Decision regarding unconstitutional offset law given retroactive effect

In Utah, workers' compensation payments made to claimants receiving retirement benefits after the court published its Merrill v. Utah Labor Comm'n opinion on April 24, 2009, are not subject to a 50 percent reduction in benefits.

Case name: Merrill v. Utah Labor Commission, et al., No. 20070584 (Utah 12/04/09).

Ruling: The Utah Supreme Court held that a prior ruling declaring an offset provision in Utah's Workers' Compensation Act unconstitutional would be given limited retroactive effect.

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What it means: In Utah, workers' compensation payments made to claimants receiving retirement benefits after the court published its Merrill v. Utah Labor Comm'n opinion on April 24, 2009, are not subject to a 50 percent reduction in benefits.

Summary: In April 2009, the Utah Supreme Court found unconstitutional a provision of the Workers' Compensation Act that reduced benefits to claimants receiving both workers' compensation benefits and Social Security retirement benefits. The provision reduced workers' compensation benefits by 50 percent of the amount of their Social Security benefits. The insurer petitioned the Utah Supreme Court to determine whether the court's holding applied retroactively. It argued the court's holding should only apply prospectively "in light of the insurance industry's reliance on the offset and the burdens that would be imposed by retroactive operation." The court limited the application to payments made after the ruling's publication date, regardless of the date of injury.

It also determined that the ruling applied to administrative orders issued by the Labor Commission and therefore allowed workers to recoup past payments. However, the court declined to apply the ruling to past settlements, explaining that "the process of compromise is too multifaceted and context driven to permit unwinding."

An injured worker originally contested the application of Utah's workers' compensation offset law because it discriminated based on age. The court agreed that the offset provision violated the uniform operation of laws provision of the Utah Constitution.

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February 1, 2010

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