Tuesday, May 14, 2019
Friday, August 3, 2012
|Source: National Academy of Social Insurance|
A recently published report by the National Academy of Social Insurance reflects that a "reverse offset" (coordination of benefits) still continues in 15 states. In reverse offset states, the insurance carrier gains the financial benefit of the coordination of benefits and NOT the Federal Social Security system.
"If a worker becomes eligible for both workers’ compensation and Social Security disability insurance benefits, one or both of the programs will limit benefits to avoid making excessive payments relative to the worker’s past earnings. The Social Security amendments of 1965 require that Social Security disability benefits be reduced
15 (or “offset”) so that the combined totals of workers’ compensation and Social Security disability benefits do not exceed 80 percent of the workers’ prior earnings. 16 Some states, however, had established reverse offset laws prior to the 1965 legislation, whereby workers’ compensation payments are reduced if the worker receives Social Security disability benefits. Legislation in 1981 eliminated the states’ option to adopt reverse offset laws, but the 15 states that already had such laws in place were exempted. 17
15 The portion of workers’ compensation benefits that offset (reduce) SSDI benefits are subject to federal income tax (IRC section 86(d)(3)).
16 The cap remains at 80 percent of the worker’s average earnings before disability, except that, in the relatively few cases when Social Security disability benefits for the worker and dependents exceed 80 percent of prior earnings, the benefits are not reduced below the Social Security amount. This cap also applies to coordination between Social Security disability insurance and other public disability benefits (PDB) derived from jobs not covered by Social Security, such as state or local government jobs where the governmental employer has chosen not to cover its employees under Social Security.
17 States with reverse offset laws are: Colorado, Florida, Hawaii, Illinois, Louisiana, Minnesota, Montana, Nevada, New Jersey, New York, North Dakota, Ohio, Oregon, Washington, and Wisconsin.
More Articles About The Offset
Feb 26, 2011
A NJ Court of Appeals has ruled that the reverse-offset permitted under Federal law was allowed to be asserted by an insurance carrier years after an original workers' compensation judgment was entered. Even though the ...
Dec 01, 2009
Social Security (SSA) has been subsidizing a select group of States since 1981. The workers' compensation insurance carriers in only those select States are permitted to take a credit against SSA payments. The US Congress ...
Mar 23, 2008
In 1984 Congress amended The Social Security Amendments of 1956 and required that workers' compensation benefits were to be offset against the federal Social Security disability insurance benefit. In 1985 the offset was ...
Friday, April 5, 2013
A reduction or rationing of medical care through Medicare will remove the safety net available to
In those states when there is a "reverse offset." the workers' compensation insurance carrier takes an offset when combined benefits exceed the ACE (Average Current Earning) before the onset of lost time, reduction of COLA (Cost of Livening Assessment) the carriers will be required to pay more dollars.
"President Obama next week will take the political risk of formally proposing cuts to Social Security and Medicare in his annual budget in an effort to demonstrate his willingness to compromise with Republicans and revive prospects for a long-term deficit-reduction deal, administration officials say."
Click here to read the complete article: "Obama Budget Reviving Offer of Compromise With Cuts" NYT
Tuesday, June 22, 2021
Tuesday, December 1, 2009
The US Congress legislated that if a State had a recognized Social Security Offset Plan in effect on February 18, 1981, then the SSA would not offset workers' compensation benefits to those injured workers. In those jurisdictions, the offset is taken by the workers' compensation insurance carrier, who gains the advantage.
It was recently estimated that that over 583,923 individuals were receiving Social Security Disability Benefits. Of those, 156,096 were eligible for an offset to be taken by SSA. But, of those, 44,748 or 28.7%, were eligible for a reverse offset to be taken instead by the workers' compensation insurance companies.
To read more about Social Security and workers' compensation click here.
Those States that have been designated as "reverse offset"States, and are permitted have the workers' compensation carrier to take the credit are: California, Colorado, Florida, Louisiana, Minnesota, Montana, Nevada, New Jersey, New York, North Dakota, Ohio, Oregon, Washington and Wisconsin.
Thursday, April 4, 2019
Saturday, February 26, 2011
Since the information provided by parties to define the numerical offset was lacking, and the decision below lacked "specific reasons and analysis," the matter was remanded for further proceedings.
NJ is one of the states that elected to have the insurance company / employer take the offset under the options available in 1980. Most states allow Social Security to take the offset.
Gonzalez v Bristol-Meyers Squibb, 2011WL611722, Docket No. A-2187-09T3 (NJ App Div 2011)
- Congress Told Workers Compensation is a Deteriorating System (workers-compensation.blogspot.com)
- The James Zadroga 9/11 Health & Compensation Act of 2010 (workers-compensation.blogspot.com)
- The Gift That Keeps Giving: The SSA Reverse Offset
Sunday, March 23, 2008
Collecting Both Social Security Disability Insurance And Workers’ Compensation Benefits Generates Inequality of Benefits
“The Social Security benefit computation is designed to replace more of a lower earner's preretirement or predisability earnings (average indexed monthly earnings) than a higher earner's. This is done by "bend points" in the primary insurance amount formula, which create three earnings brackets. Earnings up to the first bend point are replaced at 90 percent; earnings between the first and second bend point, at 32 percent; and earnings above the second bend point, at 15 percent, up to the taxable maximum. The three brackets are a convenient way to group workers by income (represented here by AIME). This grouping also helps distinguish differences in replacement rates, which are largely determined by the earnings bracket in which the worker belongs.”
The Social Security disability system was established in 1956 to pay cash benefits to those workers who sustained long-term disabilities and were insured for coverage. On the other hand, state workers compensation systems had been in place since 1911 and may be combined with other public disability benefits in addition to Social Security benefits.
The Social Security system, unlike state workers compensation programs, provides a nationally distributed benefit to over 8 million disabled-worker beneficiaries. State public disability benefits are paid under numerous laws including federal, state or local government were plans that provide compensation for medical conditions that are not work related. Some of them may be short-term such as state temporary disability benefits.
As of December 2005, the date that the study utilized for collection of data, there were 8,305,702 disabled-worker beneficiaries in the Social Security program. Of those beneficiaries, 1,440,772 had some past or present connection to workers compensation or public disability benefits and 798,476 at a current connection to workers' compensation or public disability benefits.
In 1984 Congress amended The Social Security Amendments of 1956 and required that workers’ compensation benefits were to be offset against the federal Social Security disability insurance benefit. In 1985 the offset was eliminated and it was again reinstituted in 1989 by Congress. Further amendments in 1996 to The Omnibus Budget Reconciliation Act Of 1981 extended the offset provision to public disability benefit programs. However, Congress excluded the offsets of workers’ compensation and public disability beneficiaries who are receiving Social Security disability benefits in those states where the State took the offset. These have been named reverse offset states. The state law needed to be in effect as of February 18, 1981. Presently there are 16 states and Puerto Rico that are reverse offset states.
The recent study involving 18 month period from January 2003 through June 2004, identifies that a proximately 11% of all Social Security disability beneficiaries were also entitled to receive state workers compensation for public disability payments. It reported that those who receive combined benefits were most likely to be male, high earners, older it retirement and from the Western states.
The report concludes that the earnings replacement rate for disability insurance beneficiaries under the Social Security system, as measured by the ratio of the monthly disability insurance benefits to the average indexed monthly earnings, demonstrates that disabled workers without workers’ compensation or public disability benefits had higher replacement rates. Therefore, collecting multiple benefits may create an economic disparity.
Monday, March 9, 2015
Social Security-Budget Estimates and Related Information
Budget Overview, February 2015
"10. Establish Workers’ Compensation Information Reporting. Current law requires SSA to reduce an individual’s Disability Insurance (DI) benefit if he or she receives workers’ compensation (WC) or public disability benefits (PDB). SSA currently relies upon beneficiaries to report when they receive these benefits. This proposal would improve program integrity by requiring states, local governments, and private insurers that 23 administer WC and PDB to provide this information to SSA. Furthermore, this proposal would provide for the development and implementation of a system to collect such information from states, local governments, and insurers."
FY 2016 BUDGET OVERVIEW, p. 22
With that information, the SSA can determine if the Federal Government is accurately calculating the Federal SSA/Workers' Compensation setoff.
The obvious inequity, cost shifting, exists in those states where a reverse offset is taken. In those states, ie. NJ, the workers' compensation insurance company takes the offset credit, and NOT the Federal Government (SSA).
The collection and publication of this data will verify the inequity between States and the cost shifting to the Federal government in some states and not others. A demand for the elimination of this inequity may result in the extinction of the Reverse Offset.
See: The Gift That Keeps Giving: The SSA Reverse Offset
- 2016 Budget Proposal Would Require Reporting of Workers' Compensation Benefits to Social Security Administration (workers-compensation.blogspot.com)
- CMS: "The Smarter Act" Introduced in the US Senate (workers-compensation.blogspot.com)
Saturday, June 25, 2016
Sunday, February 7, 2021
The tension between public pension systems and workers' compensation programs was highlighted in a recent investigative report by the NJ State Comptroller. The report raises additional critical issues common to other state and national collateral social insurance programs challenged by current fiscal limitations.
Thursday, August 19, 2021
The New Jersey Department of Labor and Workforce Development [DLWD] has proposed Rules that will adopt the recommendations of NJ State Comptroller. A February 2021 investigative report by the NJ State Comptroller raised critical issues common to other state and national collateral social insurance programs challenged by current fiscal limitations. The deadline for written comments is October 15, 2021.
Monday, March 4, 2019
A watered-down version of the original NJ supplemental workers’ compensation benefits bill has been approved by the Legislature. It now heads to the NJ Governor Murphy for review.
Wednesday, September 5, 2018
Tuesday, October 15, 2013
Expanding on the problems besieging compensation programs following the US Government Shutdown, things are going to get much worse and very quickly. Social Security will stop paying benefits, its contractors and medical providers. Closing down those contributions will literally suffocate transactional information concerning integration of Medicare Secondary Payer Act benefits and reimbursement. Calculating offsets and reverse offsets will become an impossibility. Insurance companies in reverse offset states will be required to fund more dollars into the system as application flow into the state systems to modify prior awards still being paid.
Employers dependent upon government payments, including funding and contracts, will be unable to pay workers and insurance company premiums. Cascading financial distress will implode the economy and unemployment will become rampant.
Additional burdens will be placed upon injured workers who even already are struggling to make ends meet and obtain medical treatment with absolutely no Federal safety net in place to catch them. Injured workers with pending claims will be unable to seek medical and pharmaceutical benefits from collaterally funded programs.
Federal dollars actually fund over 70% on state rehabilitation programs. These programs will quickly dry up, and the those injured workers who are seeking placement in a new job through rehabilitation will be locked out of the states.
Workplaces will continue to be unregulated as OSHA (The Occupational Health Administration) will be unable to financially fund enforcement programs, new safety programs and even review comments for pending regulations, ie. The Smart Act.
Investigations requirement Federal records, including prior military records, will become increasingly difficult to secure. Stalling this process will delay completed workers' compensation medical records, expert evaluation opinions and the adjudication of workers' compensation claims.
Quite a mess! Not a pleasant prospect to look forward to, as the clock keeps clicking down
- Study: Calif. workers compensation overhaul too new to parse (workers-compensation.blogspot.com)
- The Government Shutdown is a Kick-In-Gut to Workers' Compensation (workers-compensation.blogspot.com)
- Safety Violations Matter: Wisconsin Court Reaffirms Basis for Employer Safety Penalties (workers-compensation.blogspot.com)
- Is Workers' Compensation Just a Promise That Can't Be Kept? (workers-compensation.blogspot.com)
- Social Security raise to be among lowest in years (workers-compensation.blogspot.com)
- Workers compensation rates to decline in Oregon in 2014 (workers-compensation.blogspot.com)
- Electronic Filing: The Ideal System for Workers' Compensation (workers-compensation.blogspot.com)
- Government Shutdown: Day 8 - Injured Workers Are Being Held for Ransom (workers-compensation.blogspot.com)
Thursday, May 7, 2015
Sunday, September 29, 2013
As the US House of Representatives, under Republican leadership influenced by The Tea Party, likened in Aaron Sorkin's HBO program, The Newsroom, as "The American Taliban," passed legislation to shutdown the US Government this Tuesday, serious concern exists as to the consequences of the shutdown on workers' compensation programs throughout the nation.
In many States, whether or not a reverse offset exists, it is essential to determine what a claimant's Average Current Earnings (ACE) are to calculate, and reach a final determination of temporary and permanent disability, in a state workers' compensation claim. The access to those numbers will become difficult to obtain because of administrative rollbacks, and anticipated further delays in claims processing. Even though Federal payments will be forthcoming under protective measures, the claims process will be derailed.
Likewise, the process to obtain conditional payment information will be delayed or non-existent. The provisions of the Medicare Secondary Payer Act mandating reimbursement to The Center for Medicare and Medicaid Services (CMS) will be put on hold. Similarly, reviews for future medical compromises embodied in the Workers' Compensation Medicare Set-aside Agreements (WCMSA) will be delayed just because of administrative cutbacks in the claims system, including the appeals process.
The recently enacted provisions of The SMART Act. long sought by a coalition of cottage industries, and compensation parties, to the reimbursement process itself, will face its first major challenge to implementation as the Internet web-portable becomes non-functional. Recently proposed final Rules will face delay in implementation as the exchange of comments under the rulemaking process become further delayed in the process of submission and response.
Overall, the workers who most need the system to function, and who waited the longest time, in waiting for final adjudication of their claims, will become victim of the process. No matter how long the shutdown extends, the Federal action will highlight the continued deterioration of the complex patchwork process know as workers' compensation. The now antiquated, and once expeditious and remedial insurance system, will have suffered yet another devastating blow in its attempt to survive in a radically changing economic and socio-political system.
- Careful What You Wish For: Denying Worker's Compensation for Undocumented Workers (workers-compensation.blogspot.com)
- Work Comp Steps Up to ACA (workers-compensation.blogspot.com)
- What If I May Need Surgery Later? (workers-compensation.blogspot.com)
- Lobbying In D.C. On Behalf Of Injured Workers (workers-compensation.blogspot.com)
- The uneven playing field of workers' compensation (workers-compensation.blogspot.com)
- Report Recommends Raising Workers' Compensation Premiums (workers-compensation.blogspot.com)
Tuesday, October 2, 2007
Additionally NJ has side stepped the triennial increase that is provided for under the Social Security Regulations causing NJ’s injured workers not to be allowed to obtain any additional increases in benefits afforded by application of that provision of the Federal law.
The Senate Labor Committee reports favorably Senate Bill No. 1005.
This bill provides, from July 1, 2006 forward, an annual cost of living adjustment in the weekly workers' compensation benefit rate for any worker who has become totally and permanently disabled from a workplace injury at any time after December 31, 1979 and for the surviving dependents of workers who have died from a workplace injury at any time after December 31, 1979.
The cost of living adjustment would be an amount such that, when added to the workers' compensation weekly benefit rate initially awarded, the sum would bear the same percentage relationship to the maximum benefit rate at the time of the adjustment that the initial rate bore to the maximum rate at the time of the initial award, except that the amount of the adjustment shall be reduced as much as necessary to ensure that the sum of the adjustment and the amount initially awarded does not exceed the amount which would cause any reduction of disability benefits payable under the Federal Old Age, Survivors and Disability Act. The amount of the adjustment would be paid from the Second Injury Fund (SIF), which is supported by a uniform assessment spread out evenly over all employers and insurers.
Current law requires such annual cost of living adjustments (COLAs) in the workers' compensation benefit rate for death and permanent total disability to be paid from the SIF, but only in cases in which the injury or death occurred before January 1, 1980. The bill extends the adjustments to cases originating after December 31, 1979, although the adjustments would apply only to benefits paid on those claims after July 1, 2006.
The bill makes no change in the provisions of sections 1 and 9 of P.L.1980, c.83 (C.34:15-94.4 and 34:15-94.5), which provide for the reduction of certain portions of workers' compensation benefits by the amount of Social Security disability benefits paid. In addition, the bill expressly states that the supplemental benefits shall not be paid in a manner which in any way changes or modifies the provisions of those sections.
Wednesday, September 1, 2021
The Social Security Board of Trustees today released its annual report on the long-term financial status of the Social Security Trust Funds. The combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds are projected to become depleted in 2034, one year earlier than projected last year, with 78 percent of benefits payable at that time.
Tuesday, March 2, 2021
Supplement Benefit Bill for Surviving Dependents of Essential Coronavirus Workers Passed by NJ Legislature
The NJ Legislature has now passed S2476. It provides supplemental benefit payments to the dependents of essential employees who died in the course of employment due to the contraction of coronavirus disease 2019.