nsurance companies never want to overpay injured workers. Rarely, though, they make mistakes that lead to overpayment. As a result, a worker could see benefits reduced for a few months afterwards to make up for the mistake.
What Happens If an Insurance Company Overpays?
Minnesota workers legally can keep any overpayments of benefits that they receive after a work injury, with several key exceptions. First, a worker who receives and keeps an overpayment must do so in good faith. In other words, the worker is not trying to take any benefits for a fraudulent or deceptive reason. Since most overpayments result from insurance company mistakes unknown to the workers, the workers keep the payments until the insurers realize the mistakes.
Why Do Insurance Companies Overpay?
Insurance companies may overpay for several reasons:
- A worker’s wage rate changes but the insurance company doesn’t change the wage loss benefits to reflect the change
- The insurance company misplaces some paperwork
- The employer submits incorrect information to the insurance company
- The worker goes back to work but the insurance company keeps paying benefits
- The insurance company keeps paying past the maximum amount of wage loss benefits
What Happens When an Insurer Realizes Its Overpayment Mistake?
When an insurance company realizes that it overpaid (and most do eventually figure this out), then the employee may have to return the money. Instead of demanding a check right away, the insurance company may adjust future benefits payments until the overpayment gets credited back to the company.
Insurers can reduce benefits payments by up to 20 percent to receive proper credit for overpayments. They can impose these credits on temporary total disability benefits, temporary partial disability benefits, permanent partial disability benefits, and permanent total disability benefits, as well as retraining benefits or death benefits. The one type of benefits they cannot reduce is payment for medical expenses. Nor can the insurance company lower any penalties it owes to the worker for late payment or underpayment in the past.
Need help getting workers’ compensation for your injury? Joe Osterbauer, Esq. and the Osterbauer Law Firm stand up for injured Minnesota workers’ rights. Joe’s 27 years of workers’ compensation experience and his team’s speedy service combine to get clients the results they need. To schedule a free consultation, visit Osterbauer Law Firm online or call Joe’s office at (612) 334-3434.
