Specific Loss Benefits Awarded Under PA Workers’ Compensation Not Always Paid

There are several types of benefits which can be received by an injured worker in Pennsylvania.  A comprehensive review of these benefits can be seen here on our website.  One of those benefits is called “specific loss,” which contains things like loss of use of a body part and disfigurement of the head, face or neck (though House Bill 930 could expand disfigurement beyond the head, face or neck).

Importantly, specific loss benefits cannot be received while the injured worker is still receiving “temporary total disability” benefits (essentially, what we call total wage loss benefits).  Again, at least as far as disfigurement, this could change with House Bill 930.

What if the injured worker dies before the temporary total disability benefits stop?  Surely, the specific loss benefits, since already “awarded” would be paid to the estate, right?  Nope, wrong.  The full answer is that it depends what caused the death of the injured worker.

The case of Streets v. Celebration Fireworks, Inc. (Workers’ Compensation Appeal Board) was recently decided by the Commonwealth Court of Pennsylvania.  Here, unfortunately, the injured worker was catastrophically injured in an explosion of a fireworks display.  A Claim Petition and a Review Petition were filed to appropriately describe the injury.  In the decision, the Workers’ Compensation Judge (WCJ) found the work injury to entail, “’multiple body parts amputation, traumatic brain injury/anoxic encephalopathy with significant cognitive impairment, septic shock, respiratory failure, dysphagia, quadriparesis, bowel and bladder incontinence, and loss of use of both arms.’”  Besides finding the loss of use of both arms, the WCJ also concluded that the impairment was permanent.  Thus, when temporary total disability benefits stopped, the injured worker would be entitled to specific loss payments for the loss of use of both arms.  Or, at least that is how it should have gone.

Instead, sadly, the injured worker died as a result of the work injury.  Specifically, she died “of complications from bilateral pneumonia caused by her work-related respiratory deficiency.”  The workers’ comp insurance carrier, in their most benevolent of actions, immediately stopped paying any benefits.  Had the deceased injured worker left dependents, the Pennsylvania Workers’ Compensation Act (“Act”) would have dictated what benefits would be paid to the surviving dependents.  Since there were no dependents in this case, no such payments were required.  The estate of the deceased injured worker filed Claim, Review and Penalty Petitions.

The WCJ granted the Claim Petition, but dismissed the Review and Penalty Petitions.  The workers’ compensation insurance carrier was ordered to pay solely funeral expenses (to a maximum of $7,000.00, as set forth in the Act).  This decision was affirmed by the Workers’ Compensation Appeal Board.

So, we have the actual award of specific loss benefits prior to the death.  We have the WCJ, and the law, saying the payment of these benefits would happen after temporary total disability benefits stop.  How does the insurance carrier escape this payment?  The answer is deep within the Act.

The Commonwealth Court of Pennsylvania observed that Section 306(g) of the Act sets forth that specific loss benefits are inheritable if the death is not caused by the work injury (though, if there are no dependents, only to the extent of reasonable funeral costs).  Critically, the Court found (in a footnote) that by addressing this topic, Section 306(g) created a right to which the specific loss benefits “as already entitled, but which she did not collect, are heritable.”  By exclusion, if the death is a result of the work injury, then there is no such right.  The Court also cited to a prior case of the Commonwealth Court, Est. of Harris v. Workers’ Comp. Appeal Bd. (Sunoco, Inc.), decided in 2004, on very similar facts.

In summarizing their holding, the Court said, “Thus, based on Section 306(g) of the Act and applicable precedent, when an employee dies due to a work injury while collecting total disability benefits and before specific loss benefits are payable, the only specific loss payments due are reasonable (up to $7,000.00) funeral expenses to be paid to the funeral home.”

The injured worker argued (quite logically) that the prior case was simply wrong.  As noted by the WCJ in the original decision, “Claimant’s [c]ounsel has argued that the right to the specific loss benefit became vested when it was awarded by [the WCJ in Steets I] and that the vested right passed from Claimant to her estate.”  This was dismissed throughout the appellate process.

A strong dissent argued that the specific loss payments should have been awarded to the estate under Section 410 of the Act, which says, “’In case any claimant shall die before the final adjudication of his[/her] claim, the amount of compensation due such claimant to the date of death shall be paid to the dependents entitled to compensation, or, if there be no dependents, then to the estate of the decedent.’”  The majority held that the matter had been adjudicated by the WCJ, so Section 410 did not apply.  On the other hand, the dissent observed that the initial litigation remained on appeal at the time of the death, so there had not been a “final adjudication.”

This just feels like an unfair result, which is hard to reconcile with the words the Supreme Court of Pennsylvania likes to throw around, like “The Act is to be liberally construed, with borderline interpretations resolved in favor of the injured employe” and “The Act is remedial legislation designed to compensate claimants for earnings loss occasioned by work-related injuries.”  The majority of the Commonwealth Court of PA simply shrugged and said “not our problem.”  And, for that, we can only say shame on them.