Interest: The Most Overlooked WorkComp Benefit

Dec 18, 2024 | Benefits

Interest: The Most Overlooked WorkComp Benefit – If you’re entitled to lost wages, but the insurance company doesn’t pay it so you have to go to court and you win. However, the company appeals again and again, and after a couple of years, they finally pay you. Can you get anything for having to wait for your money?

Colorado’s law says that an insurance company has to pay interest at the rate of 8% per year on any sums of money that they should have paid out when they didn’t. Interest can make a difference.

Interest in wage loss

If for some reason the insurance company doesn’t want to pay lost wages and you have to go to court, by the time you get to a hearing in a Workers’ Compensation case it can be 3 to 6 months after you filed the paper to go to a hearing. You might have to wait even a full year.

Even then, if the judge rules in your favor that order won’t come down for another 30 days, plus the insurance company has 20 days to either pay it or appeal it, and if they appeal it can take another year.

When the insurance company finally pays you, you are also entitled to interest, for example, if they owe you $20,000, it would be $1,600 a year. Insurance companies don’t pay that automatically, so it helps to have a lawyer to make sure that it’s done.

Interest in Permanent Partial Disability Ratings

Permanent Partial Disability Rating is money you get once you’re placed at Maximum Medical Improvement for loss of body function, and often, it can be challenged or it can take a long time to get that money admitted to.

For example, the doctor might place you at MMI in January but the paperwork isn’t completed, the forms aren’t filled out, and the company doesn’t admit to that impairment rating until 6 months later, they should have started paying back when you were placed at MMI, but they didn’t for 6 months, you should get interest for those months you had to wait.

Another classic example is when the company doctor places you at MMI and says you’re 100% cured, but you disagree and go to a Division Independent Medical Exam with a doctor selected by the state of Colorado, and that doctor says that you do have an impairment rating.

That could be a year or more after your MMI, and the insurance company will say that they don’t have to pay interest because they didn’t know what your impairment rating was back then, but a good lawyer won’t accept that, that’s due from the day of MMI.