Many people choose to make resolutions on the first day of a new year; however, so many of us fail to follow through with those resolutions. This year, I would challenge you to make a fresh start by putting procedures in place to prevent the South Carolina Workers' Compensation Commission from issuing fines to you. This article will address (1) the reasons the Commission issues fines, (2) the procedures for contesting an unwarranted fine, and (3) ways to prevent being fined in the future.
Incurring Fines
As you may know, the Commission regularly issues fines to insurance carriers, third party administrators, and self-insureds for failure to file forms, pay compensation, and authorize medical treatment. The Commission also routinely issues fines for improperly suspending or terminating compensation benefits.
With regard to the failure to file forms, the following fines are the most prevalent:
- Failing to file the Form 18 every 6 months from the date of the accident until the file is closed with the Commission;
- Failing to file a Form 15 within 10 days after compensation begins or is terminated; and
- Failing to file a Form 12A within 10 business days of the employer's representative's knowledge of the accident when an injury requires $2,500 or more in medical treatment or results in compensable lost time or permanency.
Additionally, the Commission regularly assesses fines for:
- Failing to file a Form 19 along with a denial letter to close a file when the claim is denied or failing to file a Form 19 within 16 days after the final payment of compensation;
- Failing to file a Form 17 within 31 days from the date the claimant returned to work to terminate temporary compensation following the first 150 days after the employer's notice of the injury or, within the 150 day period, to document that the claimant agrees he or she is able to return to work; and
- Failing to file a Form 20 within 30 days of beginning temporary compensation or, if no temporary compensation has been paid, when the employer's representative requests an informal conference or hearing, or within 30 days of the claimant's request for an informal conference or hearing.
With regard to failure to pay compensation, the Commission can assess a 10% penalty if compensation payable under the terms of an agreement or an award is not paid within 14 days after it becomes due. Moreover, if a party fails to authorize medical treatment or pay benefits after ordered to do so by the Commission, the Commission may impose sanctions of up to $500 per day for each day of the violation.
The Commission can also require a carrier or employer to pay a 25% penalty, computed on the amount of benefits withheld, to the claimant when the carrier or employer improperly suspends or terminates temporary compensation. Because the claimant receives the amount of the penalty, the claimant benefits by asking the Commission to assess this penalty when their temporary compensation is not received in a timely manner.
Contesting Fines
When assessing fines for failing to file forms, the Commission must provide written notice of the failure to file a form and the amount of the fine. The requested form must then be filed by the party or its representative and the fine must be paid within 30 days. If the form is not filed and the fine is not paid or if a review of the fine has not been requested within 30 days, then the Commission will issue an order.
In some instances, unwarranted fines are issued by the Commission. When this happens, the party can write a letter to Greg Line, the Director of Claims, within 30 days of the fine being assessed. The fine will then be reviewed and a letter will be sent out to rescind, reduce, or uphold the fine. Within 14 days of receiving a letter upholding the fine from the Director, the party or its representative can write a letter to the Director to request a Show Cause Hearing.
In order to support a claim to rescind a fine, a copy of the form that was stamped received by the Commission prior to the fine being assessed must be sent to the Commission. In the alternative, if the Commission has set up duplicate files, a letter must be sent to the Commission advising of the duplicate files and showing that the appropriate form was filed timely in the original file.
Preventing Fines
To prevent fines for failing to file forms, two copies of the form with a self-addressed, stamped return envelope should be sent to the Commission. Once received by the Commission, the approved copies of the forms will be mailed back on the same day they are stamped received. In addition, a list can be obtained from the Commission showing all open files which then can be compared with the carrier's list to ensure that the file in question has been closed. If the file is not closed, it is imperative that a Form 18 is filed every 6 months or a Form 19 is sent to close the file.
When closing a file, the file should be reviewed to ensure that it includes a stamped copy from the Commission of all forms that were previously sent. If the file is missing a stamped copy of a form, a copy of the unstamped form should be sent with the final Form 19 to close the file.
It takes the cooperation of others to prevent fines for failure to pay compensation or authorize medical treatment. When an order is issued requiring a party to pay compensation or authorize medical treatment, the attorney for the party must immediately relay that information. Thereafter, steps must be taken within 14 days to deliver the check or inform the medical provider that the treatment is authorized. The costly penalties for non-compliance can be imposed immediately thereafter, so it is imperative that orders of the Commission are satisfied within 14 days.
To prevent fines for improperly terminating temporary compensation, special attention must be given to the rules outlined in South Carolina Code Section 42-9-260 and Regulations 67-504, 67-505, and 67-506. Of importance, after the first 150 days after the employer's notice of the injury, terminating temporary compensation can no longer be done unilaterally. If the claimant will not sign a Form 17 to allow his temporary compensation to be terminated, an attorney should be consulted to file a request for a hearing to terminate temporary benefits. It only takes a few minutes to consult the statutes and regulations to ensure that temporary benefits are being properly terminated; however, the money saved by avoiding a 25% penalty can be significant.
The Commission is authorized to retain and expend all revenues received as a result of fines they issue for failure to file forms. As such, and considering the General Assembly reduced the Commission's budget by over 30% since 2008, Commission fines are on the rise. In fact, the Full Commission, with authority granted by South Carolina Code Section 42-3-105, voted to double the fines beginning April 1, 2009. Consequently, it is now more important than ever to resolve to file forms timely, pay compensation or authorize medical treatment within 14 days when ordered, and follow the proper procedures for suspending or terminating temporary compensation. By doing this, you will save time and money this New Year.
If you would like more information about Commission fines or how to contest them, please contact Michelle Yarbrough or any of the Gallivan, White & Boyd, P.A. Workers' Compensation Team members.
Michelle DeLuca Yarbrough is a partner on the workers' compensation team at Gallivan, White, & Boyd, P.A. She may be reached at myarbrough@gwblawfirm.com or 864-271-5349.
