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Double Dipping: Self-funded/Self-insured Disability Plans and Workers’ Compensation

For those of you in Minnesota and whom have self-funded/self-insured disability plans, this blog is for you. Attorney firm Peterson, Logren & Kilbury, P.A. put together a short summary of the recent Minnesota Supreme Court decision regarding the case Bruton v. Smithfield Foods, Inc., 923 N. W. 2d 661 (Minn. 2019).

The dispute in this case was whether or not an employee, whose work comp claim was originally denied and then later accepted, should have been paid lost wages under workers’ compensation law for the time the employee was medically excused from work even though the employee had already been paid under the employer’s short term disability plan for the same time period.

The court found that since there was nothing under the workers’ compensation statues or within the employer’s short-term disability plan that allowed for an offset in this situation, the employee was able to receive benefits under both plans, i.e., the employee got to double dip!

The summary also notes that, “had the employer’s short term disability plan contained a claw back provision allowing for the repayment of short term disability benefits…they would have been able to seek a credit for the short term disability benefits paid.”

The law firm recommends that if your company has a self-funded short term disability and/or a self-funded long term disability plan you should amend your plans to provide that any payments made in short term/long term disability benefits is a credit against workers’ compensation payments in the event the two forms of payments coincide.

I hope this was helpful. Thanks for reading!

Click on the image to the left to read the Peterson, Logren, & Kilbury summary