W.C. No. 4-331-925Industrial Claim Appeals Office.
May 9, 2001
FINAL ORDER
The claimant seeks review of an order of Administrative Law Judge Felter (ALJ) which determined the amount of an overpayment. The claimant contends the ALJ erroneously calculated the offset for Social Security Disability Insurance (SSDI) benefits and, therefore, incorrectly determined the amount of the overpayment. We modify the ALJ’s order.
The facts are not in dispute. The claimant sustained a compensable injury in January 1997, and his average weekly wage entitled him to temporary total disability (TTD) benefits at the rate of $223.08. The claimant reached maximum medical improvement (MMI) on September 9, 1997, and the respondents then filed an admission of liability for $3,186.85 in TTD benefits, and $9,369.36 in permanent partial disability (PPD) benefits. The admission for PPD benefits was based on a 7 percent whole person medical impairment rating. In February 1999, the claimant underwent a Division-sponsored independent medical examination (DIME), which resulted in a 24 percent whole person medical impairment rating. In reliance on the DIME physician’s rating, the respondents filed an admission of liability for total PPD benefits of $32,123.52.
In August 1999, the claimant was granted an award of SSDI benefits retroactive to November 1, 1997. The parties agree the respondents are entitled to an SSDI offset of $107.98 per week, which results in a PPD “payout rate” of $115.10 per week commencing November 1, 1997.
The ALJ found that by February 21, 2000, the claimant had received $32,187.25 in total compensation for TTD and PPD. The issue before the ALJ was calculation of the overpayment of workers’ compensation benefits in light of the retroactive SSDI award.
Purporting to apply § 8-42-103(1)(c)(I), C.R.S. 2000, the ALJ found that the “aggregate benefits payable” for PPD is $21,065.13. The ALJ arrived at this amount by adding $1,689.03 (PPD paid from September 9, 1997, through October 31, 1997) and $9,369.36 in PPD benefits paid prior to the decision awarding SSDI benefits, for a total of $11,058.39. The ALJ then subtracted $11,058.39 from the total PPD award of $32,123.52. The ALJ then divided $21,065.13 by the weekly PPD payout rate of $223.08, and determined it would take 94.43 weeks to pay the outstanding PPD benefits. However, because the SSDI offset reduced the weekly PPD rate to $115.10, the ALJ concluded the respondents owed the claimant $10,868.89 in PPD benefits. The ALJ then added $10,868.89, plus $1,689.03 (PPD prior to the offset date, per paties’ Stipulated Facts), plus $3,186.86 (TTD), and concluded the claimant was entitled to total benefits of $15,774.78. This resulted in the ALJ finding an overpayment of $14,442.47 ($32,187.25 total payments to claimant — $15,774.78 claimant’s total entitlement — $2000 SSDI attorney fees chargeable to respondents).
On review, the claimant contends the ALJ improperly applied the SSDI offset so as to understate his entitlement to PPD benefits. Relying o Armijo v. Industrial Claim Appeals Office, 989 P.2d 198 (Colo.App. 1999), the claimant argues the ALJ improperly deducted “the amount of permanent disability received by the claimant prior to his entitlement to social security benefits before determining the number of weeks of the payout period.” We agree.
Section 8-42-103(1)(c)(I) provides that where SSDI benefits are payable to the claimant “the aggregate benefits payable” for PPD “shall be reduced, but not below zero, by an amount equal as nearly as practical to one-half such federal periodic benefits.” The overall purpose of this statute is to prevent “double recovery” of SSDI and workers’ compensation benefits for the same disability. See U.S. West Communications, Inc. v. Industrial Claim Appeals Office, 978 P.2d 154 (Colo.App. 1999).
In Armijo v. Industrial Claim Appeals Office, supra, the court held the proper method to calculate the SSDI offset is to calculate the total amount payable for PPD in accordance with the statutory formula, convert this amount to its weekly equivalent, and deduct the corresponding weekly SSDI offset. Here, we agree with the claimant that “aggregate benefits payable” for PPD is $32,123.52 (total award for PPD). Thus, the entire award, when converted to its weekly rate of $223.08 would be paid in 144 weeks. However, because payment of the SSDI offset did not commence until November 1, 1997, the first 7 3/7 weeks of PPD must be paid without regard to the offset, and, according to the parties’ Stipulated Facts, the claimant is entitled to $1,689.03 for this period of time. Commencing November 1, the remaining 136 4/7 weeks are subject to the SSDI offset, and payable at the rate of $115.10, for a total payout of $15,719.37. Thus, the claimant’s total entitlement to PPD is $17,408.40.
Under these circumstances, we conclude the ALJ’s methodology for calculating the SSDI offset is contrary to the formula established i Armijo, as well as the provisions of the Act. Section 8-42-107(8)(d), C.R.S. 2000 provides that PPD “shall be paid at the temporary total disability rate” and “beginning on the date of maximum medical improvement.” See also, Nunnally v. Wal-Mart Stores, Inc., 943 P.2d 26
(Colo.App. 1996) (claim for PPD vests on date of MMI). Thus, the “aggregate benefits payable” for PPD should be determined as of the date of MMI, as should the number of weeks it will take to pay the award in full. The fact that litigation and the IME process may delay the ultimate determination of the “aggregate benefits payable” for PPD, and that the respondents may pre-pay some of the award, should not alter the basic method of calculating the award and the applicable offset. In our view, the ALJ’s calculation of the offset was not based on the “aggregate benefits payable” for PPD, but the amount remaining to be paid by the respondents after the offset was discovered. This is not the formula mandated by Armijo.
Similarly, we do not view Armijo as authority supporting the respondents’ theory for calculating the SSDI offset. The difficulty i Armijo was not that the Director of the Division of Workers’ Compensation (Director) took into account the total amount which was payable for PPD. Rather, the problem was the Director converted the PPD payout to its weekly equivalent based on the claimant’s TTD rate, and calculated the corresponding weekly SSDI offset. However, use of the TTD rate as the payout rate for PPD was improper under § 8-42-107(8)(d) because the claimant’s TTD rate exceeded 50 percent of the state average weekly wage. The Director’s calculation assumed a faster PPD payout than would actually occur under the statutory scheme and, hence, a fewer number of weeks to which the SSDI offset would apply. The effect was to frustrate the weekly offset method first approved in Industrial Commission v. Edlund, 759 P.2d 7 (Colo. 1988), and to understate the SSDI offset.
It follows the ALJ’s calculation of the overpayment must be modified. The total benefits to which the claimant is entitled is $22,595.26 ($3,186.86 TTD; $1689.03 PPD from September 9, 1997 to October 31, 1997 [weeks not subject to offset]; $15, 719.37 PPD from November 1, 1997 to June 12, 2000; $2000 credit for SSDI attorney fees). Thus, the offset is $9,591.99 ($32,187.25 total payments to claimant — $22,595.26 claimant’s entitlement to benefits).
IT IS THEREFORE ORDERED that the ALJ’s order dated August 18, 2000, is modified to provide that the respondents are entitled to recoup an overpayment in the amount of $9,591.99.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ David Cain
____________________________________ Kathy E. Dean
NOTICE
This Order is final unless an action to modify or vacate this Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, CO 80203, by filing a petition for review with the Court, within twenty (20) days after the date this Order is mailed, pursuant to §8-43-301(10) and § 8-43-307, C.R.S. 2000. The appealing party must serve a copy of the petition upon all other parties, including the Industrial Claim Appeals Office, which may be served by mail at 1515 Arapahoe, Tower 3, Suite 350, Denver, CO 80202.
Copies of this decision were mailed May 9, 2001 to the following parties:
Donald Stecklein, 2250 E. 90th Ave., Thornton, CO 80228
Charles D. Jones Co., 445 Bryant St., Unit 1, Denver, CO 80204
Charles D. Jones Co., 114 W. Linwood Blvd., Kansas City, MO 64111-1312
CGU General Accident Insurance, Lana Hessenius, CGU Hawkeye-Security Insurance, P. O. Box 5150, Denver, CO 80217-5150
General Accident Insurance Company of America, 5910 N. Central Expressway, #500, Dallas, TX 75206
Charles E. Withers, Esq., P. O. Box 4417, Boulder, CO 80306-4417 (For Claimant)
Stacy J. Tarler, Esq., 1660 S. Albion St., #425, Denver, CO 80222-4043 (For Respondents)
BY: A. Pendroy