New Mexico Supreme Court Turns TTD into PTD
The New Mexico Supreme Court recently ruled that Temporary Total (TTD) can be a permanent disability. These types of decisions are often not underwritten by the Workers Compensation carrier.
As discussed earlier in this blog, the WC insurance process is a delayed system. The carriers have no way to immediately recover the reserving shortfalls when covering benefits that are totally unexpected. Such a decision will likely be followed with the plaintiff bar using the decision to pursue permanent TTD benefits for their clients.
One has to wonder whatever happened to Permanent Total benefits as the proper benefit and not Permanent TTD. According to the case Fowler v. Vista Care, an injured worker can receive Permanent Total Temporary Disability benefits – (sounds confusing?)
One of the more concerning passages from the New Mexico Supreme Court decision was:
The fact that the Legislature removed the duration limits from Section 52–1–41(A) in the same year it expressly created “temporary total disability” as a new subsection of the definition for total disability strongly suggests that the Legislature intended to classify both temporary total disability benefits and permanent total disability benefits as lifetime benefits. See State v. Davis, 2003–NMSC–022, ¶ 12, 134 N.M. 172, 74 P.3d 1064 (observing that the principle of reading statutes together to discern legislative intent “has the greatest probative force in the case of statutes relating to the same subject matter passed at the same session of the legislature”
A decision that rewrites the way that Workers Compensation is underwritten and handled by claims adjusters basically out of the blue can wreak havoc on future policies. Rewriting basic WC benefit definitions may result in sharp future premium increases. Temporary Total is just that – temporary in nature.
The New Mexico Courts issued a controversial medical marijuana decision last month. In 2013, the Florida courts attempted to rewrite the basic definitions of Workers Comp benefits.
The worst case result is that WC carriers decide not to write business in a state due to court decisions or legislation which create a very unprofitable environment.
California is the most obvious example where carriers could not afford to write business. SCIF ended up writing over 60% of the premiums as the insurer of last resort.
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