The case was Bradley Westphal v. City of St. Petersburg (Read More Here). The Florida 1st District Court of Appeal determined that the 104-week maximum duration of TTD benefits defined by Florida statutes is unconstitutional, which reestablished the previous 260-week limit.

Westphal sustained severe injuries and received TTD benefits for the allowed 104 weeks. However, since he had not reached maximum medical improvement at the time, he was denied permanent total disability benefits and was ineligible for benefits even though he was incapable of working. The DCA said the “statutory gap” created violated his constitutional right to receive justice without denial or delay.

NCCI analyzed the potential impact of the case, looking specifically at temporary disability claims, permanent disability claims, medical benefits, and direct and indirect costs. The organization said studies have shown indirect costs could be 50 percent or more of the direct impact.

The analysis concluded:

•Temporary disability claims. The potential impact on these would be at least $30 million since the TTD benefit duration increased from 104 weeks to 260 weeks, NCCI said. Included are estimated indirect costs. Changes in claimant behavior could drive indirect cost increases if, for example, some injured workers were to delay returning to work since the TTD benefits would not be terminated after 104 weeks.

•Permanent disability claims. While the decision likely would have a minimal impact on permanent total disability claim costs, it could impact the healing period for permanent impairment benefit claims. NCCI estimates that could increase by $25 million.

•Medical benefits. While there would be no estimated direct impact on medical costs, NCCI said there is a potential for an indirect impact as a result of the decision. Claimants may alter their behavior and attempt to delay reaching MMI in order to continue receiving TTD benefits. The costs for medical care prior to a claimant’s receiving MMI are generally higher than they are once MMI is reached. That could add an estimated $10 million to system costs.

•Additional considerations. Increased litigation will likely follow the decision, NCCI said, as employers and injured workers seek clarity. “This will result in additional impacts on the workers’ comp system … such as increased administrative costs, higher insurers’ loss adjustment expenses, and likely delays in reaching settlements and the determination of awards to claimants.” Additionally, NCCI said the court could determine the 260-week limit on TTD benefits is also unconstitutional, which could increase costs further.

The Westphal case involved an injured emergency responder (Mr. Westphal) who suffered back and leg injuries on the job and had not yet reached maximum medical improvement when his 104 weeks of temporary total disability benefits expired. Mr. Westphal was denied permanent total disability benefits because he was not at maximum medical improvement and therefore awarding partial total disability benefits was viewed as “too speculative.” Nine months later, after he was awarded permanent total disability benefits, Mr. Westphal brought suit against the City of St. Petersburg and the State of Florida for the statutory gap in his disability benefits caused by the exhaustion of his temporary total disability (TTD) benefits before he was eligible for permanent total disability (PTD) benefits.

The appellate court unanimously held that the 104-week time limit on TTD benefits is unconstitutional because it denies severely injured workers the right to the “administration of justice without (…) delay” as provided in the Florida Constitution. Further, because the workers compensation system requires injured workers to forgo common law rights of recovery for damages for an injury, subjecting the severely injured worker to “personal ruination” to collect full benefits “is not merely unfair, but is fundamentally and manifestly unjust.”

The ruling will automatically be reviewed by the Florida Supreme Court. If allowed to stand, all open and future claims will be governed by this decision. (The court did not retroactively apply the ruling to closed claims.) Contractors subject to Florida workers compensation law should work with their insurance representatives to anticipate the impact this decision may have on their workers compensation insurance programs.