Consequences of an Improper Suspension of Benefits

by David W. Willis, Esq.

The Georgia Court of Appeals recently addressed the notice issue involved with an employee's suspension of benefits. In Bolden v. S&B Engineers & Constructors, Ltd. (decided June 22, 2010) the Court examined the case of an employee who sustained a compensable burn injury to her left hand in June 2006. In November 2006 she began receiving TTD benefits. On March 26, 2007 the treating physician released the employee to light duty work. Unbeknownst to the employee, on April 9, 2007 the doctor indicated she had no more restrictions as related to the original accident. The insurer terminated the employee's benefits on April 24, 2007 without notice or the filing of a WC-2. A short time later the employee requested a hearing seeking a reinstatement of TTD benefits through May 9, 2008, the date she began working for a new employer.

The Court reviewed and cited to a number of previous decisions addressing the notice provisions involved with suspension of benefits. They first examined O.C.G.A.§ 34-9-221(i) and Board Rule 221 which set forth the requirements of an employer/insurer providing 10 days advance notice before suspending benefits based upon a full duty work release. Second, the Court revisited its decisions on several earlier cases dealing with suspension of benefits. The court noted that an improper WC-2 suspension of benefits in some instances may be only a technical violation. See, Sadie Mays Memorial Nursing Home v. Freeman, 295 S.E.2d 340 (1982)(holding an employer which provided the incorrect reason for suspension of benefits on the WC-2 nevertheless placed the employee on notice of a termination of benefits due to a change in condition); Reliance Electric. Co. v. Brightwell 643 S.E.2d 742 (2007)(holding that an employer who provided only six days notice before suspension of benefits needed only to pay the employee the remaining four days of benefits, plus 15% late penalties). However, in other instances the violation is not merely "technical."

Specifically, the Court analogized the case at hand to Russell Morgan v. Velez-Ochoa, 556 S.E.2d 827 (2001). In Russell Morgan, the employer filed a defective WC-2 suspension of benefits. The WC-2 in that case (1) gave the wrong reason for termination, (2) failed to include the required medical reports, (3) failed to explain how to challenge the decision, and (4) failed to give ten days notice before ending its payment of income benefits. The Court affirmed the State Board decision in holding the above defects were not mere technical violations but significant failures by the employer/insurer to afford the employee due process. Id. at 552. Similarly, in this case the Court found that the violation was not merely "technical" as the employer/insurer never filed a WC-2 at all and never explained to the employee why her TTD benefits were being terminated. The Court held that the employee was entitled to a reinstatement of benefits from April 24, 2007 (date of termination) until May 9, 2008 (date the employee returned to work) plus a 15% late payment penalty.
Moral of the story: best practice is to timely and correctly file a WC-2 , but at a minimum notify an employee in writing when benefits are being suspended!