(541 P.2d 120)
No. 75-261Colorado Court of Appeals.
Decided September 23, 1975.
On basis that the state compensation insurance fund had expended its statutory limit in workmen’s compensation benefits, application was filed for payments under major medical fund. Relying on fact that, through its subrogation rights, state compensation insurance had recovered part of the benefits it had previously paid claimant, the Industrial Commission ruled the application premature. Claimant and compensation fund sought review.
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Order Set Aside
1. WORKERS’ COMPENSATION — Right of Subrogation — Insurance Fund — Distinct Right — No Effect — Limit of Liability — Benefits. The right to subrogation granted to the state compensation insurance fund under provisions of the Workers’ Compensation statute is a separate and distinct right which has no effect on the insured employer’s limit of liability for workmen’s compensation benefits as established by the legislature.
2. Limit of Liability — Benefits — Initially Reached — Application Appropriate — Major Medical Fund — Later Recovery — Cannot Affect. When an employer’s limit of liability for workmen’s compensation benefits has been initially reached, application for admission to the Colorado Major Medical Insurance Fund is appropriate, and the employer’s later recovery or lack of recovery of the benefits it has paid will only affect the employer’s loss experience and premium charges; it cannot affect the question of whether the statutory limit of liability has been exhausted.
Review of Order From the Industrial Commission of the State of Colorado
James A. May, Francis L. Bury, R. S. Ferguson, for petitioners.
J. D. MacFarlane, Attorney General, Edward G. Donovan, Solicitor General, John Kezer, Assistant Attorney General, for respondent Industrial Commission of Colorado.
No appearance for respondent Bobby Lee Billen.
Division I.
Opinion by JUDGE ENOCH.
This is a review of an order of the Industrial Commission holding that, since the Division of State Compensation Insurance Fund (State Fund) has, through its subrogation rights, recovered part of its expenditure for medical services rendered to a workmen’s compensation claimant, the State
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Fund has not exhausted the statutory limits of its liability to that claimant. We set aside the order and remand the cause.
Bobby Lee Billen (claimant) was injured in an accident arising out of and in the course of his employment on July 1, 1971. The State Fund admitted liability and paid medical and hospital expenses incurred by the claimant up to the statutory limit of $7,500 set by 1971 Perm. Supp., C.R.S. 1963, 81-10-1(1)(a).
The claimant’s accident was occasioned by the negligence of a stranger to his employment. Hence, the State Fund entered into an agreement with the claimant whereby he agreed to proceed against the negligent party and in the event of a recovery to pay the State Fund a sum equal to the Fund’s liability. The claimant settled his personal injury claim against the negligent third party, the State Fund compromised its claim and as a result recovered a net sum of $4,000 from the settlement entered into by the claimant and the negligent third party.
Subsequently, the claimant and the Fund filed application for admission to Colorado Major Medical Insurance Fund (Major Medical) for medical expenses incurred beyond the statutory $7,500 limit of liability previously paid out by the State Fund. The deputy director of Major Medical found that since the State Fund had recovered $4,000 from the negligent third party, it had not in fact exhausted the limit of its liability and the application for major medical benefits was premature. The Industrial Commission affirmed this order. As a result of this order, before claimant would be able to obtain assistance from Major Medical, the Fund would be required to pay an additional sum of $4,000 for medical expenses over and above the $7,500 previously paid.
The Major Medical Insurance Fund was established to help defray the costs of severe injury to an employee covered by workmen’s compensation. 1971 Perm. Supp., C.R.S. 1963, 81-20-8(1) (now § 8-66-108, C.R.S. 1973), provides:
“Payments from the major medical insurance fund shall be awarded by the director only after an application therefor has been filed by a claimant employee, his employer, or his insurance carrier, or one on their behalf for admission to the fund, in any case where the limits of liability provided under Sections 81-10-1 and 81-18-20 have been exhausted.”
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Hence, in order to determine if this application for Major Medical benefits was premature, we must refer to 1971 Perm. Supp., C.R.S. 1963, 81-10-1(1)(a), which established State Fund’s limit of liability. That section states:
“Every employer, regardless of his method of insurance, shall furnish such medical, surgical, dental, nursing and hospital treatment, medical, hospital, and surgical supplies, crutches, and apparatus, as may reasonably be needed at the time of injury and thereafter during the disability but not exceeding seven thousand five hundred dollars in value to cure and relieve from the effects of the injury.” (See § 8-49-101(1)(a), C.R.S. 1973, for present limits.)
The language of this section is clear and unambiguous in stating that the employer, through his insurance carrier, shall not be required to pay for medical expenses beyond $7,500. Thus, it needs no construction. Lassner v. Civil Service Commission, 177 Colo. 257, 493 P.2d 1087.
[1] Here, the employer’s insurer, State Fund, expended $7,500 before recovering $4,000 under its right of subrogation. To require it to again pay out $4,000 would be to increase the statutory limit of liability to $11,500. The right of subrogation granted to the State Fund under 1971 Perm. Supp., C.R.S. 1963, 81-13-8 (now § 8-52-108, C.R.S. 1973), is a separate and distinct right which has no effect on the limits of liability established by the legislature. The right to subrogation would be meaningless if the limit of liability fluctuated with every recovery.
[2] The legislature established the limit of liability, and when this limit has been initially reached, application for major medical benefits is appropriate. A later recovery or lack of recovery will only affect the employer’s loss experience and premium charges; it cannot affect the question of whether the statutory limit of liability has been exhausted.
Since we reverse for the foregoing reasons, we find it unnecessary to reach the issue of procedural due process raised by petitioner.
The order is set aside and the cause remanded for consideration and determination on the merits of the application for benefits under the Major Medical Insurance Fund.
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JUDGE COYTE and JUDGE BERMAN concur.