts her life expectancy is presently 86.3 years. As such, she had an additional life expectancy of about 27.8 years after the date of her accident. Claimant’s life expectancy was extrapolated from the official website of the Social Security Administration:

WORKER’S COMP OFFSET NOTES AND

MINI REFEERENCE GUIDE (CONTINUED)

(https://www.socialsecurity.gov/oact/population/longevity.html). As full settlement of any and all claims listed above for workers’ compensation benefits, Claimant has agreed to accept and surety has agreed to pay a lump sum of $73,714.00 new money, including the leaving of her future medical costs open. This lump sum amount is compensation for permanent disability which will affect Claimant for the rest of her life. Claimant assets her remaining life expectancy is presently about 298.8 months. Therefore, the total new money lump sum of $73,714.00 less attorney’s fees of $18,428.50 will result in a net lump sum settlement to the Claimant in the amount of $55,285.50. Claimant further asserts that the net lump sum payment of $55,285.50 to Claimant represents payment to the Claimant of about $185.02 per month for the 298.8 months of the Claimant’s remaining life expectancy, as calculated according to the official website of the Social Security Administration”.

Basic Reminders:

Remind ALL clients, in writing, that SSA needs notified ASAP if there are changes in work comp payments. This includes starting, stopping, entering into a LSS, or rulings by the Industrial Commission/Labor and Industries. I typically make this, in bold, in the first paragraph of a

closing letter.

When providing SSA with a copy of a Lump Sum Settlement, make sure it is signed by all parties and date stamped! Unsigned or unapproved copies will not be accepted by SSA.

POMS references:

DI 521 - Workers’ Compensation/Public Disability Benefit Offset

Most referenced in my practice -

DI 52120 - State Specific WC Procedures DI 52150 - Factors in computing WC/Public Disability offset DI 52110.000 - WC Payments that May Cause Offset DI 52105.015 - Payments Not Considered WC DI 52150.065 - Subsequent Addendums (I typically provide a copy to those that contact my office and request assistance in “fixing” a LSS they negotiated themselves).