Boeing Co. v. Workers' Compensation Appeal Board

DISSENTING OPINION BY

Judge PELLEGRINI.

The issue on appeal is whether the Boeing Company (Employer) met all of the requirements necessary for reimbursement from the Supersedeas Fund under Section 443(a) of the Workers’ Compensation Act (Act)1 after making overpayments to one of its employees, Thomas Horan (Claimant). The overpayments resulted because the offset was not allowed against the compensation that it was required to pay for the amount of unemployment compensation benefits and severance pay that Claimant received after his departure from his employment. Reversing the Board, the majority finds that the Employer is making a claim for “compensation” that was not payable. I disagree with the majority because (1) the WCJ did not have jurisdiction to award and offset benefits and (2) even if he did, an “offset” is not “compensation” as used in Section 443(a) of the Act.

To recap the facts, Claimant was injured in 2004, returned to light-duty work and was ultimately laid off. After being laid off, he received unemployment compensation and severance pay. He filed a claim petition alleging a work injury, which Employer denied. Employer argued that it *105was entitled to an offset/credit for Claimant’s unemployment compensation and severance pay. The WCJ granted Claimant benefits but failed to mention Employer’s request for an offset in her decision. Employer appealed the WCJ’s decision raising, inter alia, the offset issue and filing a request for supersedeas. The Board granted supersedeas as to attorney fees but denied supersedeas in all other respects. Later, in the underlying case, the Board affirmed the grant of Claimant’s benefits but modified the WCJ’s decision after concluding that pursuant to Section 204(a) of the Act, 77 P.S. § 71(a),2 Employer was entitled to an offseVcredit for the unemployment compensation and severance benefits Claimant had received. This decision was not appealed.

Employer then filed its application for Supersedeas Fund Reimbursement, and the WCJ granted the application over opposition of the Bureau of Workers’ Compensation (Bureau). The WCJ ordered that the Supersedeas Fund reimburse Employer $25,526.47, the amount Claimant received in unemployment compensation and severance benefits. The Bureau appealed the WCJ’s decision to the Board under Section 204(a) of the Act. Agreeing with the Bureau, the Board reversed the WCJ’s decision reasoning that offset benefits were not subject to supersedeas because “Section 204(a) provided a specific remedy in cases where the claimant was receiving workers’ compensation and other funded benefits, not in reimbursement from the Supersedeas Fund.” (Reproduced Record at 117A.) Reversing the Board, the majority finds that by not allowing the offset, “[t]he Board’s determination effectively lowered the amount of workers’ compensation benefit payments to which Claimant was entitled based on the fact that Claimant had already received compensation for his lost wages through other means.”

First, I disagree with the majority because reimbursement from the Supersede-as Fund is not available for offset benefits not recognized in a claim petition because the WCJ does not have jurisdiction to award or not award in that type of a proceeding. The Bureau’s regulations implementing Section 204(a) of the Act are contained at 34 Pa.Code §§ 123.4-123.111. 34 Pa.Code § 123.4 addresses how an employer can obtain an automatic offset. It provides that an employer is entitled to an automatic offset if it receives Form LIBC-756 from a claimant that he or she is receiving benefits subject to offset or the employer takes it upon itself to file Form LIBC-761a because a claimant is receiving benefits subject to offset. To challenge an offset, the claimant must file a petition to review the benefit offset with the Department of Labor and Industry. Simply put, all that an employer has to do is receive or file a form to receive an offset and then it is up to the claimant to challenge the *106offset. In this case, once the award was entered, it was incumbent on Employer to file Form LIBC-761a which would have entitled it to an automatic offset but it failed to do so.

Because the only way a WCJ has jurisdiction over an offset claim is when a claimant files a petition for review challenging an employer’s automatic offset, a WCJ does not have jurisdiction to hear whether an offset should be awarded in a proceeding to establish initial benefits. Correspondingly, if the WCJ does not have jurisdiction over offset claims in a claim petition, then an employer cannot avail itself of reimbursement from the Superse-deas Fund. See City of Wilkes-Barre v. Workers’ Compensation Appeal Board (Spaide), 868 A.2d 620 (Pa.Cmwlth.2005), where an employer was not entitled to an offset because 34 Pa.Code §§ 123.4-123.111 provided the mechanisms by which an employer could offset workers’ compensation benefits, and we held that an employer was not subject to supersedeas fund reimbursement because an “Employer did not avail itself of the Bureau’s procedures.” Id. at 623.

Even if the WCJ has jurisdiction, I also disagree with the majority that an offset is not “compensation that was not, in fact, payable” as used in Section 443(a) of the Workers’ Compensation Act. “Compensation” as used in Section 443(a) of the Workers’ Compensation Act allows for reimbursement from the Supersedeas Fund for benefits that a claimant receives, not offsets that an employer can receive if it files the correct forms. Section 443(a) provides, in relevant part, that:

If, in any case in which a supersedeas has been requested and denied under the provisions of section 413 or section 430, payments of compensation are made as a result thereof and upon the final outcome of the proceedings, it is determined that such compensation was not, in fact, payable, the insurer who has made such payments shall be reimbursed therefore. (Emphasis added.)

The Act itself does not define “compensation” but as that term is used statutorily and in workers’ compensation cases, it has required employers to pay claimants’ medical payments and wage losses for injuries sustained in the course of their employment. See, e.g., 77 P.S. § 511, 513 (schedules of compensation). Nowhere in the Act or our case law does it state that compensation encompasses offsets/credits and an employer is required to pay offsets/credits as part of a claimant’s compensation. If offset/credits are not “compensation,” then they cannot be sought as part of a supersedeas request. This is supported by the fact that employer contributions to the Supersedeas Fund are based on both disability and medical compensation that have been paid out, not on anything else. That is why other costs, such as interest, attorney fees and litigation costs are also not recoverable from the Supersedeas Fund. See Universal AMCAN, Ltd. v. Workers' Compensation Appeal Board, 870 A.2d 961 (Pa.Cmwlth. 2005). By allowing an employer to take a credit say, for pensions, would require other employers who do not have that offset available to it to pay for other employers’ benefit policies.

Because the WCJ does not have jurisdiction in a claim petition to award offsets and the tem “compensation” as used in Section 443(a) does not include offsets/credits, Employer could not meet the last requirement for reimbursement to be granted from the Supersedeas Fund. For this reason, I would affirm the Board and respectfully dissent.

. Act of June 2, 1915, P.L. 736, added by the Act of February 8, 1972, P.L. 25, as amended, 77 P.S. § 999.

. Section 204(a) of the Act provides, in relevant part:

[I]f the employe receives unemployment compensation benefits, such amount or amounts so received shall be credited as against the amount of the award made under the provisions of sections 108 and 306, except for benefits characterized as "old age” benefits under the Social Security Act (49 Stat. 620, 42 U.S.C. § 301 et seq.) shall also be credited against the amount of the payments made under sections 108 and 306, except for benefits payable under section 306(c): Provided, however, That the Social Security offset shall not apply if old age Social Security benefits were received prior to the compensable injury. The severance benefits paid by the employer directly liable for the payment of compensation and the benefits from a pension plan to the extent funded by the employer directly liable for the payment of compensation which are received by an employe shall also be credited against the amount of the award made under sections 108 and 306, except for benefits payable under section 306(c).