Monday, June 11, 2012

FL Advance Statute Getting More Notice

Florida has an interesting issue going on that is frustrating the workers' compensation judiciary, but may not be that big of a deal in the grand scheme of things - still, the prospect of free money, or as Dire Straits penned in the 70's, "Money for Nothing," leaves a bad taste with many.

At issue is Florida Statute 440.20(12)(c)(2), which was interpreted by the state's 1st District Court of Appeals in 2010, requires payment of a requested advance of up to $2,000 to any employee in the state, from whomever they request it, as long the person seeking the advance has either not returned to the same or similar employment following an alleged injury or has suffered a substantial loss of earning capacity.

The statute specifically states:
"An advance payment of compensation not in excess of $2,000 may be ordered by any judge of compensation claims after giving the interested parties an opportunity for a hearing thereon pursuant to not less than 10 days' notice by mail, unless such notice is waived, and after giving due consideration to the interests of the person entitled thereto. When the parties have stipulated to an advance payment of compensation not in excess of $2,000, such advance may be approved by an order of a judge of compensation claims, with or without hearing, or informally by letter by any such judge of compensation claims, or by the department, if such advance is found to be for the best interests of the person entitled thereto."

The case interpreting 440.20(12)(c)(2) was Lopez v. Allied Aerofoam, No. 1D10-1444, 10/18/10.

In that case Rocio Lopez filed a workers' compensation claim for a repetitive trauma injury to her left shoulder, left arm and left hand. She alleged that the trauma occurred while welding foam pieces, and pressing the pieces together for her employer, Allied Aerofoam.

Lopez asked the judge of compensation claims for a statutory advance payment of compensation, seeking less than $2,000. The judge denied the request after determining that an advance could not be awarded in a contested case. Lopez appealed.

The 1st District Court of Appeal reversed stating that the section allows a judge of compensation claims to award an advance payment of benefits not larger than $2,000 if the claimant can show:
  • Failure to return to employment at the same rate of pay.
  • A substantial loss of earning capacity.
  • An actual or apparent physical impairment.
  • The judge must also consider the interests of the person who has requested the advance. 
  • The statute does not require a showing that the injured worker will actually receive any benefits in the future, and it does not limit the advances to cases where the claimant has established the compensability of the injury. 
For many years, the cash advance legislation was never really the subject of much litigation and wasn't often used. But after law changes in 2003 that made claimants responsible for paying for their own independent medical exams and experts, Florida workers' compensation judges say they're now seeing more advance requests. And the weaknesses in the law is becoming more apparent.

Deputy chief judge of the Florida Office of Judges of Workers' Compensation Claims David Langham told WorkCompCentral that the process now has become largely administrative for judges because the judge must only consider the "interests" of an entitled applicant and under the law the claimant only need show he would be "better off" with the money.

"Presumably most anyone would be," Langham wrote in an order approving the advance in a 2010 over-payment case where the claimant had already spent $77,800 on vehicles, a boat, a tractor and a horse, among other things.

The real problem is not the amount of money but who has to pay it and then recoup the advance from subsequent awards. But the sum is so small that it might cost more to litigate responsibility than to just accept payment as a cost of doing business. This contributes to the problem because as these payments become more administrative and employer/carriers just pay them, then payments end up outside of "the system" so they can not be tracked to see if there is a trend.

At least anecdotally these payments are on the rise. To what extent they contribute to the cost of indemnity is, apparently, unmeasured within the system. So it is either much ado about nothing, or points to a possible growing cost driver.

There's always something interesting going on in workers' compensation...

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