Compensation Benefits

• Jurisdiction: Maryland

VIII. COMPENSATION BENEFITS

A. In General

1. Benefits outline

Compensation benefits are based upon four classifications of disability.¹⁹⁴ The amount of compensation is calculated differently for each kind of disability, as shown in the Benefits Guides in Chapter Two: Workers' Compensation Commission Practice and Procedure of this manual.

2. Periodic payments

Compensation is paid on a weekly basis rather than in a lump sum in order to replace the worker's normal weekly income and to prevent the worker from wasting his or her means of support and requiring public assistance. The Commission has discretion to grant the worker a lump sum, but only for necessary living needs.¹⁹⁵

3. Date to be used in determining benefits

Accidental injury cases: The benefits payable are those in effect on the date of the accidental injury.¹⁹⁶

Occupational disease cases: The benefits payable are those in effect as of the date of disablement from an occupational disease, not the date of last injurious exposure.¹⁹⁷

Any change in the law after these dates does not affect the employee's entitlement to benefits, even where the change occurred before an application to reopen the claim for worsening of condition.¹⁹⁸

4. Wage loss not required

The purpose of the Maryland statute is to compensate loss of earning capacity; a showing of actual wage loss is not required in order to establish disability.¹⁹⁹

5. Credit for overpayment

When an employer mistakenly overpays compensation to the employee for one type of disability (temporary total, temporary partial, permanent total, or permanent partial), it may obtain reimbursement by taking a credit against its obligation to pay for the same type of disability.²⁰⁰ In 2000, the Legislature modified this rule by allowing an employer to offset overpayments of temporary total or vocational rehabilitation benefits against permanent partial disability benefits.²⁰¹

6. Rounding up

Any compensation rate that is a fractional dollar is to be rounded up to the next highest dollar.²⁰²

7. Penalty for late payment

The Commission has authority to assess a fine against an employer or insurer who, without good cause, fails to pay an award within 15 days after the later of the date the award is issued or the date that payment is due.²⁰³ If payment is not made within 15 days, the fine may be up to 20% of the amount due. If payment is not made within 30 days, the fine may be up to 40% of the amount due.²⁰⁴

The Uninsured Employers' Fund and the Property and Casualty Insurance Guaranty Corporation are not subject to penalties for late payment.²⁰⁵

B. Temporary Total Disability

1. Definition

This disability is the healing period during which the worker is wholly disabled and unable by reason of the injury to work.²⁰⁶

If a worker has two jobs and is able to continue working on the job in which he or she had not been injured, the worker is not entitled to temporary total compensation.²⁰⁷

The fact that the worker had voluntarily retired before he or she became temporarily totally disabled does not affect the worker's right to benefits.²⁰⁸ An employee's incarceration also does not disqualify him or her for temporary total benefits.²⁰⁹

2. Benefits

Compensation for temporary total disability is two-thirds of the worker's average weekly wage, not to exceed 100% of the average weekly wage of the state of Maryland. The compensation shall not be less than $50 unless the employee's average weekly wage is less than $50, in which event the compensation benefits are the full amount of the wage.²¹⁰

Where a claim filed on or after January 1, 1988, is reopened for additional temporary total disability within five years from the last payment of compensation, the benefits are increased to two-thirds of the average weekly wage at the time of the injury not to exceed 100% of the average weekly wage of the state of Maryland at the time of the reopening. However, the benefits may not exceed 150% of the rate set forth in the initial award for temporary total disability.²¹¹

If a government employee is covered by accident leave, he or she is not entitled to temporary total compensation, even if the accident leave benefits are less.²¹²

3. Duration

Compensation is not paid for the first three days of temporary total disability unless the disability lasts more than 14 days.²¹³

Temporary total benefits are payable until the date when the worker reaches his or her maximum improvement or the disability becomes permanent.²¹⁴

Before terminating the benefits, the employer must send written notice to the worker unless the claimant has actually returned to work or the claimant's own treating physician has stated that the claimant has reached maximum improvement.²¹⁵

If the employer continues to pay the employee's wages during a period when the employee is unable to work, the insurer is not required to pay temporary total compensation for the same period unless the employer's payments were made as a gratuity.²¹⁶

C. Permanent Total Disability

1. Definition

This kind of disability has been defined as the incapacity to do work of any kind.²¹⁷ But the courts have also indicated that total disability is not to be interpreted as utter and abject helplessness. A worker who is so injured that he or she can perform no services other than those which are so limited in quality, dependability, or quantity that a reasonably stable market for them does not exist, may be classified as totally disabled.²¹⁸ Relevant factors include the nature of the injury and the worker's age, experience, occupation, and training.²¹⁹

Although evidence from a vocational rehabilitation expert is permitted on the issue of permanent total disability, it is not essential.²²⁰

2. Presumption of permanent total disability

The loss of use of both arms, both eyes, both feet, both hands, both legs, or a combination of an eye, foot, hand, or leg, creates a presumption of permanent total disability which may be rebutted only by conclusive proof to the contrary.²²¹

3. Benefits

Compensation for permanent total disability is two-thirds of the worker's average weekly wage, not to exceed 100% of the average weekly wage of the state of Maryland. The compensation shall not be less than $25 unless the employee's average weekly wage is less than $25, in which event the compensation benefits are the full amount of the wage.²²²

For injuries occurring on or after January 1, 1988, the worker is entitled to an annual cost of living adjustment in the rate of compensation for permanent total disability. This initial rate of compensation is multiplied by the percentage change in the Consumer Price Index up to a maximum of 5%, and the product is added to the prior year's compensation.²²³ Unlike compensation rates, the cost of living adjustment is not to be rounded off to the next highest dollar.²²⁴

4. Duration

Benefits are payable for life unless the worker's condition improves so that he or she is no longer totally disabled.²²⁵

D. Temporary Partial Disability

If the worker has not reached the point of maximum improvement but has returned to part-time work, he or she is entitled to half the difference between his or her average weekly wage before the accident and his or her wage earning capacity in the same or other employment, not to exceed half the average weekly wage of the state of Maryland.²²⁶

If the worker was employed by two employers at the time of the accident and the injury disables him or her from only performing the work in the employment where he was injured, he or she is not entitled to temporary partial compensation if he or she is able to continue working in the second job and earn more than the average weekly wage in the first job.²²⁷

E. Permanent Partial Disability

1. Definition

Permanent partial disability is that which is partial in character but permanent in quality.²²⁸

There is no necessity to establish an actual wage loss in order to recover compensation for permanent partial disability.²²⁹

2. Benefits

The rate of compensation varies, depending on whether the award is for a period of less than 75 weeks (Tier 1), 75 to 249 weeks (Tier 2), or 250 or more weeks (Tier 3).²³⁰ However, regardless of the number of weeks, the rate of compensation shall not be less than $50 unless the employee's average weekly wage is less than $50, in which event the compensation benefits are the full amount of the wage.²³¹

An award for less than 75 weeks of compensation for disability or disfigurement (Tier 1) is paid at the rate of one-third of the worker's average weekly wage not to exceed $80 per week for injuries on or after January 1, 1988, $82.50 per week for injuries on or after January 1, 1989, $94.20 per week for injuries on or after January 1, 1993, $114 per week for injuries on or after January 1, 2000, 14.3% of the average weekly wage of the state of Maryland for injuries on or after January 1, 2009, 15.4% of the state average weekly wage for injuries on after January 1, 2010, and 16.7% of the state average weekly wage for injuries on or after January 1, 2011.²³²

An award for 75 to 249 weeks of compensation (Tier 2) is paid at the rate of two-thirds of the average weekly wage, not to exceed one-third of the average weekly wage of the state of Maryland.²³³ In determining whether the employee has a sufficient number of weeks to qualify for the Tier 2 compensation rate, all of the weeks for the various permanent disabilities from the injury shall be added together.²³⁴

By a special exception, any disability to the thumb, fingers or great toe is compensated at the Tier 2 rate even though the award is less than 75 weeks.²³⁵

Another special exception is made for public safety employees, who are entitled to be paid at this rate for any disability regardless of the area of the body involved or the number of weeks of compensation.²³⁶ The term "public safety employees" does not include sheriffs in those counties which have established police departments.²³⁷

An award for 250 or more weeks of...