Calculation of Indemnity Benefits

The indemnity benefits owed to an injured worker under the Nebraska Workers’ Compensation Act fall into four separate categories. The four categories, which are found in Neb. Rev. Stat. § 48-121, are: (1) Temporary Total Disability; (2) Temporary Partial Disability; (3) Permanent Partial Disability; and (4) Permanent Total Disability. The first step in addressing the exposure for indemnity benefits is to determine the appropriate average weekly wage.  To better understand how to calculate the AWW see the blog post dated November 29, 2017. Each category of benefits is to be paid as follows.

 

TEMPORARY TOTAL DISABILITY (TTD)

 

TTD benefits are paid during the time period the employee is off work and receiving medical care for their work-related injury. TTD benefits are calculated at two-thirds (2/3) of the employee’s average weekly wage, with a maximum of $817.00/week for injuries occurring in 2017. (Please note: effective January 1, 2018, the average weekly wage maximum will increase to $831.00.) TTD benefits are paid on a weekly basis, however, there is a waiting time for TTD benefits to begin. Payments start after the employee has been off work, due to their disability for 7 days.  Days off work do not need to be consecutive, and only working a partial day due to the disability counts as 1 day off. If the employee is disabled for 6 or more weeks, the first 7 days, which constitute the waiting period, will be paid after the 6th week of disability.  There is no limit on the number of weeks during which TTD benefits can be paid, but temporary disability benefits terminate when the employee reaches maximum medical improvement (MMI).  In addition, TTD benefits are owed when an injured worker is participating in a court approved vocational rehabilitation plan.

 

TEMPORARY PARTIAL DISABILITY (TPD)

 

TPD benefits are paid to “bridge the gap” between pre-injury wages and post-injury wages, until the employee reaches MMI – this includes both light-duty work as well as new employment. Employees are entitled to weekly benefits of two-thirds of the difference between their current wage and the employee’s average weekly wage at the time of the accident, with the same maximum of $817.00/week.  Alternatively, where an employee has temporary work restrictions, TPD can be based on a temporary loss of earning capacity. TPD benefits are subject to the same waiting period as TTD benefits, however, cannot be paid for more than 300 weeks.

 

PERMANENT PARTIAL DISABILITY (PPD) and PERMANENT TOTAL DISABILITY (PTD)

 

Once an injured worker reaches MMI, they may be entitled to permanent disability benefits.. The compensation for permanent disability benefits is in addition to the amount of benefits paid for a temporary disability. Permanent disability benefits typically fall into two categories: scheduled member and unscheduled member injuries. Scheduled member injuries are the result of a permanent impairment to a member of the body, for example a finger, hand, foot, arm, or leg. Unscheduled member, or body as a whole (BAW), injuries are suffered to the trunk of the body, for example neck, back, or head.

 

The calculation of indemnity benefits for scheduled member injuries is two-thirds of the employee’s average weekly wage (calculated at a minimum of 40 hours per week). PPD benefits are paid to the employee for the loss of use of the injured member, which is normally based on a permanent impairment rating provided by a physician. The number of weeks owed for PPD based on a scheduled member injury is based on the member and the number of weeks assigned by statute to the member that was permanently injured.  Neb. Rev. Stat. § 48-121(3), provides guidance for scheduled member injuries relative to compensation rates and number of weeks paid.   For instance, an arm is worth 225 weeks.  Thus, if a physician provides a 10% permanent impairment to a shoulder, the injured worker would be entitled to 22.5 weeks (225 weeks x 10%) of PPD benefits.

 

PPD benefits for an unscheduled injury are paid based on an injured workers’ loss of earning capacity. To be entitled to PPD benefits for a loss of earning capacity, the injured worker must have been assigned permanent physical restrictions or have other evidence of disability.  PPD benefits for an unscheduled member injury are paid over a period of 300 weeks minus any weeks during which benefits were paid for temporary disability.  The benefit rate is based on the average weekly wage, taken at a minimum of 40 hours, times 2/3 and then multiplied by the percentage of an employee’s loss of earning capacity.  For instance, if the average weekly wage is $600 and the loss of earning is 20%, the PPD rate would be $80.00 ($600.00 x 2/3 = $400 x 20%).

 

PPD benefits based on a loss of earning capacity can also be paid for scheduled member injuries if there were injuries to more than one scheduled member in the same accident. In such a case, the court can award PPD based on a loss of earning capacity if the loss of earning capacity is at least 30% and the court determines, in its discretion, that payment based on the scheduled members alone do not adequately compensate the injured employee.

 

PTD benefits are owed when an employee is unable to be gainfully employed due to a work-related injury. Such benefits are most typically awarded for unscheduled injuries, but, in extraordinary circumstances, they can be awarded for single member injuries.  Further, “the total loss or permanent total loss of use of both hands, or both arms, or both feet, or both legs, or both eyes, or hearing in both ears, or of any two thereof, in one accident, shall constitute total and permanent disability.”  PTD benefits are paid for the life of the injured worker or until the total disability ceases and are calculated based on the same average weekly wage used for permanent disability.

 

If you run into difficulty when calculating indemnity benefits, or you are simply unsure whether your calculations are correct, please feel free to contact one of our attorneys.  We can provide assistance with calculating the employee’s average weekly wage, and interpreting state statutes to determine accurate disability benefits are paid. We have attorneys who are licensed in both Nebraska and Iowa.

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