Pennsylvania Commonwealth Court Clarifies Filing Requirements For Workers’ Compensation Claims Against the Uninsured Fund
Ryan Zavodnick | August 31, 2015 | Workers' Compensation
Recently, in Lozado v. WCAB (Dependable Concrete Work and UEGF), the Commonwealth Court reversed and remanded a decision from the Workers’ Compensation Appeal Board that had affirmed the judge’s decision denying the injured worker’s claim petition on the basis that the worker failed to provide timely notice to the uninsured fund that his employer was uninsured and additionally failed to wait the requisite time period before filing a claim petition for workers’ compensation benefits against the Fund.
The Uninsured Fund Was Created In 2006 To Provide Benefits To Injured Workers
For many years, if an employee was injured in Pennsylvania while working for an employer that did not have workers’ compensation insurance, that injured worker was often unable to obtain the benefits he/she was entitled to under the Pennsylvania Workers’ Compensation Act such as payment of medical treatment and wage loss benefits. The uninsured employers typically did not have the money to pay the claimants either, leaving the injured workers with thousands of dollars in medical bills and no money coming in to replace their wage loss. This had the practical effect of allowing uninsured employers to benefit from not having purchased workers’ compensation insurance, which is required by law.
The General Assembly recognized this problem and in 2006 the Pennsylvania Uninsured Employers Guaranty Fund was created to provide compensation to workers who have been injured while working for companies that did not have workers’ compensation insurance. However, the procedures under the law can be complicated and time-sensitive. Additionally, the Fund, while it exists for the benefit of injured workers, will raise every defense known to man in defending claims brought by injured workers. This author had anticipated that the Fund would pay the injured workers’ claims and then pursue the uninsured employers for reimbursement of the amounts paid. Unfortunately, that has not been the case. Instead, the Fund vigorously defends all claims brought, oftentimes delaying payments for years even in the most obvious of cases. This leads to issues such as those raised in the Lozado case.
The Law Creating The Uninsured Fund Has Time-Specific Filing Requirements That Must Be Complied With
The Workers’ Compensation Act provides that an injured worker must notify the Fund within 45 days “after the workers knew that the employer was uninsured.” The Fund is then required to start its investigation to determine whether the identified employer is uninsured. If the Fund does not receive proof of insurance within 14 days there is a presumption that the employer is uninsured. If the Fund does not voluntarily elect to accept the claim within 21 days (which it never does), the workers may file a claim petition with the Bureau of Workers’ Compensation seeking benefits, naming both the Fund and the uninsured employer as defendants. In Lozado, the injured worker filed a claim petition on April 15, 2009 asserting that an injury occurred on or about May 11, 2007. The petition initially was filed only against the employer. After it was filed the Bureau of Workers’ Compensation informed the worker’s attorney that the employer did not have workers’ compensation insurance.&
Shortly after, on May 11, 2009, which would have been the last day that the worker could have filed a personal injury action in the Court of Common Pleas against the employer, the claimant filed a praecipe for a writ of summons seeking damages from the employer for his injury. Such as writ is often filed to ensure that an individual does not run afoul of the statute of limitations governing a personal injury action. In this case, the attorney filed the writ in order to preserve the worker’s right to file a personal injury action against the uninsured employer. Such a personal injury action would not be allowed in the event that the employer paid benefits or wound up paying benefits under the Workers’ Compensation Act. However, in situations where an employer does not have insurance and does not pay benefits under the Act, the law allows the injured worker to pursue the uninsured employer in the Court of Common Pleas for its negligence.
In January of 2010 the attorney filed a Notice of Claim Against Uninsured Employer (the form utilized to notify the state that a workers is asserting a claim against an uninsured employer). The attorney also obtained a default judgment with respect to the Common Pleas action. A default judgment is a judgment one obtains when the defendant in a personal injury case does not file an answer to the complaint or otherwise appear to defend itself.
An Injured Worker Normally Cannot Pursue A Common Law Recovery Against His Employer If the Employer Is Providing Workers’ Compensation Benefits
Ultimately, the workers’ compensation judge, having been made aware of the default judgment, denying the worker’s claim petition against the uninsured employer on the basis that the law requires a claimant to choose between pursuing a tort remedy and seeking benefits under the Workers’ Compensation Act, and once the inured employee files a civil action, i.e., the action filed in the Court of Common Pleas in Philadelphia, he forfeits his ability to seek workers’ compensation benefits. With respect to the claim against the Uninsured Fund, the judge denied the claim because the worker did not file the required notice of claim within 45 days of learning that the employer was uninsured and because he file his petition against the Uninsured Fund on the same day that he filed the notice of claim, and therefore did not wait the requisite 21 days as required by the law to file the petition after notifying the Fund of his claim.
The Workers’ Compensation Appeal Board affirmed. On appeal, the Commonwealth Court, which decides all appeals in workers’ compensation matters from the Appeal Board, reversed and sent the case back to the workers’ compensation judge for further findings. The court noted that an employer loses its immunity from common law actions when it does not fulfill its obligations under the Workers’ Compensation Act. The court would not decide whether the exclusivity principle under the Act applies in all cases-instead it held that claimant did not violate the Act when he filed a civil action merely to preserve his ability to recover in tort prior to the expiration of the statute of limitations. Claimant had yet to recover any money with respect to the civil action and the Court would therefore not say that he had chosen that remedy over his workers’ compensation benefits.
An Injured Worker Who Does Not Notify The Fund Within 45 Days Of His/Her Claim Will Be Unable To Recover Any Benefits From The Fund Until The Fund Is Notified
The Court then addressed whether the petition against the Uninsured Fund was barred because claimant did not provide notice to the Fund within 45 days after learning that the employer was uninsured. The Court noted that whether an employee knew that his employer was uninsured is a factual determination. The letter in this case from the Bureau of Workers’ Compensation informed claimant that the employer did not have insurance. Therefore, claimant’s notice to the Fund roughly 10 months later violated the 45 day requirement under the law. The Court pointed out that the law does not state that no compensation shall be paid “unless” notice is given, but rather provides that compensation will not be paid “until” notice is given.
The Court held that failure to provide notice to the Fund within 45 days under the Act does not act as a complete bar to compensation but rather only permits the injured worker to recover benefits on or after the date the notice was provided. In other words, the injured worker would not be able to recover for his wage loss and medical treatment incurred prior to the date on which he ultimately notified the Fund.
The Lozado case demonstrates the many pitfalls that an unsuspecting injured worker may encounter under the Workers’ Compensation Act. The attorneys at Zavodnick, Zavodnick & Lasky, LLC have many years of experience handling workers’ compensation claims.