Why Would You Have To Pay Back Workers Comp Benefits?

In most states, the insurance carrier who provided your workers compensation benifits would be granted the right to be repaid from any settlement in a lawsuit relating to workplace injury. This right is known as “subrogation”. 

However, this is not the only reason you would be required to pay back workers comp benefits. Below we explore a few examples of why this might happen:

Fraud or Misrepresentation: 

If an employee is found to have fraudulently obtained workers compensation benefits, they may be required to pay them back. For example, if an employee claims to have been injured on the job but it is later discovered that the injury occurred outside of work, the employee may be required to repay the benefits received. Similarly, if an employee misrepresents the severity of their injury or illness in order to receive more benefits than they are entitled to, they may be required to pay back the excess amount.

Return to Work:

If an employee is able to return to work while receiving workers compensation benefits, they may be required to pay back a portion of those benefits. This is because the purpose of workers compensation is to provide temporary financial assistance to employees who are unable to work due to their injury or illness. Once an employee is able to return to work, they are no longer in need of this financial assistance and may be required to pay back a portion of the benefits received.

Third-Party Settlement:

If an employee is able to obtain a settlement or judgment from a third party (such as the manufacturer of a faulty product that caused the employee's injury) for their injury or illness, they may be required to pay back a portion of their workers compensation benefits. This is because workers compensation is intended to cover the costs of an employee's injury or illness, and if those costs are recovered from another source, the employee may be required to reimburse the workers compensation insurance provider.

Overpayment: 

In some cases, an employee may receive an overpayment of workers compensation benefits due to an error or mistake. In these cases, the employee may be required to pay back the excess amount.

Disability Retirement:

 If an employee is receiving workers compensation benefits and also receives disability retirement benefits from their employer, they may be required to pay back a portion of the workers compensation benefits. This is because disability retirement benefits are intended to provide financial assistance to employees who are unable to work due to a disability, and the workers compensation benefits are also intended to cover the costs of an employee's disability.

If you have any questions regarding workers compensation, and your potential obligation to pay back your workers compensation benefits, as well as things to avoid doing if you awarded such, please contact us today at Shultz Legal - we are a Maryland-based firm,  here to help.