I get calls frequently from unrepresented injured workers who have been "rated and released" by their treating physicians. The term "rated and released" means that the worker has reached "MMI" (maximum medical improvement) and the doctor has provided a "permanent partial disability rating" and released the patient from treatment, either with or without work restrictions. Under NCGS 97-31, that rating--expressed as a percentage of a body part--translates into a certain amount of money for the patient. For example, a broken wrist with a healed ORIF may result in a PPD rating of 15%, which would be 15% of the "hand" (the "hand" is everything distal to the elbow, down to the fingers). The hand is a 200 week body part, so 15% of the hand is worth 200 x .15 = 30 weeks of the compensation rate. A worker who made $600 per week in gross pay before the injury would have a compensation rate of $400. Using that comp rate, a 15% to the hand would be worth 30 times $400, which equals $12,000, paid out after Industrial Commission approval over the 30 weeks that immediately follow the rating and release date.
But the injured worker gets to choose the type of disability payment that provides the worker with the "most munificent remedy." This "election of remedies" gives the injured worker up to three choices to consider. First is the rating, which is a "presumed" amount of "disability." In workers' comp, "disability" refers to the injured worker's ability to earn wages, specifically his pre-injury wages after he has returned to work. A worker who has healed up and returned to his or her pre-injury earnings level therefore has a "presumed disability" equal to the PPD rating money. But if the worker has an actual disability (an actual loss of wage earning capacity due to the injury or restrictions) after being rated and released, then the injured worker can choose to be compensated for that actual disability instead of the "presumed disability" represented by the PPD rating.
For example, if the injured worker is unable to return to any paid work due to his injuries, after he is released and rated, then he may be entitled to continue drawing the TTD or temporary total disability check, to compensate for his actual total disability. For injuries that occurred on or after June 24, 2011, a worker can draw up to 500 weeks of this benefit. Injuries that occurred before that date have no time limitation for TTD benefits. In the example, this would be a check for $400 per week until such time that the person returned to work, used up his time, or died.
If the injured worker can return to work, but due to the injury cannot earn as much as he made before the injury, then the worker may be entitled to "temporary partial disability" under NCGS 97-30 to compensate for his actual partial disability. For injuries occurring on or after June 24, 2011 this benefit is payable for up to 500 weeks. For earlier injuries the duration is limited to 300 weeks from the date of injury. This "temp partial" benefit is calculated as shown in this example: Pre-injury average weekly wage ("AWW") was $600 per week. Post-injury gross earnings after rating and release is $360 per week. The difference is $600 - $360 = $240 per week. Under GS 97-30, the worker may be entitled to get a comp check in the amount of 2/3 of the difference, or here, 2/3 of $240, while working for that lower wage. That weekly check would be $160.00 in addition to the worker's actual earnings of $360 per week in gross pay, and represents his actual partial disability. Getting a partial disability check for $160 for up to 500 weeks is worth as much as $80,000 over time, which is a lot more than that 15% rating payout. All of these benefits are excluded from taxable income. This explanation is simplified, as there are other issues that come into play. But these examples illustrate the possibilities.
To properly answer the question "is the PPD rating money a fair settlement" you have to analyze the other choices that may be available. The law allows the injured worker to take the choice--"elect the remedy"-- that will pay the most money. Not everyone will qualify for all three choices, and in fact, many people will only qualify for the PPD rating money.
But neither the workers' comp insurance adjuster nor your employer have any duty or obligation to tell you any of this important information. They have no duty to tell you about your election of benefits, and in my experience, the adjuster will typically offer the PPD rating money and not even mention the other two possibilities. If you are an injured worker and you are faced with an offer of the PPD rating money, make sure you understand the ramifications of that decision. You could very well be leaving a lot of money "on the table" simply because the insurance company has no obligation to tell you about your other options.
If you are in this situation and have any questions about it, contact a Board Certified Workers' Compensation attorney, such as Bob Bollinger here at the Bollinger Law Firm, PC inCharlotte. Bob will be happy to give you a free consultation!