This section of my Web site is dedicated to a discussion of concurrent receipt of workers' compensation and Social Security/Medicare/Medicaid type benefits as well as implications on the settlement of a workers' compensation claim when other collateral benefits are involved. Part I of this 6 part series follows. Parts 2-6 will be published at an estimated bi-monthly basis. For additional information the reader is directed to Workers' Compensation After Reforms-Second Edition published by Atlantic Law Book Company, West Hartford, Connecticut (860-231-9300).

Requests to draft settlement documents so as to limit the effect of lump sum settlements of workers' compensation cases on Social Security and/or Medicare/Medicaid benefits or other inquires on this topic may be made by contacting the Law Offices of Angelo Paul Sevarino at 860-687-1322 or WCLAWYER@aol.com. The DIB Input Sheet can be downloaded by clicking the "DIB Form" button above.

An Introduction To A Rubik Cube!

In order to properly draft language in any workers' compensation settlement the practitioner must have a working knowledge of Social Security-Supplemental Security Income, Medicare-Medicaid, Elder Law and Workers' Compensation statutes and regulations. Note that in Workers' Compensation the client is referred to as the "claimant", in Social Security matters the "wage earner" and in Medicare/Medicaid the "beneficiary". Throughout this material only the term Claimant will be used. Additional general information is available from the Social Security Administration (SSA) 24 hours a day by calling 1-800-772-1213. The TTY/TTD (for the hearing and speech impaired) toll free number is 1-800-325-0778. Information is also available over the Internet at www.ssa.gov. In addition, Health Care Financing Agency (HCFA) (Medicare) information can be found at www.medicare.gov or by calling 1-800-368-1019, TTY/TTD toll free number 1-800-537-7697. Internet information on workers' compensation can be found at the Connecticut Workers' Compensation Web-Site at www.state.ct.us.

The process of drafting a workers' compensation settlement agreement or Stipulation where the Claimant is concurrently on or eligible for collateral benefits such as Social Security disability (DIB), Supplemental Security Income (SSI), Medicare, Medicaid, group health/disability insurance or other public disability benefit is attune to solving a Rubik Cube. If you twist it one way it looks good, however, upon further review the other sides have problems. Consider the following:

• if you minimize or eliminate the offset impact a workers' compensation Stipulation has on collateral Social Security benefits do you negatively impact the Claimant's eligibility or continued eligibility for Medicare/ Medicaid?
  
  
• if you draft the language in a workers' compensation Stipulation one way to take advantage of Social Security/Medicare-Medicaid statutes and regulations will you impact how the Claimant's public or private pension board calculates the Claimant's pension or impact the Claimant's eligibility for or continued coverage under any private or public short/long term disability or health coverage?
  
  
• does receipt of workers' compensation benefits whether past, present or future now put the Claimant in an overpayment/repayment situation with the Social Security Administration or Health Care Finance Agency

Workers' compensation practitioners should know that the applicable administrative guidelines for calculating workers' compensation or public disability benefit¹ offsets to DIB benefits are found in the Program Operations Manual System commonly referred to as the "POMS". Courts have stated that the POMS may be persuasive. When dealing with issues involving workers' compensation offset, the POMS is an essential source. Reference must also be had to various Regulations and SSA Acquiescence Rulings. Offsets were first implemented with DIB onset dates after June 1, 1965 and DIB month of entitlement after December 1965.

What follows is a general overview of some important areas the practitioner must consider when dealing with these issues. Emphasis will be on DIB benefits rather than SSI as DIB benefits are the most common concurrent benefits received by a workers' compensation Claimant. Because the areas of workers' compensation, social security and elder law are all unique onto themselves this material cannot possibly delve into all the nuances that exist in these areas. Rather the materials aim to make practitioners aware of the pitfalls that exist due to the crossover implications of workers' compensation Stipulations when collateral benefits are involved.

The Initial Client Interview

A graphic flowchart on the interplay amongst Social Security Title II disability, Supplemental Security Income and Medicare/Medicaid is shown in Table I. By use of this table the practitioner can obtain a very quick review of whether his or her client's settlement of a workers' compensation claim might impact Social Security or Medicare/Medicaid benefits.

The practitioner must attempt to coordinate all benefits payable to the Claimant as a result of his or her loss of wage earning capacity or physical impairment. These benefits could derive from workers' compensation, DIB, SSI, Medicare/Medicaid, private short or long term disability contracts, state or municipal disability plans, private or public retirement plans, Americans With Disability Act claims, wrongful discharge actions, or civil personal injury actions. The receipt of any one of these benefit types may affect entitlement to another type of benefit and certain offsets, reductions and coordination of benefit provisions must be taken into consideration. It is certainly acceptable to have the Claimant represented in these disciplines by one or more lawyers, however, that does not eliminate both the professional and ethical obligation of the respective lawyers to insure their work product does not negatively impact the Claimant's other potential benefits.

At the initial client interview the attorney must ask the client whether s/he has filed (or make a determination of whether the Claimant is eligible to file) any other claim for benefits on the basis of the illness, injury, impairment, or disability claimed to arise from the work related injury or illness. Any benefit that may result in a SSA offset must be disclosed to SSA. The law requires disclosure, and the failure to disclose may expose the Claimant to overpayment reimbursement obligations. If voluntary agreements or other orders or awards have been issued in the workers' compensation case the practitioner shouldsubmit them with the Claimant's DIB/SSI application. Should SSA then overlook this evidence the practitioner may later be able to request a waiver of any overpayment because of a failure by SSA to properly calculate the offset. Likewise, disclosure to other collateral benefit administrators such as group health or disability plans should be made.

Equally important is to advise the Claimant at the beginning of his or her workers' compensation claim about the possibility of offset to existing as well as future benefits and its affect on any Social Security or other disability insurance benefits as well as its affect on any Medicare/Medicaid or other health insurance benefit.

The practitioner should from the opening of the workers' compensation claim be considering language to incorporate into any future settlement agreement or Stipulation that will minimize or eliminate the possible effects of offset on the Claimant's benefits. While the Claimant receives weekly workers' compensation and monthly DIB benefits, there is little, if any, room for mitigating the impact of offset. The opportunity for craftsmanship only occurs when drafting the Stipulation. Failure to advise the Claimant of possible offset implications may constitute malpractice!

It is imperative that the Claimant makes an informed consent when entering into the Stipulation. This is a two way street. The Claimant is entitled to know and the practitioner has the obligation to inform the Claimant of the impact, both positive and negative, the settlement will have on his or her collateral benefits and to insure that the Claimant understands what s/he is doing. The practitioner should have this dialogue reduced to writing and documented in his or her file should the Claimant later return post settlement with questions concerning why his or her monthly DIB/SSI benefit was reduced or why Medicare/Medicaid is not paying for medical expenses. If informed consent cannot be documented the next call may have to be to the practitioner's malpractice carrier.

Who Is Eligible for DIB, SSI, or Workers' Compensation Benefits?

As a general rule DIB and SSI benefits are Social Security benefits for seriously disabled workers. An individual can be an injured worker with a disability under workers' compensation and not be eligible for either DIB or SSI and vice versa.

The primary eligibility difference between DIB and SSI benefits is that eligibility for DIB depends on credits for work performed while eligibility for SSI depends on financial need. A disabled person may be eligible to receive both DIB and SSI benefits if the person's DIB benefits are low and the person meets other SSI eligibility requirements.

To be eligible for workers' compensation the Claimant must have suffered a work related injury or illness, which arose out of and in the course and scope of his or her employment. In order to be considered disabled the Claimant must have been out of work at least three days. There is no waiting period to qualify for medical coverage under workers' compensation assuming the Claimant has an otherwise compensable injury or illness.

What Is Supplemental Security Income SSI?

SSI was established in 1974 for the purpose of providing income to disabled individuals who meet four (4) basic requirements:

1. under the age of 65, blind or disabled; and
   
   
2. U.S. citizen or a qualified legal resident alien; and
   
   
3. within income limits; and
   
   
4. within asset limits.

There is no offset of workers' compensation benefits against SSI benefits. However, workers' compensation benefits are counted as unearned income in calculating SSI benefits. For SSI benefits, there is a base income/asset test that an individual with no other income must meet. Other income that an individual has (and this can include workers' compensation benefits) reduces the amount of SSI, which an individual can receive or may make the Claimant ineligible.

Workers' compensation benefits payable on a periodic basis e.g. weekly are deemed income in the month that it is received. Lump sum workers' compensation benefits are likewise income in the month received and to the extent that they conserve resources in subsequent months eligibility for SSI in all likelihood will be eliminated. Unfortunately, SSI does not pro rate a lump sum settlement and it is very unlikely that the practitioner can maintain SSI eligibility upon settlement of a workers' compensation claim until those settlement proceeds are used up.

The areas of SSI as well as Medicaid are dealt with briefly in this and subsequent articles, as this area is the subject of complex regulations and statutes. The advice of an experienced practitioner in the field of Elder law should be consulted for those less experienced practitioners who have questions in this area.

What Are Social Security Disability Title II DIB Benefits?

To be eligible for DIB benefits the Claimant must not only have the requisite work credits or "earnings" and have earned them during a specific period of time but the Claimant also must be "disabled".

To determine whether the Claimant meets the Social Security earnings test the practitioner must determine if the Claimant has worked, in a covered employment, for five (20 credits) out of the last 10 (40 credits) years before becoming disabled (note that in the past the term credit was referred to as quarters). If so, s/he will have enough work credits to potentially qualify for DIB. In some cases the practitioner will have a Claimant who has been on workers' compensation a number of years and has not worked prior to applying for SSA. The Claimant may then be deemed not an insured and therefore not eligible to collect DIB. If poor enough, however, s/he may qualify for SSI benefits. If confronted with this situation the practitioner should attempt to determine if the Claimant was disabled when s/he was insured and if the Claimant made a prior application or other protective filing to Social Security for benefits. In that situation it is possible to have the Claimant deemed eligible, however, benefits may only be available at a later date. Special eligibility rules apply for individuals who are under the age of thirty-one (31).

In addition to the earnings test the Claimant must be disabled. Disability within the context of DIB is defined to mean the Claimant is unable to engage in any substantial gainful activity ² (not just Claimant's last job) by reason of a medically determinable physical or mental impairment or combination of impairments and such inability is expected to last for a continuous period of not less than 12 months or result in death. This is a stricter standard than that of workers' compensation temporary total disability. Within the context of workers' compensation total disability means that the Claimant is unable to perform any gainful employment as a result of a job related injury or illness which disability will last for more than three (3) days.

Age, education and work experience, as well as, the Claimant's medical impairments, both physical and mental, are considered in the determination of whether a Claimant has substantial gainful activity for purposes of Social Security disability benefits. Therefore, an older person with little education and unskilled work experience might be found disabled based upon a medical condition, which would not be disabling to a younger and/or more skilled person.

Workers' Compensation does not consider age, education or work experience in the determination of temporary total disability but does under temporary partial disability³ . Furthermore, in a workers' compensation claim, there is no "earnings" standard, which must be met since as long as the injured worker was an "employee" at the time of the injury or illness s/he is covered. Accordingly, an injured worker who was employed only one day by the employer would be covered assuming the injured worker had a compensable injury...even if the injured worker had been unemployed for the entire ten (10) year period prior to the accident or onset of disability.

In subsequent updates of this page the reader will lean about the actual offset, how it is applied and calculated, what precautionary language is required in a Stipulation and what hazards exists when Medicare, Medicaid is involved or when the Claimant is receiving other "like-kind" type benefits or pension or group health benefits.

Angelo Paul Sevarino

July 2001

Normal Retirement Age by Year and Birth

Footnotes

1. Public disability benefits are those paid under a federal, state or local government law or plan that pays for conditions that are both job and non-job related e.g. civil service disability benefits, military disability benefits, state temporary benefits and state or local government retirement benefits which are based on disability and do not have a reverse offset for social DIB received.

2. The substantial gainful activity amount for persons with impairments other than for blindness is considered $760 per month.

3. C.G.S. 31-308(a); C.G.S. 31-308a