Mea Culpa, Mea Culpa! IAB Applies a Comparative Fault Analysis to Issue of Retroactive Overpayment Credit

Jun 10

Our case du jour is a Claimant victory before the Board where the Carrier miscalculated the initially - unrepresented claimant’s AWW at the inception of the case, resulting in an approximately $25,000.00 overpayment of benefits over a period of time. Carrier discovered this miscalculation as the matter was being postured for a Petition for Review, and sought to reform the AWW on the Agreement (coinciding roughly with the entry of Claimant’s counsel into the case). Moreover, the Carrier sought a credit against Claimant’s benefits and was not open to compromise in terms of a credit less than 100% of the overpayment. (Don’t you just hate it when that happens?)

The Board reformed the Agreement to reflect the correct (and lower) AWW, as expected. However, when determining whether the Carrier was entitled to a credit, the Board considered who was primarily at fault for the overpayment. Ultimately, the Board deemed the Carrier 75% culpable for the overpayment, as the more sophisticated party who deals in computing workers’ comp benefits everyday and in the better position to correctly calculate the AWW. More compelling, the Carrier had two opportunities to catch its mistake as there were two Agreements as to Compensation tendered in the course of events. Therefore, the Carrier was only entitled to a 25% credit of its total overpayment and it be applied only against future permanency and disfigurement, with Claimant retaining the benefit of roughly $18,000 in overpayment.

Let’s just say there is beauty in compromise. And if you are a carrier, you should double check and triple check whether that paystub is for weekly or bi-weekly compensation.