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A self-insured employer is not entitled to subrogation against third party settlement for benefits the claimant received during time he was receiving his full salary under the Heart and Lung Act.

July 1, 2018
Commonwealth of Pennsylvania v. WCAB (Piree); 995 C.D. 2017; filed Apr. 4, 2018; Judge Cohn Jubelirer

In its appeal to the Commonwealth Court, the employer maintained that it was entitled to subrogation to the extent of the compensation payable under the Workers’ Compensation Act, not withstanding the claimant’s concurrent receipt of Heart and Lung benefits. The employers’ third party administrator paid the claimant’s weekly workers’ compensation benefits from the employer’s workers’ compensation fund directly to the employer’s payroll fund. According to the employer, workers’ compensation benefits were still payable, even though not directly to the claimant, while he received Heart and Lung benefits. Therefore, they were entitled to subrogate against the third party settlement by the amount its workers’ compensation fund reimbursed its payroll fund.

The Commonwealth Court rejected this argument and affirmed the Workers’ Compensation Appeal Board. Guided by legal precedent, the court held that a self-insured employer cannot subrogate that portion of benefits it paid to a claimant pursuant to the Heart and Lung Act. The court remanded the case for a determination regarding the employer’s entitlement to subrogation for benefits paid solely while the claimant was entitled to benefits under the Workers’ Compensation Act.

 

Case Law Alerts, 3rd Quarter, July 2018

Case Law Alerts is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2018 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.

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