Benefits: Medical & Disability

Our lawyers' goal at Lundmark, Barberich, LaMont, & Slavin, P.C., is to help our clients — carriers, employers, third-party administrators and municipalities — better understand medical disability and death benefits payable to injured employees under the Arizona Workers' Compensation Act.

An Overview Of Medical, Disability And Death Benefits

The Arizona Workers' Compensation Act is intended to provide medical and disability benefits to workers injured as a result of work-connected accidents, and death benefits to the dependents of workers killed in such accidents, without regard to the fault of either workers or employers.

Medical Benefits

The applicable statute entitles an employee to coverage for "medical, surgical and hospital benefits or other treatment, nursing, medicine, surgical supplies, crutches and other apparatus, including artificial members, reasonably required at the time of the injury, and during the period of disability." A.R.S. § 23-1062(A). Medical care intended to replace a bodily function that is lost as a result of an industrial injury, may well be covered. See, e.g. Terry Grantham Co. v. Industrial Commission, 154 Ariz. 180, 741 P.2d 3 13 (App. 1987) (allowing home modifications and a specially equipped van for a paraplegic); and Regnier v. Industrial Commission, 146 Ariz. 535, 707 P.2d 333 (App. 1985) (allowing artificial insemination when an industrial injury deprived the employee of fathering a child in the normal way).

A distinction is made between "active" and "supportive" care. The former includes all medical care reasonably required until the employee's condition becomes "stationary," a status that is reached when no further treatment is likely to affect the permanent improvement of his or her condition. "Supportive" or palliative care is allowable after the employee's condition becomes stationary, even though the Workers' Compensation Act does not specifically provide for such care. See Capuano v. Industrial Commission, 150 Ariz. 224, 722 P.2d 392 (App. 1986).

The Industrial Commission recognizes as a "physician" a "licensed physician or other licensed practitioner of the healing arts," A.A.C. R20-5-102. An employee may utilize treatment "by prayer through spiritual means in accordance with the tenets and practice of a recognized church or religious denomination by a duly accredited practitioner thereof," as long as the Industrial Commission has no objection to such care. See A.R.S. § 23-1061 .01. Chiropractic care is covered if reasonably required. Capitol Foundry v. Industrial Commission, 117 Ariz.37, 570 P.2d 808 (App. 1977).

The applicable statute conditions coverage "upon notice to the employer." A.R.S. § 23-1062(A). The Arizona Supreme Court, however, has held that unless the employer has been prejudiced, an employee is entitled to coverage for all treatment that is reasonably required, whether or not prior notice is given. See Lasiter v. Industrial Commission, 173 Ariz. 56, 839 P.2d 1101 (1992).

Unless an employer is a "self provider" of medical care, an employee is free to choose his or her own doctor. A "self provider" is a self insurer that satisfies criteria established by the Industrial Commission for directing medical care. Employees of self providers cannot usually change doctors absent compelling circumstances, whereas all other employees may change doctors with the written permission of the Industrial Commission, attending doctor or carrier. Cf. A.A.C. R-20-5-l13(E) with A.R.S. § 23-1071(B). If an employee continues to see a doctor to whom he or she is sent by the employer for an initial assessment, then that doctor becomes the attending physician. See A.A.C. R20-5-l13(E).

Employers are entitled to have employees undergo independent medical examinations. Such examinations are permitted "from time to time" A.R.S. § 23-1026(A). An employee's failure to appear for a properly noticed independent medical exam may result in the imposition of sanctions.

For further details about the medical benefits available to employees, see Chapter 6 of the Arizona Workers' Compensation Handbook.

Disability Benefits

Disability benefits are payable for the total or partial loss of earning capacity that an employee may sustain as a result of an accident, whether the disability is temporary or permanent. These benefits, payable for as long as the employee's disability lasts, are based on a specified percent of the employee's "average monthly wage," which, in 2012, was capped at $4,026.29. The basic formulas are as follows:

  1. TTD = 66-2/3 percent of the employee's average monthly wage, payable every 14 days
  2. TPD = 66-2/3 percent of the difference between the employee's average monthly wage and post-injury earning capacity, payable every 30 days.
  3. PPD = 55 percent of the difference between the employee's average monthly wage and post-injury earning capacity, payable every 30 days.
  4. PTD = 66-2/3 percent of the employee's average monthly wage, payable every 30 days.
    Arizona makes a distinction between "scheduled" and "unscheduled" permanent impairments. The former generally refers to injuries to limbs. A scheduled permanent impairment will entitle an employee to permanent disability benefits as outlined by the applicable statute, regardless of whether the impairment has reduced his or her earning capacity. See A.R.S. § 23-1044(E). Permanent disability benefits for unscheduled impairments, on the other hand, are available only when the impairment has reduced the employee's earning capacity.

Certain injuries are presumed to be totally and permanently disabling. These include (1) the total and permanent loss of sight in both eyes, (2) the loss of both feet or hands, (3) the complete paralysis of both legs or arms, or one leg or one arm from the same accident, (4) an injury to the skull "resulting in incurable imbecility or insanity," and (5) the loss of one hand and one foot. A.R.S. § 23-1045(C).

The Industrial Commission retains jurisdiction to adjust or "rearrange" an employee's permanent disability benefits. The permanent disability award can be adjusted upon proof that the employee's earning capacity has changed either as a result of an improvement or decline in his health, or other circumstances. A.R.S § 23-1044(F).

Vocational rehabilitation is not mandatory. The Industrial Commission, however, does provide vocational rehabilitation at its own expense, when the criteria that's programmed can be satisfied. The employer is not required to contribute to the cost of such retraining.

Permanent disability awards can be commuted to a lump sum. The Industrial Commission may allow computation of a scheduled award for an amount not to exceed $25,000, with or without the consent of the carrier. The Commission may allow computation of an unscheduled permanent disability award for a sum not to exceed $150,000, but only with the consent of the carrier. A.R.S § 23-1067. Given the availability of settlements in workers' compensation cases, however, computations are rarely sought nowadays.

In an effort to encourage the hiring of the handicapped, the Industrial Commission maintains a "special fund" known in other jurisdictions as a "second injury fund" — that is available to reimburse carriers and self-insuring employers for certain pre-existing conditions. Second injury relief is available for 25 enumerated pre-existing conditions, if a number of criteria can be satisfied. Among other criteria, the employer must show that before the employee's industrial injury, the employer knew about that employee's pre-existing handicap.
For further details about disability coverage in Arizona, see Chapter 7 of the Arizona Workers' Compensation Handbook.

Death Benefits

The death of an employee may give rise to three different kinds of claims.

A claim for death compensation benefits can be brought by a surviving spouse, child, parent, or sibling, in that order of priority. A spouse, for example, is eligible to receive 66- 2/3 percent of the decedent's average monthly wage until death or remarriage. Spouses and natural children are conclusively presumed to have been dependent upon the employee at the time of death.

A claim for burial expenses may be brought by either the undertaker or the party that paid for them. This benefit is capped at $5,000.

Finally, the personal representative of the employee's estate may make a claim for the medical expenses and disability benefits that had accrued before the decedent died.

Only those classes of persons specifically enumerated by statute are eligible to receive death compensation benefits. A surviving spouse, for example, must have been legally married to the deceased employee at the time of injury, but Arizona will recognize marriages — including common law marriage — when they are valid where contracted.
Claims for death compensation benefits must be made within one year of the decedent's death, but the statute is tolled for minors. A.R.S. § 23-l06l(A).

For further details about disability coverage in Arizona, see Chapter 7 of the Arizona Workers' Compensation Handbook.

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