Permanent Partial Disability – Is It A Workers Comp Benefit?

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Permanent Partial Disability (PPD) – Important Benefit

Picture of Man On Wheel chair Permanent Partial Disability Workers Comp Benefits
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The permanent partial disability is completely separate from any reduced wage loss benefits such as TTD or TPD.  PPD is the partial or total loss, or loss of use of a part of the body. It is also used in the case of occupational disease. It denotes the date the employee becomes unable to complete the same tasks at the same wage as before the disability began.

PPD ratings can range from 1 to 100%.  In most states when the PPD reaches 51%, the state will likely deem the injured worker will be considered at 100% or Permanent Total Disability (PTD).   

In most states, the treating physician – usually an orthopedist – assigns a Permanent Partial Disability rating using the American Medical Association (AMA) guidelines.  Recently, some states have ruled against the AMA guidelines as the “last say” in a PPD rating.

The insurance carrier or Third Party Administrator (TPA) may send the injured employee for a second opinion on the PPD rating.   The injured employee (in most states) asks for a second opinion appointment if they think the rating is too low.

The rating may be paid in a lump sum or weekly for a number of weeks.

The PPD rating formula consists of:

PPD Benefit (in weeks) = Average Weekly Wage  *  2/3   *  PPD Rating  *  Body Part Maximum Weeks 

For example:

 An injured worker John Q Smith receives a rating of 20% Permanent Partial Disability to his arm from the treating orthopedic surgeon.   This means John has lost the permanent use of his arm  by 20%.  The state deemed his Average Weekly Wage to be $400.00.  The $400 per week AWW comes from some type of wage statement  

Using the formula above: 

PPD Benefit =  $400  *  2/3 *  20%  *  240 weeks 

PPD Benefit = $266.67  *  48 weeks 

Lump sum benefit = $12,800.00 

Permanent Partial Disability and its calculation varies among the states.  This calculation should be looked at as a generic and not state specific.   There are many other benefits besides Permanent Partial disability.

 

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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