Millions of employees suffer work-related injuries or illnesses each year. In some cases, workers never fully recover and suffer permanent physical or mental limitations. When this happens, workers' compensation provides the worker with a permanent disability award.
Scheduled Versus Non-Scheduled Loss
While each state has a different formula for establishing the amount of a worker’s permanent disability award, the overall process for calculating benefits is similar across the board. In most states, including New York and Illinois, the calculation depends on whether the injury is a “scheduled” injury. A scheduled injury is one that involves loss of use of a specific body part, such as a shoulder, knee, wrist, hand, foot, eye, or ear. In these cases, permanent disability benefits are calculated by using a schedule issued by the state (see below).
Many injuries are not included on the schedule, including injuries to the head, spine, organs, and bodily systems (such as the respiratory system or reproductive system). Occupational diseases are also not included on the schedule. For non-scheduled injuries, there are a few different ways that states calculate benefits. To learn the different methods, see How Are Permanent Partial Disability Benefits Calculated?
Calculating Benefits for a Scheduled Injury
A state schedule lists out each body part and assigns a maximum number of weeks for which a worker could receive benefits. For example, New York’s schedule states that a worker may receive up to 312 weeks for an arm injury. This means that if you have a 100% loss of use of your left arm, you would receive 312 weeks’ worth of benefits. If you have only a partial loss of use, you would receive benefits for a proportionate number of weeks. For example, if you have a 50% loss of use of your left arm, you would receive benefits for 156 weeks (312 weeks × 50%).
During this time, you will typically receive two-thirds of your average weekly wages, subject to a maximum cap set by state law. However, some states pay a slightly higher or lower amount. For example, in Illinois, you will receive only 60% of your average weekly wages. To figure out your total award, you would multiply your weekly benefit amount by the total number of weeks that you are entitled to benefits.
Example: You live in New York, where your weekly benefit is two-thirds of your average weekly wages, subject to a maximum of $844.29 per week (in 2015). Before your accident, you made $600 per week. Your weekly benefit amount is $400 (two-thirds × $600). Your doctor gave you a 50% disability rating for your left arm, which means you are entitled to 156 weeks of benefits. Your total award will be $62,400 ($400 × 156).
Some states, including California, take a slightly different approach. Instead of having a schedule of body parts, California looks at the worker’s disability rating as to the body as a whole. For example, for an injury to the arm, the worker might have a 20% disability rating overall. The disability rating is then plugged into a state chart, which lists the total number of weeks for which the worker will receive benefits. The worker would receive two-thirds of his or her average weekly wages (subject to a maximum set by law) for the number of weeks stated. (For more information, see Can I Get Permanent Disability Benefits in My Workers’ Compensation Case in California?)
How the Disability Rating is Determined
You will be eligible for permanent disability benefits once your doctor finds that you've reached maximum medical improvement, which means that your condition has reached a point where it’s not likely to improve in the next year or so. At this point, your doctor will decide whether you have a permanent impairment as a result of your injuries. If you do, the doctor will issue a report assigning you a disability rating.
Once that happens, the insurance company will look at your case and decide whether it agrees with your doctor's opinion. If the insurance company disagrees with the disability rating assigned by your doctor, it may request a independent medical examination (IME) by a doctor of its choosing. It’s common for the IME doctor to give you a lower rating than your treating physician, which can lead to a complicated and drawn-out legal battle over how much you are owed.
If there’s a dispute between you and the insurance company about the degree of your disability, or how much you’re entitled to in permanent disability benefits, you should talk to an experienced workers' compensation attorney right away. An attorney can help you get all of the benefits you're entitled to under the law.