|
Policy
Name:
|
Lump
Sum Advancement
|
|
Policy
#:
|
CP-12-04
|
|
Code/Rule
Reference:
|
R.C.
4123.64; O.A.C. 4123-3-37; Industrial Commission of Ohio (IC) Resolution
R07-1-02
|
|
Effective
Date:
|
12/21/2015
|
|
Approved:
|
Rick
Percy, Chief of Operational Policy, Analytics and Compliance (Signature on
File)
|
|
Origin:
|
Claims
Policy
|
|
Supersedes:
|
All
Injury Management policies, directives and memos regarding lump sum
advancement that predate the effective date of this policy.
|
|
History:
|
New
|
|
Review
date:
|
12/21/2020
|
I. POLICY
PURPOSE
The purpose of this policy is to ensure that a lump
sum advancement (LSA) is determined and paid according to the applicable laws
and rules.
II. APPLICABILITY
This policy applies to BWC Field Operations
staff.
III. DEFINITIONS
Lump Sum Advancement (LSA): Payment that is made to the injured worker (IW) or
surviving spouse and then deducted from future compensation awards of permanent
total disability (PTD), scheduled loss (SL), Percentage of Permanent Partial
(%PP), or death benefits for rendering the IW or surviving spouse financial
relief or for the purpose of furthering the IW’s rehabilitation.
Lump Sum Advancement for Attorney Fees (LSA-AF): An LSA filed with and granted by the IC for
payment to be made directly to the attorney who represented the applicant(s)
with regard to the receipt of the award that is to be advanced.
LSA Options Form: A document sent by the Bureau of Workers’ Compensation (BWC) to the LSA
applicant that allows the applicant to select the weekly reduction and
repayment period for the LSA.
Net Present Value (NPV): The present value of a sum
of money in contrast to the value it will have in the future.
Parties to the Claim: For purposes of this policy, injured worker (IW), IW authorized representative,
dependent(s) in a death claim, authorized representative of dependent(s) in a
death claim, employer, employer authorized representative, and BWC.
Principal: For
purposes of this policy, the amount of money that is advanced to the applicant(s).
IV. POLICY
A.
Applicants shall request an LSA
on an Application for Payment of Lump Sum Advancement (C-32). The C-32
must be fully completed and notarized.
B.
The applicant must submit evidence
to support the need for financial relief or for furthering the IW’s
rehabilitation.
1.
Evidence supporting financial
relief must include the name(s) of the creditor(s) and the amount(s) owed
(e.g., an affidavit detailing this information).
2.
Evidence establishing
furtherance of the IW’s rehabilitation must include the name of the facility
providing the services and the amount that is owed or anticipated to be owed
(e.g., an affidavit detailing this information).
C.
Eligibility
1.
BWC may grant an LSA to:
a.
An IW who is currently receiving:
i.
Permanent Total Disability (PTD);
ii.
A scheduled loss (SL) award; or
iii.
A Percentage of Permanent Partial (%PP) award; or
b.
A surviving spouse who is currently receiving death benefits.
2.
BWC will not grant an LSA to:
a.
A surviving spouse receiving scheduled loss payments;
b.
A dependent child(ren) receiving:
i. Scheduled
loss payments; or
ii. Death
benefits; or
c. An
applicant requesting an LSA when allowance of the PTD, SL, or %PP award that is
to be advanced has been appealed to the IC or court.
D. BWC policy prohibits BWC from granting an additional
LSA in a claim when there are already two LSAs granted on or after 12/1/2004
currently being recouped.
1.
A subsequent LSA may be granted once a previously granted LSA has been
recouped.
2.
Any LSA-AF is not considered to be one of the two LSAs granted by BWC.
E.
BWC shall not grant an LSA when:
1.
The total amount of all LSAs for death benefits exceeds the amount of
death benefits payable over a two-year period; or
2.
The reduction to recoup the LSA reduces the original biweekly rate of
compensation by more than one-third (1/3), excluding the reduction made for
recoupment of any LSA-AF.
a.
Example (biweekly): $460.00 x 2=$920.00-biweekly rate $920.00/3=$306.67-maximum
reduction
$920.00-$306.67=$613.33-minimum biweekly rate after
1/3 reduction, less any reductions for recoupment of LSA-AF
b.
Example (weekly): $460.00/3=$153.33-maximum reduction, less any
reductions for recoupment of LSA-AF
$460.00-$153.33=$306.67-minimum weekly
rate after 1/3 reduction, less any reductions for recoupment of LSA-AF
c.
The 1/3 reduction limitation does not apply to LSAs of SL or %PP.
F.
BWC will verify that the amount
requested matches or exceeds the amount owed or anticipated by the applicant as
listed on the C-32.
G.
Repayment
1.
For LSAs approved prior to
12/1/2004, the rate reduction is effective for the life of the claim and the
rate will not return to the original rate.
2.
For LSAs of PTD or death
benefits approved on or after 12/1/2004:
a.
BWC may offer the following four (4) repayment options;
i.
Five (5) years;
ii.
10 years;
iii.
20 years; or
iv. The
applicant’s life expectancy.
b.
Once a repayment option has
started:
i.
The reduction will remain in
effect for the remainder of the selected repayment option; and
ii.
Cannot be changed to a different
option, including early payoff.
c.
The rate of payment of compensation will return to the pre-LSA rate once
the LSA has been recouped.
d.
BWC will not offer a repayment option that:
i.
Exceeds the life expectancy of the applicant; or
ii.
Will result in a reduction of the award by more than that which is
permitted for the applicable compensation type.
3.
For LSAs of scheduled loss approved on or after 12/1/2004, BWC shall
calculate the reduction based on the weeks of the award remaining to be paid.
When there are multiple scheduled loss awards payable, BWC may calculate the
reduction from one or more of the awards, as necessary.
4.
BWC will not accept early payoff of an LSA.
H. It is BWC’s policy to:
1. Withhold
applicable family support obligations from an LSA. Refer to the Family
Support and Attorney Fees policy at www.bwc.ohio.gov
for additional information.
2. Use the
appropriate net present value (NPV) factors for the year the LSA is paid when
reducing weekly benefit amounts. The NPV charts are on BWC’s website at www.bwc.ohio.gov.
I.
LSA Options Form
1. For an
LSA of PTD or death benefits approved on or after 12/1/2004, it is BWC’s policy
to complete and send the LSA Options Form to the applicant (and authorized
representative, if represented) for his/her selection of rate reduction and
repayment period.
2. The
repayment period options include:
a. Five (5)
years;
b. 10 years;
c. 20 years;
or
d. The
applicant’s life expectancy.
3. BWC shall
not offer a repayment option that:
a. Exceeds
the applicant’s life expectancy;
b. Extends
the recoupment period past the 18th birthday of a dependent
child(ren) when paying an LSA-AF of death benefits; or
c. Results
in a reduction of the award that exceeds the amount otherwise permitted for the
type of advancement being granted.
4. Before
mailing the LSA Options Form, it is BWC’s policy to call the applicant to
explain the LSA options and to determine if it is possible for the applicant to
receive the form by fax or email.
a. It is
BWC’s policy to mail the form only if fax or email is not possible.
b. If the
form is not returned to BWC within seven (7) days, it is BWC’s policy to
designate the life expectancy option for the weekly reduction.
5. As a
courtesy, BWC will contact the applicant (and authorized representative, if
represented) by phone to notify him/her that the LSA Options Form has not been
returned, and, as a result, the repayment option has defaulted to the
applicant’s life expectancy.
a. BWC may
extend the return period an additional five (5) days at the request of the
applicant or authorized representative.
b. If the
form is not returned by the expiration of the extension, BWC will designate the
life expectancy option.
J.
It is BWC’s policy to:
1. Send payment
for an LSA directly to the applicant; or
2. Mail the
applicant’s check to the applicant’s attorney if there is a valid Authorization
to Receive Workers’ Compensation Payment (C-230).
K.
Issuing a Decision
1.
It is BWC’s policy to issue an
order to all parties to the claim to:
a.
Allow, deny, or dismiss the LSA;
and
b.
Provide the following:
i.
The reason(s) for the decision;
ii.
The amount of the advancement;
iii.
The amount and duration of any
rate reduction; and
iv.
Any other terms regarding the
advancement, when applicable.
2.
An LSA Order is appealable to
the IC but not to court.
L.
LSA-AF
1.
It is the policy of BWC to
forward requests for LSA-AF to the IC. The
request must be filed on an Application for Lump Sum Payment of Attorney Fee
(IC-32).
2.
When the IC Order allows BWC to
do so, BWC will reduce an LSA-AF to the extent necessary to comply with the
following weekly compensation rate reduction limitations when the advancement,
as approved by the IC, will result in a reduction in the applicant’s weekly
compensation rate greater than:
a. Twenty
percent (20%) for:
i. PTD;
and
ii. Death
benefits; and
b. Thirty-three
and one-third percent (33 1/3%) for SL.
3. BWC will
not withhold family support obligations from LSA-AF.
4. The name
of the attorney only shall appear on the warrant.
5.
Unless otherwise ordered by the
IC, the reduction for recoupment of an LSA-AF paid from death benefits will be according
to the following succession:
a.
The surviving spouse only when
there are multiple dependent children and the surviving spouse is the guardian
of all minor children;
b.
The surviving spouse and any
dependent children who are 18 years or older;
c.
The surviving spouse and any
dependent children for whom the surviving spouse is not the guardian when there
are multiple dependent children and the surviving spouse is not the guardian of
all minor children; or
Example:
the deceased IW and the surviving spouse have 3 dependent children and the deceased
IW also has 2 dependent children from a previous marriage/relationship.
The surviving spouse and all 5 children had the same attorney represent them
and have received an LSA-AF.
d.
The dependent child(ren) when
there is no surviving spouse.
6. An LSA-AF
paid from death benefits must be repaid before the dependent child(ren) turns
18 years old.
BWC staff may
refer to the corresponding procedure for this policy entitled “Lump Sum
Advancement” for further guidance.