The Massachusetts Workers’ Compensation Act has undergone a considerable amount of change over the past 15 years. As a result of these changes, insurers have been provided with more means than ever before to defend cases and reduce costs. Perhaps no change is more harmful to injured employees than insurance companies’ rights to recoupment.
The term recoupment means just that. An insurance company that has made overpayments to injured workers has been granted a statutory right to recoup, that is, recover, overpayment of benefits. These overpayments most often occur through no fault of the injured workers who are most likely struggling to make ends meet in a very trying time.
Overpayments may occur in several different ways. First, an employer may erroneously overstate the wages earned by an employee before an injury. These payments form the basis upon which weekly compensation checks are calculated. Therefore, the employer’s mistake of reporting a higher amount can result in an overpayment to the injured employee. If this happens, the insurer can recoup by reducing the injured employee’s weekly checks by as much as 30% until the total overpayment has been recovered. This has a dramatic effect on the weekly payment that is made to the employee. Not only will the insurer reduce weekly payments to reflect the employee’s accurate wages, but the insurer will then further reduce the payment by as much as 30% to recover the benefits that have been overpaid. Employees who find themselves in this situation must carefully monitor the checks they receive from the insurance company to be sure that they return to the proper rate of payment after the insurance company has recouped the overpayment.
The second most common incidence of overpayments results when workers’ compensation paid under an order of an Administrative Judge is overturned in a subsequent proceeding. Insurers have a right to seek to recover the funds paid under that order. This right is not absolute, however, as the judge who issued the order has the discretion to limit the amount the insurance company can recover, or deny it in its entirety.
The Reviewing Board of the Department of Industrial Accidents, in a decision which helps level the playing field, has ruled that an award of attorneys’ fees to the employee’s lawyer may be made when an injured worker successfully defends a claim of recoupment by an insurer. This ruling may temper attempts by insurers to recover funds from a vulnerable employee who did not contribute to the overpayment.
Speak with a Massachusetts Workers’ Compensation Lawyer
To speak with a highly experienced premises liability lawyer, click here, or telephone Parker Scheer LLP seven days a week, toll free at 886-414-0400. There is no fee charged to discuss your case with our premises liability attorneys, and all information furnished will be kept strictly confidential.
Related Massachusetts Workers’ Compensation Articles
Other Massachusetts Workers’ Compensation Resources
- Massachusetts Workers’ Compensation Act
- Massachusetts Department of Industrial Accidents
- Injured Worker’s Guide (Publication of Mass. Department of Labor)
- The Workers’ Compensation Rating and Inspection Bureau