(Article quoting Preston J. Garvin)

Recent legal developments in workers compensation have not been favorable for businesses, with supreme courts in Ohio, Texas, Pennsylvania and New Jersey handing down decisions against employers on issues such as medical reimbursements, the suspension of benefits, and compensability for volunteer activities.

Self-insured employers in the Buckeye State had little to be thankful for from the Ohio Supreme Court’s decision in State ex rel. Manor Care Inc. v. Bureau of Workers’ Compensation, published the day before Thanksgiving.

The court ruled that a self-insured employer that was overpaying the Disabled Workers’ Relief Fund could not obtain a writ of mandamus compelling the Bureau of Workers’ Compensation to reimburse it or award a credit against its future liabilities.

In Ohio, self-insured employers pay permanent total disability compensation directly to injured workers, and the BWC pays relief fund benefits. The bureau then levies assessments on self-insured employers for the exact amount paid to their respective workers.

After an audit revealed Manor Care Inc. had been underpaying PTD benefits to two employees for several years, the BWC ordered the self-insured employer to make lump-sum payments to the workers to correct the underpayments.

The workers had never been undercompensated despite the underpayment of their PTD benefits because they received more from the relief fund than they should have. Manor Care had also paid the total amount of benefits the workers were due because the Disabled Workers’ Relief Fund assessments were equal to the amount the fund paid the workers.

Manor Care, therefore, objected to making the lump-sum payments, contending that if it were making up the PTD shortage, it was entitled to a refund of the overpayments to the DWRF in the same amount.

The BWC refused the reimbursement, and the Ohio Supreme Court found that Manor Care was not entitled to mandamus relief.

Attorneys Preston J. Garvin and Michael J. Hickey represented the Ohio Chamber of Commerce and Ohio Self-Insurers Association as amici in the case. Mr. Garvin said their argument had been based on the equitable idea that, “if you underpay one fund, and overpay the other, you should get a credit for what was overpaid.” He said the court agreed with that, but “we lost … because there was no statute or rule that had been violated.”

Robert “Buz” Minor, a retired Ohio attorney who serves as the executive director of the National Council of Self-Insurers, said the Supreme Court’s ruling was “not an equitable result,” as the workers were “double compensated” and the “employer paid twice what it should have.”

The Supreme Court acknowledged that its conclusion “offends notions of fairness,” and it specifically advised that its decision did not foreclose Manor Care from seeking an equitable remedy by other means. Mr. Garvin said he thought it was clear “the court felt something should be done,” but that he would defer to Manor Care’s attorneys — David M. McCarty, Randall W. Mikes and Jane K. Gleaves — as to what that should be.

Information regarding Texas, Pennsylvania and New Jersey is is available in the full article on the website www.businessinsurance.com.

Sherri Okamoto is a legal reporter at Work Comp Central, a sister publication of Business Insurance.