Legal Principles for Effective Worker's Compensation Management
DUE DOYLE FANNING & ALDERFER LLP
Coverage under the Indiana Worker’s Compensation Act and the jurisdiction of the Indiana Worker’s Compensation Board are premised upon an Indiana contract of employment, either express or implied, and at least partial performance of that contract within Indiana.
An employer is any individual, firm, association, LLC, or corporation “using the services of another for pay”. An employee is any person in the service of another. The Act applies to every Indiana employer and employee, but there are statutory exemptions or requirements applicable to agricultural employees, household employees, public officers, sole proprietors, partners, members or managers of an LLC, real estate professionals, independent contractors in the construction trades, owner/operators of trucks and volunteers.
PERSONAL INJURY OR DEATH, BY ACCIDENT ARISING OUT OF AND IN THE COURSE OF THE EMPLOYMENT
Compensability for injury or death is dependent upon three statutory prerequisites having been met. The injury or death must be by accident which means that it must be unexpected. The injury or death must arise out of the employment which means that there must be a causal connection between the injury or death and the conditions of the employment. The injury or death must be in the course of the employment which means that it occurs at a time and place where the employee may reasonably be expected to be in the performance of the employment.
The Act holds an employer strictly liable for an employee’s injury or death if it occurred by accident, arising out of and in the course of the employment. However, there are certain employee activities that cannot be condoned as a matter of public policy. Such activities may be raised and proven by the employer as an affirmative defense.
- Knowing self inflicted injury or death
- Commission of an offense
- Knowing failure to use a safety appliance
- Knowing failure to obey a reasonable, written, posted rule.
- Knowing failure to perform a statutory duty
STATUTES OF LIMITATION
An injured employee must file an Application for Adjustment of Claim within two years of the occurrence of the accident or within two years of the date of death caused by the accident. Where compensation has been paid, a claim may be reopened if an Application for Adjustment of Claim is filed within two years of the last day for which compensation was paid.
Indiana is an employer choice of medical state and medical expenses are not subject to an employee paid deductible or co-insurance. The choice of a medical provider is the primary cost containment provision under the Act and presupposes an agreement with the chosen provider as to payment.
AVERAGE WEEKLY WAGE
The calculation of disability compensation is based upon the AWW, subject to a statutory maximum AWW. AWW is calculated based upon the 52 weeks of gross earnings prior to the date of the accident.
TEMPORARY TOTAL DISABILITY
TTD compensation is paid at the rate of 2/3 of the AWW, subject to the statutory maximum AWW. TTD is defined as the inability to engage in the regular employment and ends when the employee returns to work or reaches maximum medical improvement.
TEMPORARY PARTIAL DISABILITY
TPD compensation is paid where restricted employment prior to maximum medical improvement results in earnings less than the AWW and is paid at the rate of 2/3 of the difference between said earnings and the AWW.
PERMANENT PARTIAL IMPAIRMENT/AMPUTATION
PPI and amputation of specified body parts are compensated by way of a statutory schedule based upon degrees of impairment and dollars per degree. The AWW is irrelevant.
PERMANENT TOTAL DISABILITY
PTD compensation is paid at the TTD rate where the injured employee is unable to engage in any reasonable employment. PTD compensation is limited to 500 weeks of compensation.
SECOND INJURY FUND
The Second Injury Fund compensates employees who are permanently totally disabled either as the result of a combination of a prior injury and a second compensable injury or who have received 500 weeks of compensation and remain permanently totally disabled.