Employer-paid insurance premiums not included in wage calculation
Case name: Lydy v. Trustaff, Inc., No. 12-081 (Vt. 06/28/13).
Ruling: The Vermont Supreme Court held that employer-paid health insurance premiums were not included in calculating a nurse's average weekly wage.
What it means: In Vermont, employer-paid health insurance premiums are not included in calculating an injured worker's average weekly wage.
Summary: A traveling nurse was temporarily stationed in a nursing home. A patient attacked her, causing her to suffer an acute cervical sprain. The employer accepted responsibility for her injuries under workers' compensation. The employer had no available jobs within her restrictions, and the nurse moved to another state. She found a new job and worked until her physician recommended that she stop working. The employer began paying temporary total disability benefits. When calculating her average weekly wage, the employer did not include the health insurance premiums paid by the nurse's new employer. The nurse asserted that the employer-paid health insurance premiums should be included in her AWW. The Vermont Supreme Court held that the employer-paid health insurance premiums should not be included in the calculation of her AWW.
Wages, as defined in the workers' compensation law, include "bonuses and the market value of board, lodging, fuel and other advantages which can be estimated in money and which the employee received from the employer as part of his or her remuneration." The court pointed out that the health insurance system was not in place when the legislature defined wages, and it did not amend the definition to include employer-paid health insurance. Therefore, the court concluded that the legislature did not intend the benefit to be a part of a worker's AWW.
The court found that the employer's contribution for health insurance did not accurately reflect the nurse's labors or compensation as defined through wages. The court declined to "judicially legislate what would amount to a large increase in compensation costs" and said the legislature should decide whether a worker's AWW should include employer-paid health insurance premiums.
A dissenting judge opined that the legislature did not intend to exclude employer-paid health insurance premiums from a worker's AWW.
Read more at the WorkersComp Forum homepage.
September 30, 2013
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