Opinion
W.C. No. 4-452-141
July 1, 2002
FINAL ORDER
The respondent seeks review of an order of Administrative Law Judge Mattoon (ALJ) which increased the claimant's average weekly wage for purposes of calculating medical impairment benefits to include the claimant's conversion cost for employer provided health and dental insurance. We affirm.
In 1999 the claimant suffered a work-related injury. At the time of the injury the employer made a flex payment of $234 per month, which the claimant could use to buy health insurance. On May 24, 2001, the claimant's employment and the employer provided health insurance terminated.
The respondent filed a final admission of liability on August 28, 2001. They admitted for permanent partial disability benefits from February 21, 2000 through November 24, 2003 at the rate of $279.61 per week, based on an average weekly wage of $491.77. The admitted wage did not include the cost of health and dental insurance. The claimant objected to the final admission and requested an increase of the average weekly wage to include the conversion cost of the employer provided health and dental insurance.
The ALJ found the COBRA premium to replace the employer provided health and dental insurance is $476.55 per month, or $109.97 per week. Therefore, the ALJ increased the average weekly wage to $601.74 for purposes of calculating admitted liability for permanent partial disability benefits.
On appeal the respondent contends the ALJ erroneously relied on Humane Society of the Pikes Peak Region v. Industrial Claim Appeals Office, 26 P.3d 546 (Colo.App. 2001), and our holding in Gutierrez v. Plan de Salud del Valle, Inc., W.C. No. 4-257-435 (January 12, 2001), to increase the average weekly wage. The respondent contends Humane Society was wrongly decided and that Gutierrez does not address the inequity created by the ALJ's order. Further, the respondent contends there is no statutory method which allows the recalculation of medical impairment benefits after the payment of such benefits has commenced. They also argue it is unfair to the respondent to increase its liability for permanent partial disability benefits after some permanent partial disability benefits have been paid, and contravenes the respondent's expectation of finality. In addition, the respondent contends it is unfair to include the full "conversion" cost of health insurance because it is controlled by market factors independent of the claimant's service to the employer. The respondent also argues that any increase should be dependent on proof the claimant actually purchased replacement coverage and limited by the amount the employer paid for similar insurance during the employment. We reject these arguments.
Medical impairment benefits are calculated at the temporary disability rate, which in turn is based on the average weekly wage. Section 8-42-107(8)(d), C.R.S. 2001; Broadmoor Hotel v. Industrial Claim Appeals Office, 939 P.d. 460 (Colo.App. 1996). Section 8-40-201(19)(a), C.R.S. 2001, states that if the claimant is injured during employment where the employer provided group health insurance coverage and the coverage is subsequently terminated, the average weekly wage shall include the employee's replacement cost of the group health insurance coverage. See Humane Society of the Pikes Peak Region v. Industrial Claim Appeals Office, supra; Schelly v. Industrial Claim Appeals Office, 961 P.d. 547 (Colo.App. 1997).
The respondent's arguments notwithstanding, it is well established that § 8-42-102(3), C.R.S. 2001 affords the ALJ discretion to recalculate the claimant's disability rate for medical impairment benefits by increasing the average weekly wage. Pizza Hut v. Industrial Claim Appeals Office, 18 P.3d 867 (Colo.App. 2001); Campbell v. IBM Corp., 867 P.2d 77 (Colo.App. 1993). The increased average weekly wage may include the claimant's cost of replacing employer provided health insurance benefits. Humane Society of the Pikes Peak Region v. Industrial Claim Appeals Office, supra; Schelly v. Industrial Claim Appeals Office, supra; Kenney v. Bi Incorporated, W.C. No. 4-276-317 (October 9, 1998) , aff'd Kenney v. Vigilant Insurance/Chubb Group of Insurance Companies (Colo.App. No. 98CA2072, May 27, 1999) (not selected for publication).
We conclude the respondent's specific arguments concerning the proper application of § 8-40-201(19)(b) were previously considered and rejected by the courts in Schelly and Humane Society. In particular, the courts determined the "conversion" cost of health insurance was not measured by the "employer's" contribution to the cost of such insurance during the employment. The courts also rejected an argument that § 8-40-201(19)(b) requires proof the claimant has actually purchased replacement health insurance. Rather, the Schelly court concluded the purpose of the statute is to insure the disabled claimant has "access to funds" to purchase similar or lesser health insurance if the claimant chooses to apply disability benefits to that expense. The courts have pointed out the claimant does not actually receive the full cost of conversion, but only two-thirds of that amount. Finally, in both Schelly and Humane Society, the courts concluded that depending on the particular facts of the case, inclusion of the claimant's conversion cost may favor either party.
We are bound by published decisions of the Court of Appeals. Furthermore, the ALJ's order is consistent with the holdings in Schelly and Humane Society. Therefore, the ALJ did not err by increasing the average weekly wage to include the claimant's conversion cost of health and dental insurance.
The respondent's arguments notwithstanding we also perceive no appreciable distinction between the facts in Gutierrez v. Plan de Salud del Valle Inc., supra, and the circumstances presented here. Here, as in Gutierrez, the claimant sought and obtained an order increasing the average weekly wage after maximum medical improvement (MMI) for purposes of calculating an award of medical impairment benefits. On appeal the insurer in Gutierrez argued § 8-40-201(19)(b) applied only to temporary disability benefits. In rejecting this argument, the Panel reasoned that because the legislature chose to incorporate the claimant's average weekly wage, which by statute includes the cost of health insurance in the calculation of both temporary and permanent disability benefits, there was no statutory basis to create a different method for determining average weekly wage when the issue involved permanent rather than temporary disability benefits. Although the ALJ was not bound by the Panel's holding in Gutierrez, the ALJ was free to consider the Panel's reasoning in rejecting the respondent's contention that the requirements of § 8-40-201(19)(b) do not entitle the claimant to a redetermination of the average weekly wage for purposes of calculating medical impairment benefits.
Moreover, our authority to review the ALJ's order is defined in § 8-43-301(8), C.R.S. 2001. It follows that the respondent's policy argument that § 8-40-201(19)(b) is inherently inequitable presents an issue for the General Assembly, not this forum. See Duran v. Industrial Claim Appeals Office, 883 P.2d 477 (Colo. 1994); Avis Rent-A-Car System v. Allstate Insurance Co., 937 P.2d 802 (Colo.App. 1997). The respondent's further arguments have been considered and do not alter our conclusions.
For his part, the claimant contends the respondent's appeal is frivolous and requests we remand the matter for the imposition of "sanctions." We understand the claimant to be requesting an award of costs and attorney fees pursuant to § 8-43-301(14), C.R.S. 2001.
Section 8-43-301(14) states that attorney fees may be awarded against an attorney who submits a petition to review or brief in support of a petition "which is not well grounded in fact and warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law." Although we are not persuaded by the respondent's arguments, we decline to award attorney fees. See General Cable Co. v. Industrial Claim Appeals Office, 878 P.2d 118 (Colo.App. 1994) (argument for adoption of new rule of law not frivolous).
IT IS THEREFORE ORDERED that the ALJ's order dated March 6, 2002, is affirmed and the claimant's request for costs and attorney fees is denied.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ David Cain
____________________________________ Kathy E. Dean
NOTICE
This Order is final unless an action to modify or vacate this Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, CO 80203, by filing a petition for review with the Court, within twenty (20) days after the date this Order is mailed, pursuant to § 8-43-301(10) and § 8-43-307, C.R.S. 2001. The appealing party must serve a copy of the petition upon all other parties, including the Industrial Claim Appeals Office, which may be served by mail at 1515 Arapahoe, Tower 3, Suite 350, Denver, CO 80202.
Copies of this decision were mailed July 1, 2002 to the following parties:
Samuel Sanchez, 1036 Carteret Ave., Pueblo, CO 81004-2447
Cathy Icabone, Pueblo County, 215 W. 10th St., Pueblo, CO 81003
Jim Vail, CTSI, 1700 Broadway, #1512, Denver, CO 80290
Lawrence D. Saunders, Esq., 125 W. "B" St., Pueblo, CO 81003 (For Claimant)
David J. Dworkin, Esq., 3900 E. Mexico Ave., #1300, Denver, CO 80210 (For Respondent)
BY: A. Hurtado