You Can't Always Get What You Want, But You Get What You Need. Maryland Legislators Narrow the Definition of Similar Benefits Under LE §9-610
The Maryland General Assembly passed legislation, effective October 1, 2023, altering the circumstances of when an employer/insurer is entitled to an offset of the liability benefits under the Workers’ Compensation Act, Labor and Employment Section 9-610. LE §9-610 was amended to ensure the covered employee does not receive duplicate benefits from a governmental unit or quasi-public corporation and the Workers' Compensation Commission for the same accidental injury or occupational disease. It clarifies that an offset of benefits is only applicable when the payment by the employer and payment from Workers' Compensation Commission are based on the same accidental injury or occupational disease, in whole or in part, on the same body part.
An offset is applied when a covered employee is receiving disability retirement benefits (or other employer benefits) and Workers’ Compensation permanent partial disability benefits from the same accidental injury or occupational disease. If the retirement or other benefits are greater than the Workers' Compensation benefits, the employer or insurer is relieved from paying the Workers' Compensation benefits. Therefore, there is a complete offset and no Workers’ Compensation benefits are owed. If the retirement or other benefit is less than the Workers' Compensation award, then the Commission will order the employer or insurer to pay the difference of the Award and other benefits the employee receives. The purpose of an offset is to prevent an employee from “double-dipping” or receiving payment in the form of wages twice for the same wage loss period, for the same injury.
To further complicate the offset statute, the offset only applies to certain types of employer benefits, namely, disability or accidental retirement benefits in certain situations. The offset does not apply when the employee retires on normal or years of service retirement.
The amendment is seemingly in response to the findings in Spevak v. Montgomery County. In Spevak, the Court of Appeals found if an employee has retired on disability retirement as a result of an accidental injury or occupational disease, this triggers the 9-610 offset statute for any subsequent accidental injury or occupational disease arising out of the same employment. In Spevak, a county firefighter retired on disability because of an accidental injury to his back. The firefighter filed for Workers' Compensation benefits and the Commission found that he was not entitled to receive permanent partial disability benefits while simultaneously receiving retirement benefits, in other words, a complete offset was found based on 9-610. A few years later, the firefighter filed and was approved by Order of the Commission a claim for occupational hearing loss. When the claimant attempted to receive permanent partial disability benefits relating to his accepted hearing loss claim, the Commission again found there was a complete offset based on 9-610(a) as a “similar benefit”. On appeal, the Court found the retirement benefits for the back claim were similar to the Workers' Compensation benefits for the hearing loss claim because they arose out of the same employment. Therefore, the retirement benefits completely offset any benefits from the Commission relating to both the back claim and the hearing loss claim.
Spevak broadened the statutory interpretation of “similar benefits” and determined any accidental injury or occupational disease arising out of the same employment was entitled to an offset against any disability retirement benefit (or other benefit) from the employer. The new Bill removes “similar” from 9-610(a) and specifies the payment of the benefit by the employer satisfies, to the extent of the payment, the liability of the employer and the Subsequent Injury Fund for payment of benefits under this title only if the payment of the benefit by the employer and the payment for benefits from the Commissioner are based on the same accidental injury or occupational disease, in whole or in part, on the same body part.
In simpler terms: Workers' Compensation benefits are only entitled to an offset when the employee is receiving disability retirement benefits (or other employer benefits) as a direct result of an accidental injury or occupational disease to the same body part.
For example, in the Spevak case, the new law would find no offset and allow Spevak to receive Workers' Compensation benefits for the hearing loss claim because it is not the same occupational disease or body part as the claim in which he retired on disability and receives disability retirement benefits, his back.
The effects of this Bill are yet to be seen as the law only went into effect on October 1, 2023. Employers will still have the protection knowing that in the same occupational disease or body part, the offset will likely still apply. The Bill requires the Maryland Association of Counties and the Professional Fire Fighters of Maryland to jointly research and report data on the effects to the Maryland General Assembly by December 1, 2024. This bill has a one-year contingency, the impact will be reviewed next year and is subject to reconsideration.
Abigail Taylor