What Is A Workers Compensation Permanency Rating?

May 2, 2018 By JL Risk Management Consultants

Question From One Of Our Devout Readers on Workers Compensation Permanency Rating

A Workers Compensation Permanency rating can also be called a PPD Rating or Permanent Partial Disability Rating.

picture of circular slide workers compensation permanency rating rule

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Each state is very distinct on how they handle permanency ratings. PPD ratings by physicians differ in some states. For example, – are the AMA guidelines used or not.

Some states even set the ratings themselves using the doctor’s rating as a basis.

So, this article will cover just the generic basics of a Workers Compensation permanency rating. If you are an adjuster or anyone that handles Workers Comp benefits that is reading this article, most renowned law firms have a “cheat sheet” on Workers Compensation law including PPD rating benefits.

If your online claims system does not provide you with the associated number of weeks for each injury, you should contact the law firms you use for a “cheat sheet” for each state in which your employer has workers compensation interests.

Signing Workers Compensation Permanency Rating Disability

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They are called cheat sheets as no other term fits. The cheat sheets are not illegal or wrong to use. That name is just the name that they are given in the WC community.

For example, we will use our HQ state, North Carolina for a list of the applicable permanency. As mentioned before, most states, but not all have permanency rating.

If you want to dig into workers compensation permanency rating, then try looking here. This coverage is very in-depth. For just the benefits per part of body loss, you would want to use the chart below.

Let us use the thumb for example –

The injured employed severely fractured his/her left them. The rating formula would be:

workers compensation benefits rate x maximum number of weeks x physician rating

(As an important side note the benefits rate usually equals 2/3 of the injured employees total average before tax wages)

If the injured employee had a 30% rating to the right thumb, then the formula would be:

$400 * 30% * 75 = $9,000.00

The formula such as the one above generates so much debate. Is $9,000 worth using 30% of the use of one’s thumb? I will leave that to the debaters.

97-31. Schedule of injuries; rate and period of compensation.

woman athlete long jump workers compensation permanency rating disability

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In cases included by the following schedule the compensation in each case shall be paid for disability during the healing period and in addition the disability shall be deemed to continue for the period specified, and shall be in lieu of all other compensation, including disfigurement, to wit:

For the loss of a thumb, sixty-six and two-thirds percent (66 2/3%) of the average weekly wages during 75 weeks.
For the loss of a first finger, commonly called the index finger, sixty-six and two-thirds percent (66 2/3%) of the average weekly wages during 45 weeks.
For the loss of a second finger, sixty-six and two-thirds percent (66 2/3%) of the average weekly wages during 40 weeks.
For the loss of a third finger, sixty-six and two-thirds percent (66 2/3%) of the average weekly wages during 25 weeks.
For the loss of a fourth finger, commonly called the little finger, sixty-six and two-thirds percent (66 2/3%) of the average weekly wages during 20 weeks
The loss of the first phalange of the thumb or any finger shall be considered to be equal to the loss of one half of such thumb or finger, and the compensation shall be for one half of the periods of time above specified.
The loss of more than one phalange shall be considered the loss of the entire finger or thumb: Provided, however, that in no case shall the amount received for more than one finger exceed the amount provided in this schedule for the loss of a hand.
For the loss of a great toe, sixty-six and two-thirds percent (66 2/3%) of the average weekly wages during 35 weeks.
For the loss of one of the toes other than a great toe, sixty-six and two-thirds percent (66 2/3%) of the average weekly wages during 10 weeks.
The loss of the first phalange of any toe shall be considered to be equal to the loss of one half of such toe, and the compensation shall be for one half of the periods of time above specified.
The loss of more than one phalange shall be considered as the loss of the entire toe.
For the loss of a hand, sixty-six and two-thirds percent (66 2/3%) of the average weekly wages during 200 weeks.
For the loss of an arm, sixty-six and two-thirds percent (66 2/3%) of the average weekly wages during 240 weeks.
For the loss of a foot, sixty-six and two-thirds percent (66 2/3%) of the average weekly wages during 144 weeks.
For the loss of a leg, sixty-six and two-thirds percent (66 2/3%) of the average weekly wages during 200 weeks.
For the loss of an eye, sixty-six and two-thirds percent (66 2/3%) of the average weekly wages during 120 weeks.
The loss of both hands, or both arms, or both feet, or both legs, or both eyes, or any two thereof, shall constitute total and permanent disability, to be compensated according to the provisions of G.S. 97-29. The employee shall have a vested right in a minimum amount of compensation for the total number of weeks of benefits provided under this section for each member involved. When an employee dies from any cause other than the injury for which he is entitled to compensation, payment of the minimum amount of compensation shall be payable as provided in G.S. 97-37.
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For the complete loss of hearing in one ear, sixty-six and two-thirds percent (66 2/3%) of the average weekly wages during 70 weeks; for the complete loss of hearing in both ears, sixty-six and two-thirds percent (66 2/3%) of the average weekly wages during 150 weeks.
Total loss of use of a member or loss of vision of an eye shall be considered as equivalent to the loss of such member or eye. The compensation for partial loss of or for partial loss of use of a member or for partial loss of vision of an eye or for partial loss of hearing shall be such proportion of the periods of payment above provided for total loss as such partial loss bears to total loss, except that in cases where there is eighty-five per centum (85%), or more, loss of vision in any eye, this shall be deemed “industrial blindness” and compensated as for total loss of vision of such eye.
The weekly compensation payments referred to in this section shall all be subject to the same limitations as to maximum and minimum as set out in G.S. 97-29.
In case of serious facial or head disfigurement, the Industrial Commission shall award proper and equitable compensation not to exceed twenty thousand dollars ($20,000). In case of enucleation where an artificial eye cannot be fitted and used, the Industrial Commission may award compensation as for serious facial disfigurement.
In case of serious bodily disfigurement for which no compensation is payable under any other subdivision of this section, but excluding the disfigurement resulting from permanent loss or permanent partial loss of use of any member of the body for which compensation is fixed in the schedule contained in this section, the Industrial Commission may award proper and equitable compensation not to exceed ten thousand dollars ($10,000).
For the total loss of use of the back, sixty-six and two-thirds percent (66 2/3%) of the average weekly wages during 300 weeks. The compensation for partial loss of use of the back shall be such proportion of the periods of payment herein provided for total loss as such partial loss bears to total loss, except that in cases where there is seventy-five per centum (75%) or more loss of use of the back, in which event the injured employee shall be deemed to have suffered “total industrial disability” and compensated as for total loss of use of the back.
In case of the loss of or permanent injury to any important external or internal organ or part of the body for which no compensation is payable under any other subdivision of this section, the Industrial Commission may award proper and equitable compensation not to exceed twenty thousand dollars ($20,000). (1929, c. 120, s. 31; 1931, c. 164; 1943, c. 502, s. 2; 1955, c. 1026, s. 7; 1957, c. 1221; c. 1396, ss. 2, 3; 1963, c. 424, ss. 1, 2; 1967, c. 84, s. 3; 1969, c. 143, s. 3; 1973, c. 515, s. 3; c. 759, s. 3; c. 761, ss. 1, 2; 1975, c. 164, s. 1; 1977, c. 892, s. 1; 1979, c. 250; 1987, c. 729, ss. 7, 8.)

You may wish to look at this reference to find more info on any workers compensation permanency rating.

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Shocking Discovery – Workers Compensation Insurance Began 2050 BC

March 26, 2014 By JL Risk Management Consultants

Ancient Sumeria Invented Workers Compensation Insurance

The origins of Workers Compensation Insurance is much more ancient than in the early 1900’s. I had always thought the beginnings of the WC system involved merchant ships or started in Wisconsin.

Map Of Wisconsin Workers Compensation Insurance With Badge

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This article from the State of Wisconsin Department of Workforce Development (DWD) refers to 1905 as the actual start of some type of WC system. In Wisconsin the employer has three common law defenses to paying an injured worker. The three defenses were that the:

worker was also negligent,
worker knew of the dangers involved and “assumed the risk,” or
injury occurred because of the negligence of a “fellow employee.”

Under this archaic workers compensation insurance system it was very difficult for workers to recover against their employers. If they won, however, there were no dollar limits on what a jury could award.

The article from the DWD goes on to say Wisconsin in 1911, adopted a Workmen’s Compensation Act. Please refer to the passage at the end of the article for the first US Work Comp system. The reason I moved it to the end of the article is that WC (of a sort) was in force at the time of the beginning of written history.

I was able to uncover an incredible article that footnoted a book that placed the origins of WC in ancient Sumeria in 2050 BC. Yes, WC is that old. The article was produced by Gregory Guyton, Dept. of Orthopedics, University of North Carolina. The article seems to be the most authoritative one I have found on ancient WC systems. It can be found here.

From the article – “The Nippur Tablet No. 3191 from ancient Sumeria in the fertile crescent outlines the law of Ur-Nammu, king of the city-state of Ur. It dates to approximately 2050 B.C. The law of Ur provided monetary compensation for specific injury to workers’ body parts, including fractures.

Graphic Of Dollar Sack Workers Compensation Insurance In White Background

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The code of Hammurabi from 1750 B.C. provided a similar set of rewards for specific injuries and their implied permanent impairments. Ancient Greek, Roman, Arab, and Chinese law provided sets of compensation schedules, with precise payments for the loss of a body part.”

One caveat is there were no actual payments for Temporary Total (TTD) or Temporary Partial Disability (TPD) Only Permanent Partial Disability (PPD) was considered in ancient times. The amazing footnote to ancient PPD is that they were based on schedules very similar to the state mandated schedules of today. The bottom line is PPD is much older than TTD or TPD payments.

footnote – Wisconsin– This remedy is essentially a “no-fault” system under which a worker no longer has to prove negligence on the part of the employer, and the employer’s three common law defenses are eliminated. The intent of the law was to require an employer to promptly and accurately compensate a worker for any injury suffered on the job, regardless of the existence of any fault or whose it might be. In return, the WC Act limited the amount of money that a worker could recover. Thus, workers are only entitled to:

Employee Workers Compensation Insurance Benefits

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certain wage loss benefits,
the cost of medical treatment,
certain disability payments and
payments for vocational rehabilitation retraining.

Under the pre-WC Act tort system, workers had been able to recover for pain and suffering, loss of enjoyment of life and other damages that a jury might award. This is no longer possible under the WC Act.

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How Does Impairment Rating (IR) Affect Workers Comp Claim?

May 4, 2011 By JL Risk Management Consultants

Impairment Rating Measures Permanent Reduced Abilities

An Impairment Rating (IR), which is also called a physical impairment rating, is a medical assessment of a claimant’s injury represented by a percentage value. A physician may assign an IR to the body as a whole or to a specific body part.

Picture Of Disability Man Impairment Rating Walking On Street

Wikipedia – Zoetnet

The rating may then be used to calculate the workers’ comp benefits owed to a claimant. Impairment ratings are particularly important in determining permanent partial disability benefits.

An adjuster’s job involves setting reserves for Permanent Partial Disability (PPD). The rating made by the treating physician usually comes at the time of Maximum Medical Improvement (MMI). Often, the rating coincides with a full return to work release or within a few months of the return to work.

Two different yet controversial types of ratings exist for doctors to use today. The most popular requirement by most states advises the physician to use the American Medical Association (AMA) guidelines.

For example, a back injury could be rated at a 20% impairment rating to the spine or body as a whole. In many states, the 20% multiplied by the number of weeks for a spine injury allows for that many weeks in PPD.

20% (rating) * 300 weeks (back or spine or body as a whole) = 60 weeks. If the injured employee’s compensation rate equals $500, the injured employee would be entitled to a benefit of $30,000 (60 * $500/wk). States or the Federal Government usually do not tax PPD benefits. The same can be said for most Workers comp benefits.

Most states allow the adjuster to pay the benefits and file a form to let the Industrial Accident Board or Commission that the proper benefits have been paid to the injured employee. The injured employee may request his/her own opinion on the impairment rating.

Disfigurement Benefits – How Are They Calculated?

June 14, 2010 By JL Risk Management Consultants

Term of the Day – Disfigurement Benefits

Most disfigurement benefits are for those who have suffered a work-related injury to the head or neck, resulting in a permanent loss of specific bodily functions, scarring and/or disfigurement. The scars must be located on the face or neck. This can result from either a cut or burn, or be from a surgical scar from a work-related injury.

Woman With Disfigurement Benefits Face Acid Attack Victim

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The benefits for disfigurement can only be claimed for the neck or head. A person may have significant scarring to other parts of their body, but it is not compensable under Workers Comp. Even if a worker is not disabled from the injury, they may still be able to collect benefits.

Benefits are given in a one-time payment and in addition to other payments, like medical bills and lost wages. The payment will depend on the severity and location of the disfigurement, and the state the injury took place in.

For example, this is North Carolina’s benefit outline: Disfigurement and Damage to Other Organs: If the injury leaves facial or head scars that seriously disfigure the person, or causes the loss or permanent injury to an important organ of the body, the employee may be awarded additional compensation not to exceed $20,000.00. The maximum payable for serious bodily disfigurement is $10,000.00. No compensation is allowed for scars where the employee is paid for loss or partial loss of use of the same member. The employee is also entitled to payment for disfigurement due to the loss or crowning of permanent teeth.

Man Holding Disfigurement Benefits Calculator With Scientific Icons

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To claim disfigurement benefits, the injured person must be able to prove that the injury causing the scar was work-related. They must also give proper notice of the injury within the requirement of the Workers Compensation Act. It must also be proven that the scarring or disfigurement is permanent; usually someone with scarring or disfigurement after six months is eligible.