What Is Permanent Disability?

As a business owner, you take every measure possible to reduce the chance of injury to your employees as much as possible.  Unfortunately, no matter how much you strive for an injury-free work place, it is overwhelmingly likely that an injury will eventually occur.  If during the course and scope of employment, your employee sustains an injury, he or she will likely be entitled to receive workers’ compensation benefits.  The type and percentage of disability is a central component of disability claims.

The California Department of Industrial Relations defines permanent disability as “any lasting disability from your work injury or illness that affects your ability to earn a living.”  If an employee is permanently disabled, he or she will be entitled to permanent disability benefits, regardless of whether that injury renders him or her unable to work in the future.  In most cases, permanent disability is determined through Whole Person Impairment (WPI).  This will be determined after the employee is examined by his or her doctor or a Qualified Medical Evaluator.  The doctor or QME will determine the percentage of impairment level, meaning how the injury will impact the employee in his or her ability to work.  The QME will use the standards established by the American Medical Association in making this determination.  The impairment level will then be reduced to a percentage, using a formula which also takes into account the employee’s age and occupation. In cases involving psychological injuries, the injury must either be categorized as catastrophic or the employee must have witnessed a violent crime in the course and scope of employment.  Taking all of these elements into account, the disability evaluator or the judge will then use the statutory formula and decide the amount of permanent disability the employee is entitled to receive.  The amount the employee will be entitled to receive will also be impacted by the date of the injury in addition to the wages paid to the employee before he or she was injured.  The permanent disability benefits typically begin being paid after the end of temporary benefits and the doctor indicates that the injury has “stabilized.”  This means that the injury will not heal or improve any more.

If you have questions about disability payments to your employees, contact us today.  We look forward to discussing workers’ compensation with you and what we can do to help protect you.

Settling a Claim for Permanent Disability

It is increasingly common for law suits to be settled out of court.  This also holds true with workers’ compensation cases.  The workers’ compensation system is uniquely suited for settlement before a case ever sees a court room, and employers should keep in mind the benefits and potential risks of settlement.  Permanent disability presents unique issues in terms of settlement.

There are two main ways to settle a permanent disability claim.  The first is called “compromise and release.”  This method means that the employee agrees to take a one-time lump sum payment in exchange for agreeing that the case is forever settled.  After the compromise and release settlement is accepted by the workers’ compensation judge, the employee is then directly responsible for any and all future medical expenses.  No additional claims can be made for reimbursement through the workers’ compensation system for the injury.  An employee will often choose this option if he or she also has health insurance that would assist with medical costs.  The other type of settlement is called “stipulation with request for award.”  In this type of settlement, the employer and employee come to an agreement about the type of injury, the extent of the injury, and the medical care that is required for treatment.  The employee then receives periodic payments based on the degree of injury that the parties have already agreed to.  In addition to the periodic payments, the employee may still seek to have his or her medical expenses reimbursed through the workers’ compensation system in the future.  It is less common for employees to choose this type of settlement, however it is often required if the employee still works at the employer with the same insurance company

Employers should also be aware of some of the wrong reasons to settle a claim, or the wrong time to settle a claim.  Especially for permanent disability, it is not appropriate to finalize a settlement when it is not completely certain that the employee’s disability has become permanent and stable.  The employer should carefully scrutinize medical records to make sure that an employee’s injury is now indeed stable.  An employer should also avoid the temptation to settle a claim just to get it out of the way.  A claim is stressful for any employer, but it is important to make sure that a claim is valid before agreeing to pay permanent disability benefits.

If your business is facing a workers’ compensation claim, you need an experienced attorney to help you examine your settlement and trial options.  Contact us today at (714) 516-8188 for a consultation to discuss your business and your options.

What is Permanent Disability?

When an employee sustains a work-related injury, he or she may be entitled to receive payment from his or her employer through the workers’ compensation system.  In California, the workers’ compensation system is a no-fault system.  This means that the employee does not have to prove that the injury was the fault of the employer before being entitled to compensation.  The type, amount, and duration of workers’ compensation benefits that an employee may be entitled to is partly governed by whether the injury results in a permanent disability.

A permanent disability is defined as any lasting disability from an employee’s work-related injury or illness that affects the employee’s ability to earn a living.  In the event an employee sustains a permanent disability, he or she will be entitled to permanent disability benefits even if he or she can return to work.  In order to be determined to have a permanent disability, the employee must submit to a medical examination.  The doctor will decide if the employee has a permanent disability.  The doctor will wait until your injury has stabilized and is not likely to worsen or improve before evaluating the permanent disability.  The term for this state is either “permanent and stationary” or “maximal medical improvement.”  Once the employee’s injury reaches this state, the doctor will send a report to the insurance claim administrator reporting whether the employee has a permanent disability, and whether that disability is, in fact, work-related.  The doctor will decide how much of the permanent disability is attributable to the work-related incident, and how much is attributable to any pre-existing conditions.  The doctor will also write a report about the employee’s impairment, which refers to how much the injury actually affects the day-to-day activities of the employee.  The doctor will assign a number to the impairment, which is then plugged into a special calculation in order to calculate the percentage of disability.   Whole Person Impairment generally means how much the impairment will affect the employee’s ability to function in the future.  The employee’s age and occupation will also affect the calculation, as well as diminished future earning capacity, for injuries incurred after January 1, 2013.  The disability will be stated as a percentage, which will determine a specific dollar amount the employee will receive.  After the amount is calculated, an award of benefits will be granted, but must first be approved by a workers’ compensation judge.

Calculating and awarding permanent disability is complicated, and you need an experienced attorney working with your business through this process.  If one of your employees may be permanent disabled as a result of a work-related injury, contact us today at (714) 516-8188 to discuss it.

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