State News : North Carolina

NWCDN is a network of law firms dedicated to protecting employers in workers’ compensation claims.

NWCDN Members regularly post articles and summary judgements in workers’ compensations law in your state.  

Select a state from the dropdown menu below to scroll through the state specific archives for updates and opinions on various workers’ compensation laws in your state.

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North Carolina



Written by: Lindsay Underwood

Two return to work decisions were recently handed down from the North Carolina Court of Appeals, both of which are helpful in determining how the Court is currently examining disability issues. The first case, Geraldine Cromartie v. Goodyear Tire & Rubber Co., Inc., involved a machine operator who sustained a laceration to the right hand. Though she returned to work initially, she reported ongoing pain and returned to the authorized treating physician, Dr. James Post for further evaluation. Dr. Post eventually assessed Claimant at MMI and assigned restrictions of no lifting over 20 pounds and no repetitive forceful gripping or grasping. Defendants ended up getting an IME with Dr. Ramos. Soon after, Defendants identified a job they argued was within Claimant’s work restrictions. Specifically, the job required driving a truck to and from building stations over a 12-hour shift, rarely lifting up to 25 pounds, and 30 pounds of force, which could be split between each hand thereby requiring 15 pounds lifting and 15 pounds pushing. Defendants requested the IME provider, Dr. Ramos, review and approve the position. He approved the position, and Defendants formally offered same to Claimant. Claimant refused to return. Through the Form 24 process, opposing counsel sent Claimant back to a plastic surgeon she had seen years prior, who assigned 10-pound lifting restrictions. As is often the case, the Form 24 Application was denied in the administrative setting. This denial led Defendants to send Claimant to another physician for additional examination, and that physician approved the job. Claimant still refused to return to work. The Full Commission found Claimant was disabled, assigning greater weight to the testimony of Dr. Post, the original authorized treating physician. The Court of Appeals agreed, holding that the Full Commission correctly found that the job offered to Claimant was not suitable.

The Court of Appeals focused on the definition of suitable employment, concluding that the job, unless modified in several aspects, was not within Claimant’s physical limitations and was therefore not suitable post-MMI employment. The Commission gave greater weight to Dr. Post’s testimony. As a result, the Full Commission determined the offered position exceeded the restrictions prescribed by Dr. Post because it required lifting over 20 pounds.

The second case, Richards v. Harris Teeter, involved a truck driver who sustained a compensable low back injury. After the incident, Harris Teeter terminated Claimant’s employment after it was determined he violated a safety procedure during the incident. In light of the termination, Claimant was not eligible for rehire pursuant to policy. A defense witness testified that Harris Teeter had a mandatory return to work program for workers’ compensation claimants and numerous temporary light-duty positions were otherwise available. However, since Claimant was not eligible for rehire, Harris Teeter would not offer him a position. Defendants declined to provide vocational rehabilitation to aid in Claimant’s job search.

Claimant’s authorized treating physician testified he would have approved a position with Harris Teeter had he not been terminated. Defendants argued that Claimant constructively refused suitable employment because he was terminated for cause and, but for that termination, he would have remained employed at pre-injury wages.

The Court of Appeals disagreed and indicated Defendants were essentially asking the Court to impose a for-cause bar to recovery of benefits when the employee is terminated for causing the accident resulting in injury and is thereafter unable to find work elsewhere. The Court indicated this was fundamentally incompatible with the workers’ compensation system which deliberately eliminated negligence from its calculus. The Court noted that gross negligence was not a defense to a workers’ compensation claim except in limited exceptions, like intentionally inflicted injuries and intoxication. Even a violation of a safety rule does not bar recovery. Defendants argued fault should have a place in the workers’ compensation system when it comes to determining whether an employer may terminate benefits. However, the Supreme Court considered similar concerns in McRae and noted the risk for abuse if an employer was allowed to evade payments simply because Claimant was terminated.

Though Defendants have numerous options for return to work, the above two cases illustrate the possible barriers and difficulties when it comes to job approval and strict adherence to company policy. The first case is another reminder that the Full Commission, and subsequently the Court of Appeals, which cannot reweigh evidence, will generally give greater weight to the authorized treating physician. Even though Defendants had two physicians stating the position was suitable, the testimony from the original authorized treating physician, Dr. Post, was found more probative.

In the last case, Defendants abided by their company policy and terminated Claimant for violating a safety rule during the incident itself.  Unlike other safety violations that lead to a for-cause termination, the Court distinguished this case noting that Claimant committed the violation during the work injury, and Defendants were essentially trying to argue that Claimant’s negligence led to his termination. Though you can terminate a claimant for cause due to violations, the Court made it clear that it cannot have occurred at the same time as the work injury.  The Court equated Defendants’ argument to trying to read a contributory negligence theory into the Workers’ Compensation Act.  Though strict adherence to a company policy is often encouraged; in this case, it resulted in a significant amount of past-owed TTD benefits for Defendants, and a failed constructive refusal argument. This case seems to suggest that employers are better off agreeing to re-hire an employee that violates a safety rule during the injury by accident for which he or she was injured.  Depending on the severity of the violation, employers may have no choice but to terminate the employee but must recognize that exposure for TTD is a possibility.

Written by: Elizabeth Ligon and Logan Shipman

The 1972 Report of the National Commission on State Workmen’s Compensation Laws and the Elimination of North Carolina’s Cap on Extended Benefits

Created in 1929 as a compromise between the state’s employers and its workers, the North Carolina Workers’ Compensation Act originally contained a 400-week cap on indemnity benefits. On July 31, 1972, the National Commission on State Workmen’s Compensation Laws, a 15-member Commission appointed by President Nixon under the Occupational Safety and Health Act of 1970, published a report on the inadequacies of state-administered workers’ compensation programs around the country. The Commission issued its report after holding hearings over the course of a year and conducting an intensive analysis of each state’s respective workers’ compensation programs. The report concluded that the programs were, in general, “neither adequate nor equitable.” The Commission issued several recommendations it described as “essential,” including a recommendation for states to remove limits on the payment of benefits for permanent total disability or death. Characterizing the limits as “arbitrary,” the Commission recommended benefits be paid “for the duration of the worker’s disability or for life and, in case of death, should be paid to a widow or widower for life or until remarriage.”

The Commission’s report laid the groundwork for reform that would take place in North Carolina the following year. In 1973, N.C. Gen. Stat. § 97-29, the statute governing compensation rates for total incapacity, was amended to remove the 400-week cap on indemnity benefits such that there was no longer any cap on indemnity benefits for cases arising on or after July 1, 1975. In 1977, N.C. Gen. Stat. § 97-29.1 was added, which increased weekly compensation payments by five percent for all permanent and total disability claims arising prior to July 1, 1973. Not surprisingly, these statutory changes resulted in significantly increased indemnity exposure for employers and their insurance carriers, as well as an increase in litigation over claimants’ entitlement to indemnity benefits.

One of the first litigated issues was over which version of the law to apply when a claimant alleged he was permanently and totally disabled. In Smith v. American & Efird Mills, 305 N.C. 507, 290 S.E.2d 634 (1982), the Supreme Court of North Carolina examined this question in the context of an occupational disease claim. In that case, the claimant was forced to quit his employment with the defendant-employer in 1968 due to breathing difficulties. He returned to work elsewhere earning less wages. The claimant filed a workers’ compensation claim in 1978 and obtained expert testimony that he was permanently and totally disabled. The Deputy Commissioner and the Full Commission awarded the claimant 300 weeks of compensation beginning January 1, 1970, which was when his average weekly wage first began to decline. The North Carolina Court of Appeals remanded the case to the Industrial Commission for a finding in accordance with the evidence that claimant was permanently and totally disabled as of 1978. As such, the Commission should apply N.C. Gen. Stat. § 97-29 as it existed in 1978, not 1970. The North Carolina Supreme Court agreed that the claimant’s indemnity benefits vested when the evidence established the claimant was totally disabled. Here, medical evidence established the claimant was permanently and totally disabled as of 1978, so claimant was entitled to lifetime indemnity benefits under N.C. Gen. Stat. § 97-29.

In 1983, the Supreme Court of North Carolina decided Taylor v. J.P. Stevens Company, 307 N.C. 392, 298 S.E.2d 681 (1983). The claimant in this case argued the legislature’s reform of the Act was intended to increase the total benefits to all persons who were entitled to receive benefits prior to July 1, 1973, and who were receiving or would receive benefits after July 1, 1977, when N.C. Gen. Stat. § 97-29.1 went into effect. The Court disagreed, holding the claimant was limited to compensation as provided by the Act at the time of his total incapacity. The claimant’s incapacity was stipulated to having started on August 2, 1963, so the Court held that the claimant’s compensation was governed by the version of the Act in effect on that date. The claimant’s request for benefits in excess of the maximum amount allowed by N.C. Gen. Stat. § 97-29 as written in August of 1963 was properly denied.

In 1986, the Supreme Court of North Carolina analyzed whether an employee who suffered an injury to a body part that was scheduled pursuant to N.C. Gen. Stat. § 97-31, the statute governing schedule of injuries, rate, and period of compensation, may recover compensation under N.C. Gen. Stat. § 97-29 instead if he was deemed totally and permanently disabled. In Whitley v. Columbia Lumber Mfg. Co., 318 N.C. 89, 348 S.E.2d 336 (1986), the claimant suffered severe injuries to his arm and hand and could not return to his previous employment. Since he was illiterate and sixty years old, his return-to-work potential was virtually nonexistent. The Court held N.C. Gen. Stat. § 97-31 was not an exclusive remedy, and therefore did not prohibit an award of lifetime compensation to an employee who was deemed totally and permanently disabled.

Likewise, the North Carolina Supreme Court in Gupton v. Builders Transport, 320 N.C. 38, 320 N.C. 38 (1987), referring to Whitley, held that an injured worker who suffered an eye injury resulting in a blind spot covering seven percent of his field of vision could receive an award of benefits under either N.C. Gen. Stat. § 97-31’s schedule of permanent partial disability benefits or N.C. Gen. Stat. § 97-30, whichever was more munificent to the injured worker. While the claimant could not recover under both provisions, he could select the more favorable remedy. The Court noted that, if the power or capacity to earn is totally obliterated, the claimant is entitled to lifetime total and permanent disability benefits under N.C. Gen. Stat. § 97-29.

The 2011 Amendments and Reinstatement of a Cap on Extended Benefits

There remained no statutory cap on indemnity benefits until 2011, when the North Carolina General Assembly enacted sweeping legislative reform to the North Carolina Workers’ Compensation Act. The reform marked the first major legislative changes to the Workers’ Compensation Act since 1973. N.C. Gen. Stat. § 97-29(b) was amended to limit the duration an employee could receive temporary total disability compensation to no more than 500 weeks from the date of first disability unless the employee qualified for extended compensation.

Pursuant to N.C. Gen. Stat. § 97-29(c), after 425 weeks have passed since the first date of disability, an employee is permitted to apply to the Commission for an award extending his indemnity benefits beyond the 500-week cap. A claimant has the burden of proving by a preponderance of the evidence that he has sustained a “total loss” of wage-earning capacity. If extended benefits are awarded by a Deputy Commissioner, the decision will not be stayed unless the decision is reversed by the Full Commission or an appellate court. An extended benefits award can also be re-reviewed by the Commission at a later time. If defendants can prove by a preponderance of the evidence that the claimant no longer has a total loss of wage-earning capacity, the Commission can terminate the extended benefits.

It should be noted that there are certain claims which allow for automatic permanent and total disability benefits, such as catastrophic cases where a claimant loses two or more limbs. Claimants in these cases are entitled to lifetime benefits without having to show a total loss of wage-earning capacity. Three other categories of claims create a rebuttable presumption of permanent and total disability benefits: (1) spinal injuries involving severe paralysis of both arms, both legs, or the trunk; (2) severe brain or closed-head injuries evidenced by severe and permanent motor or communication disturbances; and (3) second- or third-degree burns to 33% or more of the total body surface. N.C. Gen. Stat. § 97-29(d). Under these three categories of claims, defendants can rebut the presumption by showing the claimant is capable of returning to suitable employment.

Claimants could begin filing Form 33 Requests for Hearing to request extended benefits as of August 2019, so extended benefits appeals are just starting to make their way through the North Carolina court system. The claimants’ bar contends the standard for extended benefits is the same standard as within the initial 500 weeks. The defense bar, however, contends claimant have the burden of proving a total and complete loss of any wage-earning capacity. In other words, claimants must show that their wage-earning capacity has been totally obliterated. If a claimant has at least some wage-earning capacity, they should not be entitled to extended benefits. The decisions from the Full Commission to date have ruled in defendants’ favor, but several of the cases have been appealed to the North Carolina Court of Appeals.

Recent Constitutional Challenges in Florida and Kentucky, and Potential Impact on the North Carolina Extended Benefits Cap

As more and more extended benefits cases make their way through the court system, the constitutionality of North Carolina’s 500-week cap on indemnity benefits could be challenged, like we recently saw in Florida and Kentucky.

In 2016, Florida’s highest court determined that Florida’s 104-week cap on temporary total disability benefits was unconstitutional. In Westphal v. City of St. Petersburg, 194 So.3d 311 (2016), the claimant suffered a severe low back injury in December 2009 and began receiving temporary total disability benefits. Under § 440.15(2)(a) of the Florida Statutes, an injured worker’s entitlement to temporary total disability benefits ended after he reached maximum medical improvement or after 104 weeks, whichever occurred earlier. The claimant in this case did not reach maximum medical improvement prior to the expiration of the 104-week cap on temporary total disability benefits, although he was still incapable of working or obtaining employment according to his medical providers and vocational experts. The claimant requested additional temporary total disability benefits or permanent total disability benefits pursuant to § 440.15(1). The claimant also challenged the statute on the grounds that the statute as plainly written resulted in a denial of access to the courts under Article 1, section 21 of the Florida Constitution, which “guarantees every person access to the courts and ensures the administration of justice without denial or delay.” It provides that the state’s courts “shall be open to every person for redress of any injury, and justice shall be administered without sale, denial, or delay.” Id. Prior case law held that workers’ compensation provided a “reasonable alternative” to tort litigation and thus did not violate the access to courts provision, “so long as it provides adequate and sufficient safeguards for the injured employee.” Id. at 322 (quoting Kluger v. White, 281 So.2d 1, 4 (1973)).

The Florida Supreme Court concluded that the 104-week cap did not provide a reasonable alternative to tort litigation and thus denied the claimant his constitutional right of access to the courts. The Court reasoned the law lacked adequate and sufficient safeguards and could not be said to continue functioning as a system of compensation without contest. The provision did not stand as a reasonable alternative to tort litigation since injured workers, like the claimant in this case, were denied their constitutional right to seek redress when they were not yet legally entitled to assert a claim for permanent total disability benefits at the conclusion of the 104 weeks of temporary total disability benefits. The Court expanded the limit on indemnity benefits to 260 weeks.

Kentucky has also seen constitutional challenges to its statute governing the payment of indemnity benefits. In 2017, the Supreme Court of Kentucky struck down Kentucky Revised Statute (KRS) § 342.730(4) as unconstitutional in Parker v. Webster County Coal, LLC, 529 S.W.3d 759 (2017). At the time, KRS § 342.730(4) allowed termination of disability benefits as of the date the employee qualified for normal Social Security retirement benefits, or two years after the employee’s injury or last exposure, whichever occurred last. The Kentucky Supreme Court initially found this statute constitutional in McDowell v. Jackson Energy RECC, 84 S.W.3d 71 (2002) and Keith v. Hopple Plastics, 178 S.W.3d 463 (2005), as corrected (Dec. 13, 2005). However, the Court in Parker found that the statute resulted in older workers being treated differently from their younger counterparts. Furthermore, not everyone was entitled to Social Security retirement benefits, such as teachers. As there was no rational basis or substantial and justifiable reason for the disparate treatment, the statute violated the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution.

In response to the Parker decision, a 2018 amendment to the Kentucky Workers’ Compensation Act was passed, which terminated an injured worker’s right to indemnity compensation when the worker reached 70 years of age, or four years from the date of injury or last injurious exposure, whichever event occurred last. KRS § 342.730(4) (2018). The constitutionality of the revised statute was again challenged in Cates v. Kroger, 627 S.W.3d 864 (2021). The Supreme Court of Kentucky held that the amendment did not violate equal protection, noting that preventing a duplication of wage-loss protection programs and promoting the solvency of the state’s workers’ compensation system were legitimate state interests. Since the statute’s classification was no longer directly related to Social Security eligibility but was instead based only on age, it did not violate the Equal Protection Clause since the age classification was rationally related to a legitimate state purpose.


Ultimately, we anticipate any constitutional challenges to N.C. Gen. Stat. § 97-29 would not be successful, as North Carolina’s extended benefits cap is distinguishable from the caps established in Florida and Kentucky. Whereas Florida’s cap on temporary total benefits created a statutory gap for employees who had received 104 weeks of benefits but were not yet at maximum medical improvement and not yet deemed permanently and totally disabled, North Carolina’s statute allows claimants to begin the process of requesting extended benefits beyond the 500-week cap once 425 weeks have elapsed from the first date of disability. Presumably, claimants would be able to have their request for extended benefits heard at the Industrial Commission well before the 500-week cap was reached and their temporary total disability benefits were terminated. In addition, North Carolina’s statute allows defendants to take a credit for all primary Social Security retirement benefits the claimant receives. Therefore, North Carolina’s N.C. Gen. Stat. § 97-29 does not permit termination of benefits once claimant reaches a certain age or upon receipt of Social Security retirement benefits, unlike Kentucky’s statute.

In addition, N.C. Gen. Stat. § 97-29 as amended in 2011 still allows an injured worker multiple ways to prove entitlement to lifetime indemnity benefits for permanent and total disability, as well as yet another method to prove entitlement to receive extended benefits beyond 500 weeks if they can prove a total loss of wage-earning capacity.

Finally, the 2011 amendments in North Carolina were the result of a bipartisan effort to pass balanced legislation that provided additional positive benefits for both injured workers and the business community. In addition to the 500-week limitation of benefits under N.C. Gen. Stat. § 97-29, injured workers received increased benefits in several areas. Specifically, temporary partial disability benefits under N.C. Gen. Stat. § 97-30 were increased from 300 weeks to 500 weeks, death benefits under N.C. Gen. Stat. § 97-38 were increased from 400 weeks to 500 weeks and burial expenses were increased from $2,500 to $10,000. The amendments to N.C. Gen. Stat. § 97-29 were part of a large cooperative effort between all North Carolina workers’ compensation stakeholders. The 2011 Amendment passed 46 to 0 in the Republican-controlled State Senate and 110 to 3 in the Republican-controlled State House and was signed into law by the then-Democratic governor.

Written by: Matthew Flammia 

Over the holiday season, the Industrial Commission filed the first couple of Deputy Commissioner decisions for COVID-19 claims. Several decisions have been filed under the N.C. Gen. Stat. § 143-166.1 et seq for death benefits for public safety employees, which is a different standard than what is required under the North Carolina Workers’ Compensation Act. A decision on whether an employee can prove COVID-19 as a compensable occupational disease pursuant to N.C. Gen. Stat. § 97-53(13) had not been decided until recently, as discussed below. For COVID-19 workers’ compensation occupational disease claims in North Carolina to be compensable, a claimant has the burden of proving: (1) that their employment placed them at an increased risk of contracting the virus when compared to members of the general public; and (2) that there was a causal connection between their specific infection and their employment. In other words, the claimant must prove that they were infected while at work, as opposed to outside of work. Further, the claimant’s employment must have placed them at an increased risk of contracting COVID-19.

In both decisions, Britney McNeair v Owens Illinois, Inc./O-I Glass (November 21, 2022) and Tony Esai Chambers v North Carolina Department of Public Safety (December 22, 2022), the Deputy Commissioner determined that claimant failed to meet his/her burden of proof to establish a compensable occupational disease claim. The claimants in both claims could not show that they actually contracted COVID-19 from their employment as a Crew Leader of a glass manufacturing line or as a Corrections Officer. Further, it was determined that neither one of their positions placed them at an increased risk to contract COVID-19 compared to the general public. Of interesting note, the claimant in the McNeair decision asserted an injury by accident claim, but it was denied as well.

The decisions highlight the difficulty an employee will have to establish a compensable COVID-19 claim in North Carolina. The claimants in these claims contracted COVID-19 in 2020 and 2022, contracted different COVID-19 variants, and during times when different safety protocols were in place. However, these distinguishing facts did not seem to influence the decision either way. The claimants were employed in occupations where there was frequent contact with a number of co-workers, but it was determined those facts alone were not enough to establish the increased risk element needed to prove a compensable claim. Finally, these decisions demonstrate the importance of a thorough investigation. In both decisions, contract tracing and investigation into the claimant’s personal and work schedule were important when determining whether COVID-19 was actually contracted in the workplace.

Overall, the recent decisions give us the insight into how the Industrial Commission will handle COVID-19 claims. It affirms how difficult it will be for an employee to show that he/she actually contracted COVID-19 from their employment instead of outside of work when COVID-19 can be contracted anywhere. Further, the decisions establish in multiple industries that just having contact with a number of co-workers is not enough to establish that the employment places individuals at a greater risk than the public of contracting COVID-19. Along those lines, there is an argument to be made that COVID-19, like the flu, should now be considered an ordinary disease to which the public is generally exposed nationwide as well as in North Carolina.

Written by Tracey Jones 

Revised Guidelines for In-Person Industrial Commission Hearings

The Industrial Commission has revised its in-person hearing guidelines to reflect the most recent guidance from the Centers for Disease Control (CDC).

In-Person Deputy Commissioner Hearing Guidelines

Any person with symptoms of COVID-19 who has not had a COVID-19 viral test following onset of symptoms shall not attend an in-person hearing and shall contact the Deputy Commissioner.

Any person who has tested positive for COVID-19 and has had symptoms of COVID-19 shall not attend an in-person hearing and shall contact the Deputy Commissioner unless at least 5 days have passed since symptom onset and 24 hours with no fever and without the use of fever-reducing medications has passed and other COVID-19 symptoms are improving. Additionally, any person who has tested positive for COVID-19 and has had symptoms of COVID-19 shall wear a high-quality mask while attending any in-person Industrial Commission hearing for an additional 5 days after the end of the isolation period.

Any person who has tested positive for COVID-19 but has had no symptoms of COVID-19 shall not attend an in-person Industrial Commission hearing and shall not contact the Deputy Commissioner unless at least 5 days have passed.

Any person who has no symptoms of COVID-19 and has not tested positive for COVID-19 but who has, at any time during the 10-day period prior to an in-person Industrial Commission hearing, had a known contact with another person who has COVID-19 shall wear a high-quality mask at all times during the hearing.

Read the full list of revised in-person Industrial Commission hearings here.

In-Person Full Commission Hearing Guidelines

Any person with symptoms of COVID-19 who has not had a COVID-19 viral test following onset of the symptoms shall not attend an in-person Full Commission hearing and shall contact Counsel to the Panel Chair.

Any person who has tested positive for COVID-19 and has had symptoms of COVID-19 shall not attend an in-person Full Commission hearing and shall contact Counsel to the Panel Chair unless at least 5 days have passed since symptom onset and 24 hours with no fever and without the use of fever-reducing medications has passed and other COVID-19 symptoms are improving. Additionally, any person who has tested positive for COVID-19 and has had symptoms of COVID-19 shall wear a high-quality mask while attending any in-person Full Commission hearing for an additional 5 days after the end of the isolation period.

Any person who has tested positive for COVID-19 but has had no symptoms of COVID-19 shall not attend an in-person Full Commission hearing and shall contact Counsel to the Panel Chair unless at least 5 days have passed since the positive COVID-19 test.

Any person who has no symptoms of COVID-19 and has not tested positive for COVID-19 but who has, at any time during the 10-day period prior to an in-person Full Commission hearing, had a known contact with another person who has COVID-19 shall wear a high-quality mask at all times during the in-person Full Commission hearing.

Read the full list of revised in-person Full Commission hearings here.

Important Memo to All Carriers, Third-Party Administrators, and Self-Insured Employers: Rule 11 NCAC 23A.0109(d) Requirement to Provide Commission with General Email Address for Service of Claim-Related Documents

Pursuant to Rule 11 NCAC 23A.0109(d), all carriers, third-party administrators, and self-insured employers are required to provide the Commission with an email address for service of claim-related documents in cases where the Commission does not have email contact information for a specific representative assigned to the claim. The Rule requires a general email address for receipt of letters and notices related to claims when the Commission has NOT been advised of a specific person handling the claim. Once the Commission has been advised of a specific representative assigned to the claim, correspondence regarding the claim will be sent directly to that person.

Written by: Kyla Block

A trip and fall. Injury by machinery. Exposure to asbestos leading to a diagnosis of mesothelioma. These are life-changing events for employees (and employers) that may lead to a slurry of workers’ compensation claims. When the worst happens to an injured employee and his or her family is left behind, the Workers’ Compensation Act details the steps employers, insurance carriers, and administrators must take, as well as what family can anticipate in the aftermath of loss. The Act explains the scope of death benefits, including the different kinds of beneficiaries that may exist and how they will be allocated compensation. Considering key litigation helps to demonstrate how the statutes are applied in practice.

Who Can Be a Beneficiary?

According to the Act, a beneficiary may be someone wholly dependent on the employee, or they may be only partially dependent. If only one person is deemed to be wholly dependent, then he or she will receive the entire share of benefits. The Act considers widows, widowers, and children to be whole dependents. If there are multiple individuals who are deemed to be wholly dependent, then the compensation they receive will be divided among them “according to the relative extent of their dependency (Section 97-39).”

Partial dependents, unlike whole dependents, receive benefits in proportion to the amount of support they received from the deceased employee at the time of his injury. If there are neither whole nor partial dependents, compensation is assigned to whoever may be “next of kin.” These may include adult children, brothers and sisters, or parents. Next of kin, in the absence of whole or partial dependents, will receive the full compensation owed in a lump sum. In the absence of next of kin or dependents of any kind, no compensation death benefits will be paid. However, the employer must still pay for funeral expenses.

What Compensation Do Beneficiaries Receive?

Typically, beneficiaries to the compensation of a deceased employee will be due 66 and 2/3 percent of the employee’s average weekly wages calculated at the time of his or her injury. Benefits will be paid at this rate for 500 weeks from the date the employee dies. However, dependent children will continue to receive benefits beyond 500 weeks until they reach 18 years. Finally, if the deceased’s widow or widower is physically or mentally unable to care for themselves as of the time the employee’s death, then the widow or widower will continue to receive benefits throughout life until or if they should remarry.

Examples from NC Case Law

Prior litigation highlights the nuances in how our courts consider and apply death benefits owed under the Act. For example, Deese v. Southern Law and Tree Expert Company (1982) provides guidance on what happens if the pool of eligible beneficiaries pass away. The North Carolina Supreme Court considered the case of Charles W. Deese, who died following his compensable injury. At the time of his death, Deese was married with three dependent children under the age of 18. As his children reached 18 years, they would become ineligible to receive further compensation. Deese’s family argued that the amount of compensation no longer paid to children who reached 18 years should be reassessed and lumped into the amount remaining for any children who had not yet reached adulthood. To reassess the amount owed to remaining dependents would essentially increase the amount remaining beneficiaries could claim. However, the Court found that the only timeline during which apportioned benefits could be changed would be within the first 400 weeks. The Court further noted that the Act is not intended to “provide…the equivalent of general accident, health, or life insurance.” Thus, the amount of death benefits owed to dependents cannot be reapportioned when the 400 weeks have elapsed, even if dependents age out and are no longer eligible to receive benefits.

Not just anyone can claim death benefits. The NC Supreme Court has made key decisions regarding who may–and may not–be considered a beneficiary. In Fields v. Hollowell & Hollowell (1953), the Court considered the possibility of awarding death benefits to a long-time unmarried partner. Following the death of the employee, William Edward McMillan, the Industrial Commission awarded death benefits to the deceased’s mother. Of note, McMillan’s mother was not reliant upon him financially–she was awarded benefits as “next of kin,” and not as a dependent. McMillan’s cohabitating partner, Julia Mae Fields, appealed on the grounds that she was dependent on the deceased and should receive death benefits. The Court found that not only was it “alien to the customs and ideas of our people” to allow the same benefits to a cohabitating couple as it would to a married one, but it would also pave the path to denigrate the rights of the “legitimate claims of helpless defendants.” The Court denied Fields’ claim for benefits, reversed the decision of the Court of Appeals, and remanded the case to the Industrial Commission to award its initial denial of her claims.

If death occurs following occupational illness instead of one-time accidental injury, prior litigation explains what beneficiaries and employers can anticipate. In the seminal case of Booker v. Duke Medical Center (1979), the NC Supreme Court considered the claims of the family of Michael Booker. Booker worked as a laboratory technician at Duke Medical Center. As a part of his job duties, Booker regularly handled unmarked blood samples contaminated with serum hepatitis. Several years into his employment, he contracted serum hepatitis. After filing a claim for workers’ compensation benefits, Booker subsequently died from his illness. The Industrial Commission granted death benefits to his surviving wife and four children. When Duke and the insurance carriers appealed, the Court of Appeals reversed the awardThe case then went before the NC Supreme Court.

The Supreme Court considered whether serum hepatitis could be considered an occupational disease and under what statute Booker’s dependents could claim death benefits: the statute in effect at the time of Booker’s initial worker’s compensation claim, or the amended statute in effect at the time of his death. While the Court of Appeals argued that the statue governing death benefits should be the one in effect when Booker became sick, the Supreme Court stated that the determining statute should be the one in effect at the time of Booker’s death, since “these amendments were made applicable to cases originating on and after their effective date.” Additionally, the Supreme Court held that Booker’s disease was occupational, even though it was admittedly a disease that any person could contract. Key for the Supreme Court was expert testimony noting that, though serum hepatitis is not a disease specific to laboratory technicians, Booker’s occupational exposure to the disease vastly exceeded that of the general population, putting him at significant occupational risk. The Supreme Court reversed the decision of the Court of Appeals and returned the matter to the Industrial Commission to award benefits to Booker’s family.

In Conclusion

In Deese, the Court explained, “in all cases of doubt, the intent of the legislature regarding the operation or application of a…provision is to be discerned from a consideration of the Act as a whole–its language, purposes and spirit.” The Act details the circumstances under which someone can be considered a beneficiary and claim death benefits. When seeking clarity on how to file for and pay out death benefits claims due to compensable workplace injury or occupational disease, employers and beneficiaries should look to the statutes and existing prior case law to understand how courts will interpret and apply these regulations, as well as under what circumstances exceptions do and do not exist.

Written by John Tomei

When employees in North Carolina sustain injuries by accident arising out of and in the course of their employment with employers, their ensuing workers’ compensation claims are generally compensable. However, what if the injured worker is a subcontractor? And, does it matter if the injured subcontractor is uninsured?

What if the injured worker is a subcontractor?

The answer to the first question is determined by the analysis of whether the worker was an employee or an independent subcontractor at the time of the injury. Many employers mistakenly believe that simply calling  workers “independent contractors” or “subcontractors” and paying them cash or with a Form 1099 makes their workers independent or subcontractors.  That is often not the case. Rather, in North Carolina, it is a multi-factored analysis as to whether an injured worker is an employee or an independent contractor, with the ultimate test being whether the contracting entity had the right to control the details of the injured worker’s work.

Some of the factors the Industrial Commission considers are whether the injured worker (1) was engaged in an independent business, calling, or occupation; (2) whether they had independent use of their special skill,  knowledge or training; (3) whether they were doing a specified piece of work at a fixed price, for a lump sum,  or on a quantitative basis; (4) whether they are not subject to discharge for choosing their method of work; (5) whether they are in the regular employ of the other contracting party; (6) whether they are free to hire assistants; (7) whether they have full control over their assistants; and (8) whether they select their own time. No single factor is determinative. Instead, the ultimate test is whether the contracting entity had the right to control the details of the injured worker’s work.

These cases are all fact-specific and often require careful factual and legal analysis. Some at the Commission give the benefit of any factual doubts to the injured worker. Moreover, if the injured worker was paid by the hour, the Commission will often give that factor great weight and find that the injured worker was an employee rather than an independent contractor, such that the worker’s claim would be found compensable.

Does it matter if the subcontractor is uninsured?

If the injured worker is a subcontractor, and they are uninsured for workers’ compensation purposes, can they successfully argue that the statutory employment protections of N.C.G.S.  97-19 should nonetheless apply to enable them to obtain workers’ compensation benefits? Fortunately for contracting entities and their carriers, the answer is likely “No.”

N.C.G.S. 97-19 provides, in relevant part, the following:

…shall be liable, irrespective of whether such subcontractor has regularly in service fewer than three employees in the same business within this State, to the same extent as such subcontractor would be if he were subject to the provisions of this Article for the payment of compensation and other benefits under this Article on account of the injury or death of any employee of such subcontractor due to an accident arising out of and in the course of the performance of the work covered by such subcontract. N.C.G.S. Ann. 97-19.

In an earlier version of the statute, the class of persons protected by this provision included not only employees of the subcontractor, but also the subcontractor himselfSoutherland v. B.V. Hedrick Gravel & Sand Co., 345 N.C. 739, 483 S.E.2d (1997). However, in 1995, the General Assembly reinstated the pre-1987 language of N.C.G.S. 97-19 by deleting ” any such subcontractor, any principal or partner of such subcontractor or” preceding “any employee of such subcontractor” effective June 10, 1996. Boone v. Vincent, 127 N.C. App. 604, 609, 492 S.E.2d 356, 359 (1997), cert. denied, 347 N.C.573, 498 S.E.2d 377 (1998). (citing 1995 N.C. Sess. Laws ch. 555 sec.1).

Consequently, the current Act only protects injured employees of a subcontractor, and not the uninsured, injured subcontractor himself. Obviously, subcontractors can choose to purchase workers’ compensation insurance coverage to protect themselves, in addition to their employees, in the event of a work-related injury.

Claims Handling Practice Tips

At the inception of a claim, insurance carriers and their adjusters need to thoroughly investigate and confirm whether the injured worker was an employee or an independent subcontractor, bearing in mind the factors mentioned above.  If the injured worker is a subcontractor and uninsured, the Act does not provide any protection for that injured subcontractor. Rather, under the statutory employment scheme of N.C.G.S. 97-19, only injured employees of subcontractors are protected by the coverage, which is afforded by the general contractor’s workers’ compensation policy.

Written by: Lindsay Underwood

A recent May 2022 decision from the North Carolina Court of Appeals provides a refresher on the “eggshell plaintiff rule” and taking your claimant how you find them. In Kluttz-Ellison v. Noah’s Playloft Preschool, the claimant sustained two separate incidents to the knees while working as the owner and director of a preschool. One incident took place in 2013, while the claimant was changing a lightbulb, and one took place in 2015, when she tripped over a student’s sleeping cot. Both claims were found to be compensable.

The claimant was ultimately referred for a revision replacement surgery for the right knee, as well as a total knee replacement for the left knee. Before she could undergo the same, her physician opined that she needed to lose a significant amount of weight to get the surgery. Unfortunately, the claimant was unable to lose weight on her own, and the physician recommended a bariatric surgery to assist with weight loss. The parties proceeded to hearing on the issue of weight loss and the need for bariatric surgery. The claimant testified she had tried to lose weight on her own using various diets. The Deputy Commissioner found the claimant’s need for a right knee revision surgery and repair of hardware loosening were not related to the compensable work injury, and, thus, the bariatric surgery, was unrelated as well. The claimant’s claims for the surgeries were denied.

The claimant appealed to the Full Commission. Notably, during the appeals process, the claimant underwent the right knee revision surgery and bariatric surgery on her own. The Full Commission reversed, concluding her right knee condition, treatment, and, now completed, right knee revision surgery was compensable. The Full Commission initially concluded her need for weight loss treatment/bariatric surgery was not directly related to her injury but following a Motion for Reconsideration and a Motion to Allow Additional Evidence filed by the claimant, the Full Commission amended the Opinion and Award. Though the Full Commission did not admit additional evidence, they concluded the bariatric surgery was medically necessary as a precedent to her compensable right knee surgery.

Defendants appealed to the Court of Appeals. The Court noted the claimant’s bariatric surgeon testified it was standard practice to not allow a patient to have knee replacement surgery until their BMI is under 40. Further, the surgeon testified that the claimant had fully participated in efforts to lose weight on her own. Thus, the only way for her to get her BMI under 40 so she could undergo the medically necessary knee replacement revision, was to have bariatric surgery. Further, the claimant needed surgery for both knees, and her authorized treating physician testified that it was an emergent weight loss requirement to get her BMI under 40 before she could undergo the surgeries.

The Court of Appeals cited N.C.G.S. §97-25, and the definition of medical compensation including “other treatment” such as payment of medical expenses incurred as a result of bariatric surgery because it was medically necessary to help her achieve an optimal BMI to allow her to undergo the right knee replacement revision. The question then became whether her need for bariatric surgery was directly related to the work injury. Applying the Act liberally, the Court of Appeals rejected Defendants’ argument that the claimant’s weight issues preexisted the work injury and were not therefore directly related to the compensable claim. Instead, they noted a direct line of causation connecting the dots between the compensable injury and the Commission’s award for bariatric surgery. As the bariatric surgeon testified that, due to physical limitations (the need for bilateral knee surgeries), she could not lose weight fast enough on her own, her need for bariatric surgery was directly related to the compensable injury.

Employers are often frustrated by the “tangential” medical treatments that come up while a claimant is receiving treatment for a compensable condition. Unfortunately, defendants take their claimant as they find them, and this decision only confirms that the Commission, and the Court of Appeals, will require defendants to take steps to return the claimant to their pre-injury status, even if it includes providing treatment like bariatric surgery, weight loss programs, and smoking cessation efforts.

Implications for Defendants

A key point was that the physician testified that the claimant had made her best efforts with other weight loss treatment, such that the bariatric surgery was the only remaining option. A motion to compel the claimant to comply with medical treatment is a potential option if defendants are ordered to pay for weight loss to treat a compensable work-related injury. The claimant will have to show up at meetings and comply with preliminary weight loss programs or they could jeopardize their benefits due to noncompliance with medical treatment. What is clear from this case is that Defendants should not have to immediately pay for the most expensive treatment modality, and the claimant still has to make efforts on their own via less-expensive options.

Written by Tracey Jones and Heather Baker 

On July 26, 2022, the Full Commission issued another extended benefits decision, Messick v. Walmart Stores, Inc. The panel consisted of Vice-Chair Griffin, Commissioner Taylor and Commissioner Goodman.  In this case, the Full Commission awarded the claimant extended benefits. The issue of extended benefits was not an issue at the Deputy Commissioner level. The Deputy Commissioner issued an Opinion and Award finding compensable aggravations to claimant’s pre-existing left knee condition and mental health condition, awarded ongoing TTD benefits, and ordered payment for claimant’s dental treatment related to a post-accident fall. Defendants did not appeal the findings or conclusions related to causation, but appealed on the issue of whether the first date of disability versus the date of injury was controlling in regard to determining the indemnity benefits and/or extended benefits owed to claimant under N.C.G.S. § 97-29.

Claimant sustained two compensable injuries; one to her lumbar spine and another to her right knee. Her lumbar spine injury was pre-2011 statutory reform and her right knee injury was post-2011 reform. Both injuries were accepted by Defendants. Defendants also authorized benefits for psychological treatment as a part of the claim. Ultimately, claimant required, among other treatment, a spinal cord stimulator, a knee replacement surgery, and a knee replacement revision procedure, along with increased psychological treatment for depression, which included a 20-day psychological support and physical reconditioning program where she weaned off Oxycodone. Eventually, claimant’s left knee became problematic, and she required a left total knee replacement, which claimant’s doctor opined was the result of her accepted right knee injury. She was ultimately assessed with failed back syndrome, chronic low lumbar pain, and chronic knee pain.

As a part of litigation, the parties deposed nine experts, consisting of claimant’s medical providers and claimant’s vocational expert. In terms of disability, many providers deferred to other providers and/or a vocational expert, and claimant was assigned permanent sedentary restrictions with no repetitive bending or stooping; no lifting more than twenty pounds; no twisting; no kneeling; no climbing ladders or stairs; no walking more than forty yards at a time; and no sitting or standing for more than thirty minutes at a time. The claimant’s vocational expert concluded that there was no reasonable vocational probability that claimant would be able to secure a job and maintain gainful employment. He testified she had a total loss of wage-earning capacity, despite noting that claimant expressed multiple times she would prefer to be working and productive.

The good news is the Full Commission, in keeping with it’s other extend benefits decisions, clearly states that the standard in extended benefits cases is different than the normal standard for proving entitlement to temporary total disability benefits.  Applying the revised standard set forth in the 2011 revisions to N.C. Gen. Stat. § 97-29(c), the Full Commission reiterated that to establish entitlement to extended compensation, a plaintiff must show that they have a total loss of the ability to earn wages in any employment.  See N.C. Gen. Stat. § 97-29(c) (2021).

However, the Full Commission found the vocational expert’s opinion credible and concluded there were no jobs in the job market within claimant’s functional capabilities. The Commission found ongoing disability for claimant’s pre-reform injury, and the Commission also found a total loss of wage-earning capacity due to her compensable injury for the second post-reform injury. Claimant was awarded ongoing medical benefits and TTD benefits for the pre-reform injury until claimant returns to work or until further order by the Commission and awarded extended benefits for the post-reform injury.  The Commission focused on claimant’s chronic pain, age, and length of time from being in any academic situation and relied on the only vocational expert to testify in the case to conclude that claimant has sustained a total loss of her wage-earning capacity.

Takeaways for Defendants

This Opinion and Award once again demonstrates the importance of expert testimony in these extended benefit cases.  The physicians deposed all found claimant’s pain complaints credible and either would not comment on claimant’s ability to work or deferred to a vocational expert as to whether there were jobs available that claimant could perform.  The only vocational expert that was deposed clearly testified that claimant had suffered a total loss of wage-earning capacity because of her restrictions and chronic pain complaints.  In order for defendants to successfully defend these cases, they must retain or have testimony from both medical and vocational experts that the claimant has some wage earning capacity.  If defendants can successfully present this evidence, past cases suggest that they will prevail and extended benefits will not be awarded.

Our team will continue to monitor the developments as this issue works its way through our court system. 

If you have questions or wish to discuss how to best position yourself in potential extended benefits matters, please reach out to Tracey Jones or a member of our Workers’ Compensation Team. 

Written by: Matt Marriott

Over the last year, we have seen an uptick in claimant attorneys requesting a second opinion on treatment options under N.C. Gen. Stat. § 97-25(b) and that defendants 1) issue a prepayment for that visit and 2) pay beyond the NCIC fee schedule amount for the visit.

Claimant attorneys argue there are not any medical providers in North Carolina who will accept payment of just the fee schedule amount for second opinion visits and do not require any prepayment.  Therefore, they contend they are being deprived of their right to a second opinion on treatment options under N.C. Gen. Stat. 97-25(b) if defendants do not pay a prepayment as well as more than the fee schedule amount for the visit.  Additionally, many attempt to argue that the NCIC Fee Schedule does not specifically lay out a billing code for second opinion on treatment options visits under N.C. Gen. Stat. 97-25(b).

While there is no binding case law from the NC Court of Appeals or Supreme Court on these issues, the Full Commission issued a decision in May 2022 that provides a comprehensive analysis explaining:

  • Defendants do not need to pay any kind of prepayment for a second opinion under N.C. Gen. Stat. 97-25(b),
  • Defendants do not need to pay beyond the fee schedule for that visit, and
  • The fee schedule amount for a N.C. Gen. Stat. 97-25(b) second opinion is $301.23.

Commissioners Taylor, Phillips, and Goodman explained in Wyatt v. The Golden Mint, Inc., I.C. No. 20-038523 (May 2022), that N.C. Gen. Stat. § 97-90 continues to prevent medical providers from forcing defendants to pay any kind of prepayment for a visit.  The Commission specifically stated:

The charges assessed by healthcare providers for medical compensation under the Act are subject to the approval of the Commission.  N.C. Gen. Stat. § 97-90(a) (2021).  No “physician or hospital or other medical facilities shall be entitled to collect fees from an employer or insurance carrier until he has made the reports required by the Commission in connection with the case.”  Id.  “[A] request for a specific prior approval to charge shall be submitted to the Commission for each such fee or charge.”  Id.  Any health care provider who willfully or intentionally undertakes to submit charges for health care that was not furnished is subject to an administrative penalty, assessed by the Commission, not to exceed ten thousand dollars.  N.C. Gen. Stat. § 97-88.3(a)(1) (2021).  The clear intent of N.C. Gen. Stat. §§ 97-26 and 97-90 “is to assure that medical and related expenses incurred by an injured employee for which the employer or his insurance carrier is to be liable shall be kept within reasonable and appropriate limits, and the responsibility for the enforcement of these limits rests upon the Industrial Commission.”  Morse v. Curtis, 20 N.C. App. 96, 99, 200 S.E.2d 832, 834 (1973), cert denied, 285, N.C. 86, 203 S.E.2d 58 (1974). Wyatt at 9-10.

In addition to confirming in Wyatt that N.C. Gen. Stat. § 97-90 prevents defendants from being compelled to pay a prepayment for a second opinion, the Commission also confirmed N.C. Gen. Stat. § 97-26 prevents defendants from having to pay beyond the fee schedule for a N.C. Gen. Stat. § 97-25(b) second opinion evaluation on treatment options.  The Commission held:

N.C. Gen. Stat. § 97-26(a) requires the Commission to adopt by rule a schedule of maximum fees for medical compensation.  The Commission, pursuant to that mandate and in compliance with the North Carolina Administrative Procedure Act, 150B et seq., has adopted 11 NCAC 23 Subchapter J Fees for Medical Compensation.  11 NCAC 23J .102(b)(1) sets the maximum reimbursement rate for professional services for evaluation & management at 140 percent of the Medicare base amount.  While the Act also contemplates instances in which the fee schedule does not apply to a particular type of service and in those instances, the maximum reimbursement to which the provider is entitled is “the usual, customary, and reasonable charge for the service or treatment rendered,” this option is only available when the Fee Schedule does not apply.  See N.C. Gen. Stat. § 97-26(c) (2021).  The Commission, in its discretion, takes judicial notice of American Medical Association, Current Procedural Terminology (CPT®) (4th ed. 2019) and specifically the full description of CPT code 99456.  Id. at 43.  Pursuant to the North Carolina Rules of Evidence, the Commission concludes that this information is capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.  See N.C. Gen. Stat. §8C-1, Rule 201(b) and (c).  In this instance, the fee schedule’s enumeration of services for “evaluation & management” and the CPT code 99456 description in its entirety contemplates examination by a non-treating physician with a medical history, exam with a diagnosis, assessment of capabilities and impairment, “development of future medical treatment plan; and completion of necessary documentation . . . .”  A 97-25(b) second opinion examination encompasses an extensive medical history, a physical exam, diagnosis, assessment of capabilities and impairment, and development of future medical treatment plan.  Thus, the Medical Fee Schedule and specifically CPT code 99456 contemplate and encompass the professional services involved in a second opinion examination. Wyatt at 8-9.

After verifying that defendants do not have to pay beyond the fee schedule for a second opinion evaluation on treatment options under N.C. Gen. Stat. § 97-25(b), the Commission established that $301.23 was the correct amount under the fee schedule for a second opinion under N.C. Gen. Stat. § 97-25(b), as laid out in CPT code 99456.

Practice Pointers and Takeaways

A decision from the Full Commission is not binding case law in the same way an opinion from the NC Court of Appeals or Supreme Court would be.  With that said, Wyatt establishes that the Full Commission sides with defendants about not being responsible for any kind of prepayment when a plaintiff requests a N.C. Gen. Stat. § 97-25(b) second opinion evaluation on treatment options, and about not being responsible for payment beyond the fee schedule for such a visit.

While this issue remains a hot topic and could evolve in the future once the appellate courts address the issue, for now, defendants are within their rights to not issue any prepayment or pay beyond the fee schedule when a plaintiff attorney is demanding that those conditions be met.

Finally, based on Wyatt, CPT code 99456 is the correct billing code to apply to a second opinion evaluation under N.C. Gen. Stat. § 97-25(b), and the correct fee schedule amount is $301.23 for such a visit.

Written by: John Tomei

In these challenging economic times, which include inflation and rising costs of workers’ compensation coverage, one way employers can reduce their workers compensation insurance coverage costs is to request the inclusion in their policies of deductible provisions. In addition to premium cost savings, deductible plans can improve employers’ cash flow, provide increased tax deductions, and allow for more control over workers’ compensation costs.

An excellent source of information regarding workers’ compensation insurance deductibles can be found in the North Carolina Rate Bureau’s North Carolina Workers Compensation Basic Manual, particularly in Rule 5 – Policy and Endorsements, sections of which are referenced in italics below. Rule 5 – Policy and Endorsements of the North Carolina Workers Compensation Basic Manual

In North Carolina, each insurer transacting or offering to transact workers’ compensation insurance in North Carolina may offer deductibles to employers.  Deductible coverage is affected by attaching the Benefits Deductible Endorsement, WC 00 06 03 to the policy. However, it is important to know that an insurer is not required to offer a deductible to an employer.

To the extent an insurer is agreeable to offering a deductible to an employer, deductibles may be available for total combined medical and indemnity benefits in amounts of $100, $200, $300, $400, $500, $1,000, $1,500, $2,000, $2,500, and $5,000 per claim. A selected deductible applies on a per claim basis.  More specifically, the deductible must apply separately to each claim for bodily injury by accident or disease.

A deductible does not affect the claims adjustment process. If a claim occurs, the insurer will investigate the injury, pay providers for medical treatment, and make disability payments to eligible workers. The insurer will then bill the employer for the deductible portion of the claim.  As noted in the Manual, the claim is first paid by the insurer, which will then be reimbursed by the employer for any deductible amounts paid by the insurer.  The employer is liable for reimbursement up to the limit of the deductible chosen.  The payment or nonpayment of deductible amounts by the employer to the insurer is treated under the policy insuring the liability for workers’ compensation in the same manner as payment or nonpayment of premiums.

The applicable loss elimination ratio (LER) represents the percentage of losses removed when an employer is responsible for losses up to the deductible amount. LERs vary by deductible amount and hazard group.  As one might expect, the LER is a key variable used in determining the policy premium credit.

So, the good news for employers in North Carolina is that deductibles are permissible, with varied amounts, on a per claim basis. The insurer pays the claim, and then seeks payment of its deductible from the employer thereafter. If the employer does not repay the insurer for the deductible amount paid by the insurer, then it is treated as non-payment of a premium. Understandably, the amount of the deductible has an impact on the loss elimination ratio (LER), which is used to calculate the policy premium credit.