The New Year usually means an adjustment to some benefit rates in the Nebraska workers’ compensation court. 2021 will be no different eventhough 2020 was an very unusual year.
Maximum benefit rate increased to $914 per week. This is a $32 increase from 2020 and a larger percentage increase from 2019 to 2020. I’m glad my concerns about the recession leading the Governor to move not to increase the maximum rate were unfounded.
Workers compensation benefits are 2/3rd of average weekly wage, so $914 per week works out to $1371 per week or $71,292 annually. If you are fortunate enough to make more than that amount, by law, you will be underpaid workers’ compensation benefits. Actually, workers’ compensation laws don’t account for overtime premium, you can also be underpaid workers’ compensation benefits if you earn less than $71,292 but earn substantial amounts of overtime.
Mileage reimbursement drops a half cent from $.58 per mile to $.575 per mile. This rate mirrors IRS reimbursement rate. The decline in the reimbursement rate can be explained by a decrease in gas prices. The mileage rate may seem like small potatoes, but it’s important in rural Nebraska where injured workers often need to travel long distances to seek specialized care.
Some major rural employers use the fact that some specialty providers have satellite clinics in small towns to argue they shouldn’t have to pay mileage benefits for employees who travel outside of small towns for specialty care. I think the failure to pay mileage is a way interfere with the right of an employee to chose their own doctor.
Discount rate stays at 5 percent – The discount rate on adjudicated permanent total disability awards remains at 5 percent. This means if a worker wants to reduce their lifetime award of permanent total disability benefits to a lump sum, they must use the 5 percent number under state law. Of course at settlement insurance companies use a higher discount rate which reduces lump sum payment. But in actuality, because of historically low interest rates, a discount rate lower than 5 percent should be used. A lower discount rate would result in higher lump sum settlements.
Reported injury rates continue to decline – The Nebraska Workers Compensation Court reported that reported injuries, as filings of First Reports of Injury, declined to 34,385 in the fiscal year ending on July 1, 2020. This continues a long standing decline in reported injuries. This could mean that working conditions are growing safer and or that the workers who are getting hurt are increasingly not covered by workers’ compensation. The increase in safety in manufacturing and the rise of the gig economy could support both conclusions.
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