New Jersey Workers’ Compensation Act Creates Second Injury Fund

By Bruce P. Miller

August 1st, 2013

The New Jersey Workers’ Compensation Act creates an entity called the Second Injury Fund.  All employers in the State of New   Jersey are required to pay into this fund through their Workers’ Compensation policy premium.  The Fund is administered by the Office of the Attorney General of the State of New Jersey.  The Fund comes into play in those cases in which an injured worker has been rendered totally and permanently disabled.

The purpose of the Fund is to pay such workers in the following circumstance.  It has to be established that the injured worker will never be able to work again, in any capacity or in any form of employment.  That disability must be the result of two things: injuries or illness sustained as a result of employment and injuries or illness that occurred prior to the work-related accident or illness.

The historic purpose of the Fund has been to encourage the hiring of workers who sustained and suffered from various injuries or illnesses prior to their employment by relieving the employer of the responsibility to pay for disability that had nothing to do with and preceded that worker’s employment.

An example of such disability is the following.  A worker suffers a severe injury as a result of an accident during the course of employment; however, that injury, in and of itself, does not render the worker unable to return to work.  The work-related disability is of a partial nature.  However, if the worker had suffered pre-existing health issues that, in combination with the work-related injury, render that worker 100% permanently and totally disabled, the Second Injury Fund is responsible to pay for the pre-existing disability and the employer is responsible to pay for that disability which arose as a result of the work-related accident.

Another illustration of Second Injury Fund liability is the following.  An individual, as a child, is playing with a BB gun and is accidentally shot in one eye, resulting in blindness in that eye.  That person continues to live his/her life and has a working career.  One day, while working, an accident occurs on the job in which something strikes the other eye causing blindness in that eye.  The combination of the two injuries, pre-existing and work-related, result in total blindness and thus total permanent disability.  In that situation, the employer is responsible to pay 50% total permanent disability for the work-related blindness and the remaining 50% is paid by the Second Injury Fund for the childhood blindness.

Total and permanent disability benefits are paid for the rest of the worker’s life.

As a practical matter, workers often tend to forget or minimize pre-existing health problems because their focus is often entirely on the work-related injury.  However, as illustrated above, an individual’s pre-existing health issues are quite important in a claim for total permanent disability benefits.  It is our practice to inquire closely of an individual who is making a claim for total permanent disability about that person’s entire health history, including childhood injuries, injuries arising out of any motor vehicle accidents throughout that person’s life as well as diseases for which that individual suffers and may see a family physician for treatment, such as diabetes, hypertension, hearing loss, heart problems, breathing issues and psychological problems.  It has to be shown that if such problems exist, they continue to impact the person’s life and that person’s ability to return to work.

Included among a worker’s pre-existing health history are any work-related injuries sustained throughout that person’s life, whether or not a Workers’ Compensation award was obtained.

Total permanent disability entitles a worker to receive 70% of salary up to a set maximum rate.  The maximum rate in 2013 is $826.00 per week.  These benefits are paid to a totally disabled individual for life, assuming that person does not recover to the point of being able to return to work.

When preparing a Workers’ Compensation case in which a claim for total permanent disability benefits is made, it is very important that a complete medical and health history be presented.  This often requires obtaining and reviewing health records one may have respecting previous illnesses and injuries.  The input of family members and friends who are able to remember injuries and illnesses in the past that the worker may have forgotten is extremely important and helpful.

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The Basis for New Jersey Workers’ Compensation Jurisdiction

By Bruce P. Miller

May 3rd, 2013

The basis for New Jersey Workers’ Compensation jurisdiction is primarily the place where the injured worker was hired and the place where the injured worker was injured.  In other words, if a worker was hired by the employer in New Jersey, but was injured in another state, New Jersey would still have Workers’ Compensation jurisdiction and thus, a worker could file his/her case in the New Jersey Workers’ Compensation Court and seek all available benefits under New Jersey Workers’ Compensation law.

If  the accident in which the employee was injured occurred in New Jersey, even if the worker was hired elsewhere or lived elsewhere, the New Jersey Workers’ Compensation Court would have jurisdiction and the case could be filed and pursued inNew Jerseyseeking all available Workers’ Compensation remedies.

The fact that the injured worker lived outside of New Jersey is irrelevant.

A third basis for New Jersey Workers’ Compensation jurisdiction, depending upon the nature of the employment, concerns whether most of the work done by the injured worker was performed in this state.  For example, our Courts have allowed New Jersey jurisdiction if the injured worker was a truck driver who performed most of his driving in this state and whose terminal was in New Jersey, even if he was hired and injured outside of New Jersey.  Moreover, what adds to the likelihood that the Courts would accept New Jersey Workers’ Compensation jurisdiction is if the injured worker garaged or parked his truck in this state, whether at his home or in a local facility.  If indeed, the bulk of the worker’s trips either began or ended inNew Jersey, that fact would be an important one to consider.

There are instances in which an injured worker has “joint jurisdiction” with respect to his/her Workers’ Compensation case.  If  both New Jersey and another state(s) has jurisdiction, cases can be pursued at the same time in both states.  For example, if somebody was hired in New Jersey, but injured inPennsylvania, that individual has the right to file and pursue Workers’ Compensation cases in both of those states, seeking the maximum benefits that can be paid under the laws of each state.  However, that does not mean there is a duplication of benefits.  For example, that injured worker can only be awarded temporary disability in either New Jersey or Pennsylvania, not in both.

The worker can obtain medical treatment that is the responsibility of the employer or its insurance company under the law of either state.  Therefore, if the Workers’ Compensation Temporary Disability rate is higher in New Jersey, the worker can receive New Jersey Workers’ Compensation Temporary Disability benefits.  At the same time, if for example the Pennsylvania Workers’ Compensation law is more generous with respect to Temporary Disability benefits or offering medical treatment, the worker can pursue that right by filing a Pennsylvania Workers’ Compensation case and pursuing remedies in the Pennsylvania Workers’Compensation Court.

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The “Injury-Free Workplace”: A Myth?

By Kendall W. Medway

April 30th, 2013

During a recent drive to Court in New Brunswick, I passed a large industrial facility along the side of the road.  Emblazoned in large letters on the side of the building was the following statement:  Eight Injury-Free Years!  I have to admit that it sounded very impressive at first, but then I started thinking about the implications of such a statement.

Given the size of the facility I feel that I have to take a jaundiced view of the statement’s truthfulness.  While it would be nice to believe that a facility of that size could be sophisticated and forward-thinking enough to render itself “safe,” there is a much likelier explanation for the statement:  that the employees of the facility simply don’t tell anybody about their workplace injuries.

Think about it.  An employer that creates a culture of fear surrounding the occurrence and reporting of workplace injuries could easily make such a statement.  If the employees are concerned that reporting a work injury could result in the loss of their jobs, or other retaliatory action, the frequency of such injuries will drop substantially (at least on paper).

However, keeping silent about a work injury hurts not just the employee, but everybody in the long run.  It hurts the employee on a physical level, but it also hurts the insurance carrier, since it’s paying for treatment that workers’ compensation benefits should cover.  It even hurts the other employees, since the company is much less likely to put safety measures in place without the financial impetus of rising insurance costs at the end of each year.

So, if you get hurt at work, be sure to report the incident to your employer and get in touch with a knowledgeable attorney for assistance.  You’ll be glad in the long run.

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Giving Notice for a Work Related Accident

By Jeffrey S. Monaghan

April 16th, 2013

Under our workers’ compensation statutes, an employee who is involved in a work related accident is required to give notice of this accident to their employer within 90 days of the date of the accidents.  Failure to do so will prevent the employee from recovering any workers’ compensation benefits in connection with the accident.

On March 11, 2003, our New Jersey Appellate Division in the case of Adler v. Lebanon Township, affirmed the decision of a workers’ compensation trial judge dismissing a workers’ compensation claim petition that had been filed on behalf of a voluntary emergency technician (EMT) for the Township of Lebanon because the employee did not report his work related accident within the 90 day period.

In this case, an emergency medical technician was injured while responding to a motor vehicle accident on November 18, 2008.  He did not notify anyone associated with the Township about this accident until February of 2010.  On appeal, the injured volunteer argued to the Appellate Court, that the Trial Judge had erred by failing to consider that his delay with seeking compensation was due to his unawareness of a causal link between the accident and the ultimate injuries that he sustained.  Mr. Adler argued that under these circumstances, the court of compensation should have tolled and the running of the notice statute until February of 2010, when his physician first informed him that his injuries were related to the November 2008 work injury.

The Appellate Division in affirming the Trial Judge’s decision held that the record supported the findings of the trial judge that a reasonable person facing the volunteer EMT circumstances would have been aware that he sustained a work related compensable injury on November 18, 2008.  This failure to give timely notice to his employer under these circumstances is legally untenable.

It is critically important that an employee involved in any type of work related incident that may possibly result in some type of bodily injury give notice of the incident to a supervisor or employer representative.  If possible, the employee should request that an incident report setting forth a brief description of the incident and the specifics of the physical injury be completed.

Many times an employee is not initially sure whether a work related accident will actually cause any permanent physical injury.  If following an accident an injury clears without the need for any such medical treatment “no harm, no foul”  however, if the injury becomes somewhat more disabling and requires medical treatment, by providing timely notice of the incident to a supervisor or employer’s representative, the employee’s workers’ compensation rights will have been fully preserved and protected.  Such notice must be given to the employer within 90 days of the date of the incident.

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New Jersey Workers’ Compensation: Appellate Division Upholds Dismissal of Worker’s Claim for Gross Negligence

By Gary E. Adams

April 11th, 2013

In a recent decision by the New Jersey Appellate Division, the Court re-affirmed the exclusivity section of New Jersey’s Worker’s Compensation Act, which provides that an injured worker can only pursue a civil lawsuit against his employer if there is “intentional wrong”. In New Jersey, an employee can avoid the exclusive remedy provision (known as the “workers’ compensation bar”) in the Worker’s Compensation Act only if the employer knowingly exposes the employee to a “substantial certainty of injury” and the injury sustained is not a “fact of life of industrial employment” which the New Jersey legislature intended the Worker’s Compensation Act to immunize. However, merely proving a high probability of injury or knowledge that injury or death could result is insufficient to avoid the exclusivity of the Worker’s Compensation Act.

In the matter of Fendt v. Abramson, the employee was working on a driveway paving job as a traffic flagger when he was struck by a vehicle.  He had been directed by his supervisor to direct traffic around the construction site.  He was directed to stand in the street with nothing more than a flag in his hand.  The employer later plead guilty to violating traffic safety laws. In addition, the employer conceded it had traffic safety equipment available, but did not use it. Plaintiff’s expert opined that plaintiff’s employer “knowingly exposed plaintiff to a risk that was substantially or virtually certain to result in harm.” At the close of discovery, the defendant employer was granted summary judgment on the basis that while its conduct may have been negligent, it was not an “intentional wrong.” The Appellate Division affirmed, noting that while the employer’s conduct may have been grossly negligent, there was no affirmative act taken by plaintiff’s employer that made the workplace significantly less safe for its employees.

TheNew Jerseyappellate courts have consistently limited the “intentional act” exception to the Worker’s Compensation Act. These decisions make it clear that even where employers are grossly negligent in exposing workers to extremely dangerous work environments, they are immune from civil lawsuits due to their conduct, and the injured worker is limited to his workers’ compensation remedy.

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New Jersey Workers’ Compensation and Wage Replacement Benefit

By Jeffrey S. Monaghan

March 7th, 2013

The New Jersey Workers’ Compensation Statute mandates a wage replacement benefit called “Temporary Compensation” when a treating doctor, authorized by the  workers’ compensation insurance carrier has ordered the employee not to work for more than seven days following an accident, while medical treatment is being provided for the work related injury.  Once the eighth day of lost time from work has been reached, the employer or their workers’ compensation insurance carrier must compensate the injured worker for lost wages retroactive to the first day the employee has been unable to work.  The temporary compensation is payable at a weekly rate equal to 70% of the employees normal weekly gross wages subject to a maximum of 75% of the statewide average weekly wages.

The injured worker’s entitlement to receive this wage replacement benefit continues for the period of time that the employee is under the authorized medical care of a doctor who has the employee out of work, or until the treating doctor has placed the injured worker at what is called Maximum Medical Improvement from the injury.

A common situation arises when an employee has sustained an on the job injury, which the treating doctor indicates disables the employee  from performing his or her full  job duties.   However, the treating doctor believes that the injured worker is capable of doing a light duty job if such work were available.  For instance, a worker employed as a licensed practical nurse sustains an on the job injury to her low back while lifting or moving a patient. The authorized treating doctor indicates that the injured worker is unable to perform her full job duties as a licensed practical nurse; however, she would be capable of working doing patient related paperwork/office work.  Under these circumstances, the employer has the choice of providing the injured employee with this “light duty work” or if the employer is unable to so accommodate the injured worker, then they must pay the worker the appropriate lost time benefits.

A common occurrence which often arises is when the injured employee is provided light duty work but the light duty work is less than their normal full time employment, or the employer pays the injured work less money to perform the light duty work than the injured worker was previously receiving in their full time employment.  The question then arises, as to whether the employer must pay the injured employee the difference between his full temporary compensation rate and the wages that injured worker is now receiving in their light duty position. Until recently, there was no clear case law specifically addressing this issue.  This past fall in the case of Jose Soto v. Herr’s Foods Incorporated the workers’ compensation trial judge specifically addressed this issue and held in his decision that the logical interpretation of the workers’ compensation statute NJSA 34:15—12 would require employers to remit the difference between the amount earned by the petitioner in their light duty work capacity and the amount to which he or she would be entitled by statute under a full  temporary compensation rate.

As a result of the trial judge’s decision in this case, there is now strong argument and legal precedent for what has long been advocated by attorneys representing injured workers. Namely, that when an injured worker is prohibited for a period of time in returning to his full time employment as a result of an admitted work related injury, if the employer is able to provide the employee with some type of light duty work, the employee cannot receive a rate of pay less than his full temporary compensation rate applicable at the time the employee sustained  the work related injury.

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Light Duty Rules in Workers’ Compensation

By Kendall W. Medway

March 1st, 2013

I often get asked about the “rules” that apply when a Petitioner is returned to work on light/restricted duty in a Workers’ Compensation matter.  As long as the employee has not yet reached maximum medical improvement, the employer has an affirmative duty to determine whether appropriate light duty exists.  This means not only that the job duties comply with the restrictions outlined by the doctor, but that the light duty job itself is a legitimate assignment.  In other words, an employer isn’t supposed to just stick the employee in a closet, sitting at a card table, for eight hours a day and call that light duty.  Recent case law also suggests that light duty is not appropriate if the worker makes less money while working (for example, because of restricted hours) than he/she would while receiving Workers’ Compensation benefits.

To recap, if an employer is forcing their employee to perform work activity that the doctor has told them not to do, if the employer has created a job out of thin air that normally doesn’t exist in their workplace, or if the employee is making less money while working light duty than while out of work on Workers’ Compensation, the light duty being offered is probably not “appropriate,” and the employer may be required to put them back out of work and back on Workers’ Compensation.

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Workers’ Compensation and Statute of Limitations in New Jersey

By Bruce P. Miller

February 20th, 2013

Although Workers’ Compensation law in New Jersey typically involves a Statute of Limitations of two years, there are exceptions.  When someone has sustained an injury in a work accident, the basic law requires that the case be filed within two years of the date of the accident.  This is similar to a case involving injuries sustained, for example, in a motor vehicle accident.  However, there are important differences.  If an employee is injured in a work accident and receives treatment authorized and paid for by the employer or its insurance company, or receives disability benefits from the employer or its insurance carrier, the formal case (the filing of a Workers’ Compensation Claim Petition) only has to be filed within two years of the last payment of disability or the last treatment received from the medical provider who was paid for by the employer or its carrier.  In other words, the case does not have to be filed within two years of the date of the accident; rather, it has only to be filed within two years from the last date of treatment or the last payment of disability.  Therefore, if the treatment that was paid for by the employer or its carrier extended for a period of two or three years, or disability benefits were paid for a period of two or three years following the accident, the Claim Petition need only be filed within two years from the date of that last payment.

When the Workers’ Compensation case deals with what is called an occupational injury rather than an accident, namely, that the injury was sustained as a result of day in and day out stress rather than one specific accident, a different Statute of Limitations applies.  This law says that the Workers’ Compensation case has to be filed within two years of the date that the injured worker knew, or should have known, that the injury was related to the job.   For example, if the person suffered an injury to his/her lungs as a result of inhaling dirt or fumes on the job, that person may not realize or appreciate that the lung condition is due to work until such time as he/she is told so by a treating doctor or by an attorney to whom the employee is referred.  In those instances, that employee is not deemed to have known nor should have known of the connection between the lung condition and work environment until told so and thus the case itself does not have to be filed until two years from the date that the opinion was given by a reliable source, such as a doctor or a attorney.

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New Jersey Legislature Proposes Statutory Cause of Action Against Insurers

By Gary E. Adams

February 7th, 2013

New Jersey Senators Nicholas P. Scutari and Jennifer Beck introduced legislation on January 8, 2013 that would statutorily provide a cause of action against insurers who act in bad faith.  This bill, S-2460/A-3710, is being called the “Consumer Protection Act of 2012.”  A similar version was proposed on September 19, 2011, S-3036, yet it was not cleared by the Senate Commerce Committee.  The bill would incorporate into statutory law aspects of New Jersey’s current case law, which recognizes private causes of action in first-party and third-party claims for bad faith by insurance companies which result in harm to their insured.

The Consumer Protection Act provides that a claimant, regardless of any action taken by the Commissioner of Banking and Insurance, may file a civil action for violation of the statute known as New Jersey’s Unfair Claims Settlement Practice Act. N.J.S.A. 17:29(B)-4(9).  The right to take action under the Statute would no longer be limited to state actors. A claimant can be an individual, corporation, association, partnership, or other legal entity that asserts a direct or assigned right to payment under the insurance policy.  The claim can be first-party or third-party.  The Statute outlines the acts that are considered bad faith including: misrepresenting pertinent facts or policy provisions, failing to acknowledge and act reasonably to communications with respect to claims, failing to implement reasonable investigation, and failing to make a good faith attempt to settle claims in which liability has been made reasonably clear.  N.J.S.A. 17:29(B)-4(9)

Common law provides that an insurance company is obligated to act in good faith.  Rova Farms Resort, Inc. v. Investors Insurance Co. of America, 65 N.J. 474 (1974), is the seminal case on what constitutes bad faith in third party actions.  In the Rova Farms decision, and others which have followed, the Court held that an insurer has a duty of good faith and fair dealing towards its insured.  A breach of this duty occurs from a failure of the insurer to act reasonably on behalf of its insured to protect the insured’s financial assets.  The insurer has a duty to accept a reasonable settlement demand that will protect the assets of its insured.  Factors which an insurer must consider include the anticipated range of a verdict should it be adverse; the strengths and weaknesses of all the evidence to be presented on either side so far as known; the history of the particular geographic area in cases of a similar nature; and a relative appearance, persuasiveness, and appeal of the claimant, the insured, and the witnesses at trial.

The proposed legislation would strip N.J.S.A. 17:29(B)-4(9) of a clause which required that prior to a suit being filed, the insurer must have committed or performed bad faith acts with such frequency as to indicate a general business practice.  In other words, there need not be any pattern of bad faith exhibited by an insurance company before a suit may be filed.

Under the proposed bill, in a third-party claim, if a claimant is successful and proves bad faith, they would be entitled to the full amount of damages that is determined in the final judgment, without any concern for the policy limits.  A claimant would also be entitled to prejudgment interest, reasonable attorney’s fees, and all reasonable litigation expenses from the date the action was filed.  In a first-party case, the claimant would be entitled to damages which are outside of the coverage provided by the policy – consequential damages.

In addition, punitive damages may be available to a successful claimant.  Punitive damages are only available when the insurer’s acts or omissions demonstrate, by clear and convincing evidence, actual malice or wanton and willful disregard of any person who foreseeably might be harmed by the insurer’s acts or omissions.

This Bill, if enacted, would finally afford claimants a clear course of legal action against an insurance carrier that has failed to fairly and expeditiously address valid claims.  Under current law, insurance carriers can unreasonably deny or delay claims without any real fear of legal or financial penalties for doing so.

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President Obama signs Medicare lien reform legislation

By Gary E. Adams

January 11th, 2013

President Obama has signed changes to the Medicare Secondary Payer Act as passed by the Congress.  These changes clarify the methods to be used in obtaining information from Medicare relating to payments made by them, and imposes time limits on Medicare to respond to requests for information.

For injured workers, these changes mean that there should be fewer delays in the resolution of their claims for work-related injuries due to Medicare’s historically slow responses to requests for information.  For workers’ compensation practitioners, this simplifies the process for obtaining information and gives them some assurance that Medicare cannot pursue claims for reimbursement beyond specified time limits.  Prior to the passage of this Act, Medicare could arguably pursue claims for reimbursement for an unlimited time.

The revisions to the Act include:

Section 201 – Determination of Reimbursement Amount through CMS Website

This section is effective nine (9) months after it is passed into law which is the deadline that CMS must promulgate final regulations to carry it out. It applies to both workers’ compensation and liability claims. The new law outlines a process by which Parties may request a demand letter from Medicare that is good for a period of time before disposition of case. It requires CMS be provided notice within 120 days of an expected or reasonably expected date of settlement, and the expected date of settlement. CMS has 65 days to produce a demand letter, but can extend it another 30 days. After the appropriate time period has lapsed, the Parties can retrieve the Demand information from the website and rely on it so long as the settlement occurs within 120 days of notice and 3 days from the last download of the website. This part also includes a mini-dispute process. If elected, the Secretary’s determination is final and not subject to appeal.

This procedure is an alternative and does not replace the procedure presently provided for by CMS and its contractors. If the process is not followed correctly, the default is what occurs today. No doubt there are consequences as CMS will work hard to mitigate its exposure.

This Section also provides for a right of appeal. It is a new right granted to the insurance carrier that can be taken without consent of the Medicare beneficiary, only notice is required to the Medicare beneficiary. CMS is required to promulgate regulations presumably within nine (9) months. However, the legislation does create potential jurisdiction in Federal Courts for insurance carriers that does not exist today.

Section 205 – Statute of Limitations

This section of the law is effective six (6) months after enactment.  It applies to workers’ compensation, liability and no-fault claims.  The law amends actions brought by the U.S. pursuant to 42 U.S.C. §1395y(b)(2)(B)(iii) and limits actions to enforce reimbursement claims and penalties to three (3) years from Mandatory Insurance Report (Section 111) report of a Settlement, Judgment, Award or Other Payment.  As it exists today, the limitations period is unclear as some Courts have made varying interpretations of the general limitations clause and its applicability to the Medicare Secondary Payer Act.  The new law sets a clear standard, but to trigger protection, the claim must be electronically reported under 42 U.S.C. §1395y(b)(8).  Cases exempt by CMS establish reporting thresholds presumably will follow the general limitations period as interpreted by case law.

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