Permanent Partial Disability (PPD) – Important Benefit
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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