Connecticut Supreme Court Significantly Shifts Workers’ Compensation Benefits

The Connecticut Supreme Court recently ruled in Gardner v. Department of Mental Health and Addiction Services¹ that workers’ compensation administrative law judges (ALJs) can award ongoing temporary partial disability (TPD) benefits to claimants who reach maximum medical improvement (MMI), rather than require conversion of TPD benefits to permanent partial disability (PPD) benefits. The ruling upends decades of decisions to the contrary and significantly shifts the interplay between temporary and permanent workers’ compensation benefits following significant reforms to the state’s Workers’ Compensation Act in 1993. 

How We Got Here

The plaintiff suffered a work-related injury to her left wrist while employed with the Connecticut Department of Mental Health and Addiction Services (DMHAS). Notwithstanding surgery, the plaintiff continued to suffer persistent pain. A second surgery improved her symptoms but left her with physical restrictions. Unable to return to her position, the plaintiff was terminated from employment. 

Both the plaintiff’s own provider and an independent medical examiner determined that she had reached maximum medical improvement. An ALJ approved the employer’s request to discontinue temporary benefits because she had reached MMI. The ALJ rejected the plaintiff’s argument that he had the discretion to continue her TPD benefits in lieu of converting her to PPD benefits under Conn. Gen. Stat. §31-308(b). 

The plaintiff appealed to the Compensation Review Board, which agreed with the ALJ’s ruling, citing legislative history to conclude that ALJ discretion to continue temporary benefits was eliminated by the legislature in its 1993 reforms. The plaintiff appealed to the Connecticut Appellate Court, which affirmed the Board’s decision. The Connecticut Supreme Court then granted certification for review. 

The Connecticut Supreme Court’s Analysis 

The issue on appeal was whether an ALJ has authority to continue TPD benefits to a claimant who has reached MMI and is therefore eligible to receive PPD benefits. In reversing the appellate court’s decision, the Connecticut Supreme Court rejected its use of legislative history to limit the statute, holding instead that clear and unambiguous language of Conn. Gen. Stat. §31-308 affords the ALJ such discretion:

"We disagree with the Appellate Court and conclude that §31-308(b) gives an administrative law judge the discretion to award a claimant, after he or she reaches maximum medical improvement, ongoing temporary partial incapacity benefits under §31-308(a) in lieu of permanent partial disability benefits under §31-308(b), up to the statutory maximum of 520 weeks."

The court said it was not required to defer to the Compensation Review Board’s interpretation of Conn. Gen. Stat. §31-308 because it was neither “time-tested,” nor had it previously been “subject to judicial scrutiny” so as to warrant deferential treatment. The court also noted that the remedial nature of Connecticut’s workers’ compensation law favors broad statutory construction. 

Workers’ compensation benefits generally fall into two categories: special or specific. TPD benefits under §31-308(a) are special benefits that continue as long as there is an impairment of earning power, subject to statutory limitations. In contrast, PPD benefits under §31-308(b) compensate a claimant for permanent loss and are awarded for a fixed period based on the degree of permanent impairment. A claimant cannot receive benefits for incapacity and specific indemnity benefits at the same time. 

Traditionally, injured employees have been awarded TPD benefits under §31-308(a) during their period of incapacity only until the employee reaches MMI.² At that point, they are eligible for PPD benefits for a fixed number of weeks, based on the percentage of permanent impairment to a specific body part or parts. For example, pursuant to §31-308(b) an employee who suffers total hearing loss in one ear is entitled to benefits for 35 weeks. If the claimant has a 10% PPD to that ear, the claimant is entitled to 10% of the 35 weeks, or 3.5 weeks of PPD benefits. In most cases, once the claimant reaches MMI, the payment of PPD benefits ends the employer’s obligations.

The Connecticut Supreme Court found, however, that § 31-308(b) permits, but does not require, the ALJ to award PPD benefits in lieu of other compensation, which includes total or partial disability benefits after a claimant reaches MMI and the claimant’s eligibility for PPD benefits vests. The court noted that continuation of TPD benefits may be particularly appropriate where an ALJ believes that the PPD benefit calculated under the statutory schedule would be disproportionate to the impact of the injury on the claimant. 

What This Means for Employers

Time will tell whether ALJs will routinely exercise discretion to continue TPD benefits post-Gardner or follow the traditional path of converting TPD to PPD benefits once MMI is reached. Gardner is silent about whether the decision applies retroactively, so we will also have to wait to see whether ALJs will allow reopening of claims to reinstate TPD benefits. Employer and insurer lobbyists have aggressively argued at the state legislature that Gardner will cause higher workers’ compensation insurance premiums and that the decision must be overridden by statute. Whether any legislative fix will pass, and if so, what form it will take, is uncertain at this point. The one clear result of Gardner has been to disrupt the previously settled expectations of both claimants and employers.