The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

The worker is appealing the decision made by the Workers Compensation Board ("WCB") that he was responsible for repayment of the overpayment of wage loss benefits. A hearing was held on February 14, 2017 to consider the worker's appeal.

Issue

Whether or not the worker is responsible for repayment of the overpayment of wage loss benefits.

Decision

That the worker is responsible for repayment of the overpayment of wage loss benefits.

Background

The worker has an accepted claim with the WCB for an injury to his left shoulder that occurred on June 6, 2013 when his feet slipped out from under him while exiting his truck.

On July 22, 2014, the worker's case was the subject of an oral hearing at the Appeal Commission to determine whether or not he was entitled to further benefits beyond August 30, 2013. On August 20, 2014, the appeal panel determined that the worker suffered an enhancement of a pre-existing left shoulder condition and was therefore entitled to further benefits beyond August 30, 2013. For complete details regarding claim history, please refer to Appeal Commission Decision No. 112/14 dated August 20, 2014. Subsequent to the panel's decision, the worker's wage loss benefits were reinstated effective June 9, 2013.

On July 24, 2015, the worker was advised by Compensation Services that he had been overpaid benefits which amounted to $65,054.49. The overpayment occurred as the worker had been in receipt of loss of income benefits from a specific insurance company (the "Insurer") concurrent to receiving WCB benefits. On August 25, 2015, the worker appealed the decision to Review Office. He stated:

Workers Compensation Board has been fully aware of my (name) Insurance Plan as a second payer since the very beginning of my claim. Workers Compensation has been in direct contact with (Insurer) since the commencement of my claim in 2013. Why is it now there is a problem and overpayment has been assessed against me. I feel that this is unfair and my benefits should be reinstated. I have been in contact with (Insurer) they have told me that they have documentation stating that your Workers Compensation employees have been in contact with them and told they were second payers and they had no relation to the Workers Compensation Board and they (Insurer) should not be considered as part of a work injury claim when this is personal business overhead protection plan that I myself have paid for and not involved the company, nor has the company paid into this plan that I was employed at time of injury. At no time was I advised until (case manager) brought this to my attention two years after the fact that (Insurance Plan) affected my claim with Workers Compensation.

On September 23, 2015, Review Office determined that the worker was responsible for repayment of the overpayment of wage loss benefits.

Review Office referred to specific file evidence to support that the worker was aware that he was not entitled to receive wage replacement benefits from two benefit carriers. The worker also signed forms acknowledging this and purposely left out or chose to not report his private insurance benefits.

Review Office also noted that the worker's overpayment amounted to $65,054.49; however, this amount did not include the monies he received from his group disability plan from October 2013 to February 2015. As this third plan noted they would not recover the money if the worker's private insurance was an individual plan and not a group plan, it was the responsibility of the WCB to factor this money in as well when considering the total amount of the overpayment.

On October 18, 2016, the worker appealed Review Office's decision to the Appeal Commission and an oral hearing was arranged.

Reasons

Applicable Legislation and Policy

The Appeal Commission and its panels are bound by The Workers Compensation Act (the "Act"), regulations and policies of the WCB's Board of Directors.

Subsection 4(1) of the Act provides that where a worker suffers personal injury by accident arising out of and in the course of employment, compensation shall be paid to the worker by the WCB.

Under subsection 4(2), a worker who is injured in an accident is entitled to wage loss benefits for the loss of earning capacity resulting from the accident, but no wage loss benefits are payable where the injury does not result in a loss of earning capacity during any period after the day on which the accident happens.

With respect to the calculation of loss of earning capacity, subsection 40(1) of the Act provides:

40(1) The loss of earning capacity of a worker is the difference between

(a) the worker's net average earnings before the accident; and

(b) the net average amount that the board determines the worker is capable of earning after the accident;

which amount shall not be less than zero.

Section 41(1)(a) of the Act defines the term "collateral benefit" to include "any periodic benefit the worker is entitled to receive under the Canada Pension Plan, the Quebec Pension Plan, the Employment Insurance Act (Canada), and a policy of disability insurance." Subsections 41(2) and (3) deal with collateral benefits and the determination of earning capacity and the calculation of wage loss benefits, respectively.

Subsection 41(4) provides:

41(4) Notwithstanding subsections (1) to (3), the board shall consider collateral benefits which the worker receives or is entitled to receive only to the extent that such benefits, together with the wage loss benefits otherwise payable under this Part, have the effect of compensating the worker in excess of 100% of the worker's actual loss of earning capacity.

WCB Policy 35.40.50, Overpayment of Benefits (the "Overpayment Policy") describes the principles that the Board of Directors has established to guide the WCB in its recovery of overpayments. The principles attempt to strike a fair balance between the WCB's fiscal responsibilities and the interests of injured workers.

The Overpayment Policy provides, in part, as follows:

4. Despite the provisions in Part 3, overpayments will be pursued for recovery where the following circumstances apply:

(i) there was fraud, deliberate misrepresentation or withholding of key information affecting benefits entitlement; or

(ii) the overpayment represents a duplication of benefits paid from another source for the same injury, for example Long Term Disability or CPP Disability benefits.

Appendix A to the Overpayment Policy, dealing with Policy Terminology, states in part:

Duplication of benefits from another source for the same injury may include payments from sources such as:

◊ employment insurance,

◊ CPP disability benefits,

◊ employer or personal disability insurance plans.

The key concept to be considered is the WCB's goal to avoid layering workers compensation benefits on top of other benefits to create a situation where the worker is receiving cumulative benefits greater than the amount of the financial loss incurred as a result of the compensable injury.

Worker's Position

The worker was self-represented at the hearing. The worker made a presentation to the panel, relying in part on a written submission dated October 18, 2016 which had been provided as an attachment to the notice of appeal.

The worker's position was that his overpayment deductions should cease and wage loss benefits should be restored to what had previously been established for 2013 and forward.

The worker submitted that from the outset of his claim and throughout, the WCB had full knowledge of the private insurance benefits he was receiving. A timeline of the Insurer's communications with the WCB was set out in the October 18, 2016 submission. Moreover, it was only when the WCB determined that the benefits would not have to be repaid to the Insurer that the WCB unjustly decided to demand that the worker repay the benefit payments from the WCB.

In the worker's view, the benefits from the Insurer and from the WCB were totally different. His private insurance policy was a business insurance policy. It was a combined policy which consisted of two components: business overhead protection insurance and disability insurance. The disability income which he received under his private insurance plan had nothing to do with the income or wage loss replacement which the WCB was supposed to have provided. Cheques from the WCB had come as wage loss income, while the benefits from the Insurer came as disability income.

It was submitted that to revoke retroactively the worker's WCB benefit entitlement and seek repayment was inequitable and unfair, and would cause the worker financial hardship. He is permanently partially impaired and unable to work as a result of the workplace injury. His expenses exceed his monthly income, and without the benefits from both the Insurer and the WCB, he would have been bankrupt. He said that his situation was different from others because he had a business and was still paying off business loans. The business overhead protection component was for business loans and expenses, but there was a maximum and it was for one year only. Once it ended, the money to cover those business loans and expenses had to come from the disability income.

Employer's Position

The employer did not participate in the appeal.

Analysis

The issue before the panel is whether or not the worker is responsible for repayment of the overpayment of wage loss benefits. For the worker's appeal to succeed, the panel must find that wage loss benefits paid to the worker by the WCB did not constitute a duplication of benefits which had been paid by the Insurer. The panel is unable to make that finding, for the reasons that follow.

The worker has argued that there was no duplication, that the benefits he received under his private insurance policy were disability benefits and entirely different from what the WCB provided or was supposed to provide. The panel is unable to accept that argument.

The panel notes that there is no issue with respect to the business overhead protection component of the private insurance policy. In the panel's view, it applied to other unrelated business matters. The issue relates to the second component of that plan, the disability or loss of income benefits. Information on file shows that on May 29, 2015, after the worker had indicated that he was receiving a disability benefit from the Insurer, the WCB wrote to the Insurer to request information regarding that benefit, including the period for which the worker had been paid by the Insurer, the amount of his ongoing benefit rate and a description of what the benefits covered. By letter dated June 25, 2015, the Insurer responded that the worker had been in receipt of loss of income benefits in the amounts of $3000 monthly effective June 8, 2013.

The panel notes that the letter from the Insurer expressly referred to the benefits the worker was receiving as "loss of income benefits." A copy of the policy book for the worker's policy and claim was then requested by the WCB and provided by the Insurer on July 15, 2015 and is on file. A copy of a letter from the Insurer to the worker dated November 28, 2014 providing him with a current status update "regarding your claim for Loss of Income Benefits," was also provided to the WCB at that time.

The panel has reviewed the policy book provided by the Insurer. We note that Section 3 is entitled "Loss of Income Benefit." The benefit provisions provide that "If an Insured person is Totally Disabled…, the company will pay the Loss of Income Benefit for each month during which the Insured Person remains Totally Disabled…" "Totally Disabled or Total Disability is defined to mean "Due directly to Injury or Illness the Insured Person is unable to perform the important duties of his Regular Occupation…" "Injury" is defined to mean "Accidental physical harm or damage sustained by the Insured Person while this Policy is in effect…"

The panel notes that the above provisions are similar to corresponding concepts under the Act. The Act thus provides for the payment of wage loss benefits to a worker where an injury to that worker results in a total and/or partial loss of earning capacity. "Accident" is defined in the Act to include any event arising out of and in the course of employment and as a result of which a worker is injured.

The panel further notes that the worker's claim under both the private insurance policy and the Act was based on injury to the same area of his body, his left shoulder. Payments made to the worker by both the Insurer under the policy and by the WCB were based on an inability to work as a result of that injury and a loss of income or earning capacity due to that inability to work. A copy of the worker's file and updates to that file had been provided to the Insurer at its request, and the panel is satisfied that the Insurer and the WCB would have been relying on essentially the same medical information to determine the worker's entitlement to such benefits.

Based on our review and analysis of the information on file and at the hearing, the panel finds that the wage loss benefits paid to the worker by the WCB, as noted in Compensation Services' letter of July 24, 2015, were a duplication of the disability or loss of income benefits paid by the Insurer.

While the worker also argued that the Insurer and the WCB were in contact and the WCB therefore had full knowledge of the benefits he was receiving from the Insurer, information on file shows that early communications between the Insurer and the WCB were relatively limited and essentially consisted of the Insurer asking the WCB for a copy of the worker's file, and updates to the file, which were then provided by the WCB.

The panel notes that following the August 20, 2014 Appeal Commission decision reinstating the worker's wage loss benefits, the WCB wrote to the worker to confirm any other income he might be receiving. The WCB's letter, dated September 4, 2014, stated, in part:

The amount the Workers Compensation Board pays you can be affected by other income you receive. To make sure the amount we are paying you is correct, it is important that we know about any other money you are receiving. Examples of other income includes overtime, wage increases, bonuses, second jobs, collateral benefits from other sources, etc. (as outlined in the attached sheet.)…

You can help us prevent overpayments and the inconvenience they can cause by telling us of any change in your income. If we pay you more than you are entitled to receive, we will have to collect it back from you.

On the attached sheet, the worker was asked whether he was "receiving money from any of the following? (Please check all that apply)." The worker checked "yes" beside "Company Disability Plan", and noted as the effective date October 2013, and that health benefits were to stop after the first cheque from the WCB. He checked "no" for all of the other boxes, including "Private Insurance" and "Any other source." The worker signed and dated the sheet, and returned it to the WCB on September 8, 2014. When asked at the hearing why he wrote "no" and did not refer to his policy with the Insurer, the worker said that it was "because they had all the information…they had authorization for [the Insurer]" and "he did not see any reason to do that."

Information on file also shows that the worker was specifically advised at the beginning of the claim, in a letter dated June 24, 2013, that WCB benefits could be affected by other income or benefits and that the total amount of his WCB wage loss benefits plus any collateral benefits he might receive, could not exceed 100% of his net actual earnings. What the worker is seeking to do is to retain and not have to repay wage loss benefits received in excess of 100% of his net actual earnings. In the panel's view, that is not permitted under the Act.

The panel would add that the worker did not challenge or present any information with respect to the amount or calculation of the amount of the overpayment on his appeal. Accordingly, the panel makes no findings or comments with respect to the amount of the overpayment or overpayment calculations.

Based on the foregoing, the panel finds that wage loss benefits paid to the worker by the WCB constituted a duplication of disability or loss of income benefits paid by the Insurer, and the worker is responsible for repayment of the overpayment of wage loss benefits.

The worker's appeal is dismissed.

Panel Members

M. L. Harrison, Presiding Officer
A. Finkel, Commissioner
M. Kernaghan, Commissioner

Recording Secretary, B. Kosc

M. L. Harrison - Presiding Officer
(on behalf of the panel)

Signed at Winnipeg this 13th day of April, 2017