Workers Comp Basics: The Four Types of Disability Benefits
In determining the extent of a worker's injury, doctors evaluate the degree of disability or impairment. The injury may be permanent or temporary.
When an employee is injured and cannot work, disability benefits replace a portion of the employee's lost wages. They are usually calculated based on the worker's average weekly wage before the injury. There is usually a waiting period before payments begin, and there are usually minimum and maximum payment thresholds. Benefits may also vary widely by state.
In determining the extent of a worker's injury, doctors evaluate the degree of disability or impairment. (Disabilities refer to the limits on a worker’s ability to complete work-related tasks. Impairments refer to how the body functions after an injury or illness and can be physical or mental.) The injury may be permanent or temporary:
- Permanent disability or impairment which means the employee has reached maximum medical improvement (MMI) and isn't expected to change within one year.
- Temporary disability or impairment includes injuries or illnesses that continue to heal over time. In these cases, the employee's doctor would not tell them they've reached MMI.
In addition, the disability may be total or partial. Using these four criteria, payments are usually classified into one of four categories:
Temporary Total (TTD). A TTD injury prevents the worker from resuming regular job duties for a relatively limited amount of time. For example, a worker who has broken his leg on the job would probably be unable to do his normal job for 6-8 weeks, during which time he would receive TTD disability payments.
TTD payments are usually based on a percentage of the worker's average weekly wage (for example, 66 2/3). The worker with a broken leg would then receive $1000 per week for 6-8 weeks if his weekly salary was $1500.
Temporary Partial (TPD). If the worker with the broken leg was able to return to work but was unable to do the same job while his leg heals, he might be placed in a temporary position that doesn't pay as much as his regular job. He would then qualify for Temporary Partial Disability. For example, if because of the restricted duties of his temporary job he earned only $1000 per week compared his regular salary of $1500 per week, his TPD payment would be a percentage of the difference between his regular wage and his temporary wage. In this example, he would get 66 2/3 percent of $500 plus his temporary wage of $1000. A total of $1,333.
Permanent Total (PTD). If a worker sustains a permanent injury, making her unable to perform the type of work she was doing before the injury, she would receive PTD. These payments, too, are paid as a percentage of the weekly wages the worker received before the PTD. They may be paid for the rest of the worker's life or in some states, until retirement age. According to the National Council on Compensation Insurance, PTD cases are relatively rare, accounting for less than one percent of cases.
Permanent Partial (PPD). Far more common among Permanent Disability cases are PPD cases. PPD cases involve workers who though they are unable to work at their former jobs because a permanent injury, are not completely unable to work. According to the NCCI, between 56 and 69 percent of workers compensation disability cash payments made are for PPD cases.
In some states, PPD disabilities are divided into two categories: schedule and non-schedule. "Schedule" injury disabilities assign benefits according to particular body parts, such as hand, finger, eye, etc. PPD disabled workers with a schedule injury are eligible for a specified number of weeks of disability payments. A worker who has lost a finger may get 52 weeks of disability pay based on 66 2/3 of their average weekly pay.
Non-schedule injuries are determined based on how the particular state evaluates the injured worker's impairment, loss of earning capacity, loss of wages and additional factors.
In addition to disability payments, most state's workers compensation laws also provide vocational rehabilitation for injured workers unable to return to their previous jobs, either due to physical or even mental injury.
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