Historically, Minnesota workers’ compensation permanent total disability benefits were subject to offset based on a disabled employee’s receipt of “old age and survivors insurance benefits.” Minn. Stat. § 176.101, Subd. 4. The Minnesota Workers’ Compensation Court of Appeals traditionally interpreted this statute to include public retirement pensions and benefits, including retirement benefits under the Teachers Retirement Association (TRA), the Minnesota State Retirement System (MSRS), and the Public Employees Retirement Association (PERA).
What this meant in practice is that if an injured worker was deemed to be permanently and totally disabled within the meaning of the Minnesota Workers’ Compensation Act, and that individual received a public retirement benefit under TRA, MSRS, or PERA, after the first $25,000.00 in permanent total disability wage loss benefits were paid, the workers’ compensation insurer was allowed reduce the workers’ compensation payments dollar-for-dollar based on the employee’s retirement benefit. For example, if the permanent total disability workers’ compensation benefit was the monthly equivalent of $2,500.00 per month and that same injured worker received a retirement pension of $2,000.00 per month, the workers’ compensation insurer would only have to pay the difference between the two – or $500.00 per month. In effect, this shifted the financial burden of a work injury to back to a permanently disabled injured worker.
On August 13, 2014, the Minnesota Supreme Court issued two opinions which dramatically reversed how retirement benefits are treated in the Minnesota workers’ compensation system. Ekdahl v. Independent School District #213 addressed TRA retirement benefits, and a companion case – Hartwig v. Traverse Care Center – addressed PERA retirement benefits. In short, the Court concluded that the offset rules apply only to Social Security benefits, and not other forms of retirement benefits. Note that this major change in the law also only applies to retirement benefits – not disability benefits under TRA, PERA, or MSRS.
It is clear that subsequent to these cases, any injured worker who is deemed to be permanently totally disabled for purposes of workers’ compensation will not be subject to any offset based on the receipt of TRA, MSRS or PERA retirement benefits. It remains unclear, however, whether the “old” offset rules or the “new” offset rules apply to cases involving injured workers who were deemed to be permanently totally disabled prior to the Court decisions in Ekdahl and Hartwig. Are these individuals entitled to have the offsets cease after the issuance of the Ekdahl and Hartwig decisions? Or, do they have a claim for an underpayment and recoupment of offsets that were deducted by the workers’ compensation insurer prior to the Ekdahl and Hartwig decisions? These are questions that have not yet been answered by the Courts.
What is clear is that if you are a retirement beneficiary and are receiving a retirement through TRA, MSRS, or PERA, and you are also receiving permanent total disability workers’ compensation benefits, it is imperative that you consult with an experienced Minnesota workers’ compensation attorney. You may be eligible for a higher weekly workers’ compensation benefit amount, or you may even be entitled to a substantial back payment.
Meuser Law Office, P.A. is one of the few workers’ compensation law firms in the state of Minnesota that also handles PERA and MSRS disability claims. We’ve successfully represented hundreds of police officers and firefighters throughout the state for both workers’ compensation and PERA/MSRS disability claims. Sitting down with us for a consultation to learn more about your potential claims is a lot like financial planning. We can explain what rights you have and make recommendations to you in terms of how to best protect your rights to those benefits. The knowledgeable attorneys at Meuser Law Office, P.A. can help make the process easier to navigate. Contact us today for a free, no-obligation consultation.