Topic:
WORKERS' COMPENSATION;
Location:
WORKERS' COMPENSATION - COSTS;

OLR Research Report


The Connecticut General Assembly

OFFICE OF LEGISLATIVE RESEARCH




February 3, 1994 94-R-0206

TO:

FROM: Judith S. Lohman, Principal Analyst

RE: Workers' Compensation Costs in Connecticut and Surrounding States

You asked us to compare workers' compensation benefits in Connecticut with benefits in New York, Massachusetts, and Rhode Island.

SUMMARY

Although generalizations are somewhat difficult, a comparison of workers' compensation benefits in Connecticut with those of the three surrounding states shows that Connecticut benefits in almost all categories are higher than in Massachusetts and Rhode Island and comparable or a little lower than in New York.

Connecticut has higher maximum weekly benefits than any of the other three states, which tends to give a broader range of workers better wage replacement benefits than New York even though New York has a higher benefit rate. Our maximum awards for permanent partial disabilities are about 30% less than New York's and Rhode Island's in terms of number of weeks but our higher maximum weekly benefit means that maximum dollar awards are three to four times higher here than in Rhode Island and, in some cases, only about 10% less than New York's.

Connecticut's restrictions on medical benefits for managed care plans are comparable to those in the other states, as are the types of injuries we disqualify and the benefit offsets we impose.

This report compares the four states in three major categories of workers' compensation benefits: wage loss benefits, permanent partial disability benefits, and medical benefits.

Wage loss benefits provide replacement income to (1) workers temporarily or permanently unable to work because of a work-related injury ("total disability benefits"), (2) workers who cannot earn as much as they could before because of an injury ("partial disability benefits"), and (3) dependents of workers who are killed on the job ("fatality" or "dependent survivors' benefits"). All of these benefits are tied to the wages the injured worker earned when he was hurt. States also impose maximums on the weekly wage loss benefits that are usually tied to average wages in the state for a given year.

"Specific indemnity" or "permanent partial disability benefits" compensate an injured worker for permanent loss of, or loss of use of, parts of his body. Although permanent partial disability benefits are almost always tied to the injured workers' pre-injury wages, unlike wage loss benefits, payment of permanent partial benefits is not generally contingent on the worker's suffering actual income loss from the injury. Instead, the number of weeks of benefits to be paid for various permanent disabilities are set out in state statutory "schedules" and a worker with a permanent injury receives a share of the scheduled amount in proportion to the percentage rating of permanent disability in the corresponding part of his body (eg. 50% of the back, 20% of the leg, etc. ).

Most states, though not Connecticut, also allow workers' compensation commissioners to award benefits for injuries to parts of the body not listed in the schedules ("unscheduled injuries"). In Connecticut, as a result of the 1993 reforms, all permanent partial disabilities are scheduled. Permanent partial benefits are frequently paid in a lump sum.

The last major category of benefits is medical expenses. Employers are liable for the cost of the employee's medical treatment occasioned by the injury or for his burial expenses in the event he dies. Medical benefits may have various conditions attached to them. In the past several years, many states, including Connecticut, have allowed employers to institute managed care plans and other cost control measures that serve to limit injured employees' medical choices under workers' compensation laws.

This report compares benefits in all three categories in Connecticut, Massachusetts, New York, and Rhode Island. Tables 1A through 1C show the four states' wage loss benefits, Table 2 shows the maximum benefits for selected permanent partial disabilities and for unscheduled injuries, and Table 3 compares major medical benefits. All four states have recently adopted significant changes in their workers' compensation laws: Connecticut in 1991 and 1993, Rhode Island in 1990, Massachusetts in 1991, and New York in 1993. These changes are reflected in the tables below.

WAGE LOSS BENEFITS

Connecticut's rate for wage loss benefits is generally comparable to that of the surrounding states. New York's benefit rate is the highest of the four states since a rate of two-thirds of gross pay yields a higher weekly benefit than the 75% of net pay rates used in Connecticut and Rhode Island. Massachusetts has the lowest disability rate at 60% of gross pay. Its fatality benefit rate the same as New York's: 66 2/3% of gross pay.

Even though Rhode Island's rate is the same as Connecticut's, it could produce a higher or lower benefit in some cases. Rhode Island excludes overtime from the wage base on which the benefit is figured, thus lowering the benefit for workers' who earned a lot of overtime pay. But it also adds $ 15 per week for each dependent child to a person's total disability benefits and $ 20 per week per child to fatality benefits.

To illustrate the effects of these various rates and dependency allowances, consider a married worker with two children and a single worker, both earning $ 400 per week in gross pay. If he were totally disabled, the married worker would get a weekly workers' compensation benefit of $ 260. 72 per week in Connecticut, about $ 290 per week in Rhode Island, $ 266 a week in New York, and $ 240 per week in Massachusetts. The single worker would get the same benefit as the married worker in New York and Massachusetts, but would get only $ 240. 28 in Connecticut and Rhode Island.

Although Connecticut's weekly benefit rate is slightly lower than New York's, many Connecticut claimants still receive higher benefits because Connecticut has by far the highest maximum weekly benefit rate of any of the surrounding states: $ 638 per week for total disability and fatality benefits and $ 529 for partial disability benefits versus $ 565 per week in Massachusetts, $ 463 per week in Rhode Island, and $ 400 per week in New York. In addition, workers can generally collect partial disability wage loss benefits longer in Connecticut than in the other states. Only New York does not put a statutory time limit on the receipt of such benefits.

Massachusetts and Rhode Island include automatic cost of living adjustments in their wage loss benefits. Connecticut and New York do not.

Tables 1A through 1C below compare the four states' wage loss benefits by category.

Table 1A

Total Disability Benefits

New Rhode

Connecticut York Massachusetts Island

Weekly 75% of 66 2/3% 60% of gross 75% of

Rate take-home of gross pay, plus $ 6 take-home

pay pay per dependent pay, ex-

if weekly cluding

benefit is overtime

less than

$ 150

Maximum 100% of $ 400 100% of 100% of

Benefit state per week state state

(temporary average average average

and perman- weekly wage weekly weekly

ent dis- ($ 638) wage wage

abilities) ($ 565) ($ 463) plus

$ 15 for

each depen-

dent child

Maximum Length of Length 156 Length

Duration- disability of dis- weeks of dis-

Temporary ability (max. = ability

Total $ 141,250)

Maximum Length of Length Length Length

Duration- disability of dis- of of dis-

Permanent ability disability ability

Total

Table 1A (Continued)

New Rhode

Connecticut York Massachusetts Island

COLA No No Yes, two- Yes, annual

year wait (tied to

(tied to CPI)

increase in

state average

weekly wage;

increase

limited to

lesser of

CPI or 5%).

Table 1B

Partial Disability Benefits

New Rhode

Connecticut York Massachusetts Island

Weekly 75% of 66 2/3% 60% of 75% of

Rate the dif- of differ- differ- differ-

erence in in gross ence ence in

average weekly in gross average

weekly wages weekly weekly

take-home before wage take-home

pay earned and earned pay, exclud-

before and after before ing over-

after the injury and after time, earn-

injury the ed before

injury and after

injury.

Maximum 100% of $ 400 per 75% of 100% of

Benefit state week same state

average worker's average

weekly total weekly

production disabil- wage

wage ($ 529) ity bene- ($ 463)

fit.

Benefits

may be

reduced

if earn-

ings plus

benefits

are more

than

twice the

state

average

weekly

wage

($ 1,130).

Table 1B (Continued)

New Rhode

Connecticut York Massachusetts Island

Maximum 520 None 364 312

Duration weeks weeks - weeks -

may be more if

extended injury is

to 520 65% or more

if im- impairment

pair- of whole

is 75% body

or more

of whole

body

COLA No No Yes, No

three-

year

wait

Table 1C

Fatality Benefits

New Rhode

Connecticut York Massachusetts Island

Weekly 75% of 66 2/3% 66 2/3% 75% of

Rate take-home of gross of gross average

pay weekly weekly weekly take-

wage wage, home pay,

plus excluding

$ 6 overtime,

per plus $ 20

week per week

for for each

each dependent

depen- child under

dent 18 (or 23

child if full-time

if student) benefits less than

$ 150 per

week

Maximum 100% of $ 400 per 100% of 100% of

Benefit state week state state

average average average

weekly weekly weekly

wage wage wage

($ 638) ($ 565) ($ 463)

Overall

max. =

250 times

state aver-

age weekly

wage at time

of injury

($ 141,250).

Table 1C (Continued)

New Rhode

Connecticut York Massachusetts Island

Maximum Widow/ Widow/ Widow/ Widow/

Duration Widowerhood; Widower- widower- widower-

children hood; hood hood;

until 18 children while children

(22 if until 18 not until

full-time (23 if fully 18 (23

student) full-time self- if full-

student) sup- time

port- student)

ing;

children

until 18

Burial $ 4,000 Actual $ 4,000 $ 5,000

benefit expenses

according

to cost

schedule

prepared

by Workers'

Compensation

Court

COLA No No Yes, 4% annual

same

as

total

disabil-

ity

PERMANENT PARTIAL DISABILITY BENEFITS

Even though PA 93-228 cut maximum permanent partial disability benefits in Connecticut by a third for most disabilities, maximum awards in Connecticut are still far higher than those in Massachusetts and Rhode Island. Connecticut's maximum awards are generally, but not always, less than those in New York. New York has a lower maximum benefit rate than Connecticut ($ 400 per week versus $ 529) but tends to award more weeks for the same injury. Massachusetts pays a flat amount for each injury regardless of the injured worker's wages. Rhode Island's weekly amount is both virtually flat and very low (a minimum of $ 45 and a maximum of $ 90) so its maximum permanent partial awards are also much lower than Connecticut's and New York's despite awarding the same or similar numbers of weeks.

All four states award separate compensation for disfigurement. Rhode Island has the most liberal criteria and the highest maximum number of weeks but Connecticut has the highest maximum dollar amount for awards in this category.

Table 2 below shows the maximum awards in each state for selected scheduled injuries, for unscheduled injuries, and for scars and disfigurement.

Table 2

Compensation for Permanent Partial Disabilities

Scheduled Injuries

Rhode

Connecticut New York Massachusetts Island

Rate 75% of 66 2/3% State 50% of

average of gross average average

weekly weekly weekly weekly

take- pay wage take-

home pay (max. = ($ 565) home

(max. = $ 400) pay -

$ 529) Minimum=

$ 45

Maximum=

$ 90

100% Loss

or Loss of

Use of:

Major

arm at $ 110,032 $ 124,800 $ 24,295 $ 28,080

shoulder (208 wks) (312 wks) (43 wks) (312 wks)

Major $ 88,872 $ 97,600 $ 19,210 $ 21,960

hand (168 wks) (244 wks) (34 wks) (244 wks)

Leg at $ 81,995 $ 115,200 $ 22,035 $ 28,080

Hip (155 wks) (288 wks) (39 wks) (312 wks)

Table 2 (Continued)

Scheduled Injuries

Rhode

Connecticut New York Massachusetts Island

Foot $ 66,125 $ 82,000 $ 16,385 $ 18,450

(125 wks) (205 wks) (29 wks) (205 wks)

One Eye $ 83,053 $ 64,000 $ 22,035 $ 14,400

(157 wks) (160 wks) (39 wks) (160 wks)

Unscheduled Injuries

Maximum No unsche- None $ 45,200 $ 144,456

duled (Max. = (312 wks)

injuries. 80 times

Maximum for the state

most serious average

scheduled weekly

injury = wage at

$ 275,080 date of

(520 weeks) injury)

Scarring and Disfigurement

Eligible Head, face Serious Face, Permanent

Scars neck or face, neck, scars

affecting head, or hands

employ- neck.

ability Upper

torso

if

affects

employ-

ability

Maximum $ 110,032 $ 20,000 $ 15,000 $ 45,000

(208 wks) (500 wks)

MEDICAL BENEFITS

All four states have some managed care requirements. New York's were adopted only in December 1993. Connecticut and Rhode Island also use medical fee schedules. Doctor selection limits are similar in the four states. Major medical provisions are summarized in Table 3.

Table 3

Medical Benefits

Rhode

Connecticut New York Massachusetts Island

Medical Employer Employee Employer Subject

Benefits managed selects or insurer to medi-

care plan from an preferred cal fee

or subject approved provider schedule

to medi- list; organiza- set at 90%

cal fee managed tion, if of reason-

schedule care plans available. able and

set at allowed customary

74% of as pilot charges.

reason- project

able and to cover

customary 15% of

charges for state

physicians labor force

and 70% of in first

physician year (1994)

rate for and 24%

nonphysicians. in second.

Expires

12/31/97

unless

extended.

Table 3 (Continued)

Rhode

Connecticut New York Massachusetts Island

Doctor Employee Employee Employee Employee

Selec- selects selects selects; chooses

tion from from must use initial

approved approved PPO pro- provider;

list; list; vider, if if employer

if employer managed employer has approv-

has approved care or insur- ed PPO,

managed care restric- er has when em-

plan, must tions approved ployee

use plan allowed. plan. changes,

doctor. must change

to PPO

doctor.

DISQUALIFICATIONS AND OFFSETS

The four states place various statutory restrictions on who may receive workers' compensation and also offset benefits in various ways for other income received.

Connecticut

Workers' compensation total disability benefits must be reduced by any amount the disabled worker is entitled to receive in Social Security retirement benefits.

The following injuries and deaths are not compensable:

1. injuries caused by use of alcohol or controlled drugs unless the drugs were prescribed during medical treatment or taken as part of research project directed by a doctor or pharmacologist;

2. injuries suffered by employees who do not live in Connecticut unless their employment contracts are to be performed primarily in this state or their employers have business facilities here at which the employee spends at last half of his working time;

3. injuries received through voluntary participation in activities that are mostly social or recreational, even if the employer pays all or part of the activity's cost;

4. mental and emotional injuries that do not arise out of physical injuries or occupational diseases; and

5. mental and emotional injuries resulting from personnel actions, including transfers, promotions, demotions, and terminations.

Rhode Island

An employee is not entitled to workers' compensation for any period during which he was employed or found employment at an average weekly wage equal to or greater than he was earning when injured. This disqualification applies regardless of any existing agreement or decree to the contrary.

No one may collect workers' compensation benefits he is in prison after being convicted of a crime.

No compensation is available for an injury or death stemming from an employee's wilful intention to kill or injure himself, or from the employee's intoxication or use of illegal drugs.

Injuries or deaths occurring during, or occasioned by, voluntary participation in employer-sponsored social or nonprofessional athletic activity are not compensable. Neither are injuries or deaths occurring from voluntary participation in an employer-sponsored car pool, vanpool, commuter bus service, or other rideshare program. But the law does not bar an employee from suing his employer as a result of injuries occasioned by such activities if there was tortious misconduct.

Massachusetts

An employee who is injured by his own serious and wilful misconduct is not eligible for workers' compensation but his dependents may still be eligible if the employee's conduct leads to his death.

Mental and emotional disabilities arising principally out of bona fide personnel actions are not compensable unless the employer intentionally inflicts emotional harm.

Unless specifically allowed by law, employees cannot receive workers' compensation for any period during which they earned wages.

Anyone who is at least 65 years old, has been out of the labor force for at least two years, and is eligible for Social Security retirement benefits or retirement benefits under a public or private pension plan at least partly paid for by an employer is presumed to be ineligible for workers' compensation total and partial disability wage loss benefits. To receive these benefits, such an employee must prove, other than by his own or his family members' uncorroborated testimony, that but for his injury, he would have remained active in the labor market.

New York

Fatality benefits are offset for a percentage of the spouse's share of any Social Security survivor's benefits. The offset ranges from 5% to 50% of the Social Security benefit, depending on the deceased's average weekly wage. Subsequent increases in Social Security benefits are disregarded.

Claimants who are convicted of crimes and sent to prison have their benefits suspended.

The following injuries and deaths are not compensable:

1. injuries or deaths caused solely by an employee's intoxication from illegal drugs or alcohol while on duty;

2. injuries or deaths resulting from the injured employee's intention to injure or kill himself or others;

3. injuries or deaths from voluntary participation in an off-duty athletic event unless the employer required, compensated, or sponsored the activity; and

4. on or after July 1, 1990, any injury that is solely mental and based on work-related stress that results from an employer's lawful and good-faith personnel action, such as an evaluation, transfer, demotion, termination or other disciplinary action.

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