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What Does an Overpayment in Worker’s Compensation Really Mean?

In 1997, the Colorado Legislature created a statute that says that an overpayment is “Money received by a claimant [injured worker] that exceeds the amount that should have been paid, or which the claimant was not entitled to receive, or which results in duplicate benefits because of offsets that reduce disability or death benefits payable under said articles.” Section 8-40-201 (15.5), C.R.S.

That means that according to the statute, if a worker’s compensation insurer pays out money to an injured worker which the injured worker was not entitled to receive, the insurer has over-paid the injured worker and is entitled to either collect the overpaid money from the injured worker or have a future credit against future payments to the injured worker.

The question then becomes, when is an injured worker entitled or not entitled to receive the money? For the last several years, the courts have been determining this question.

Back in 2004, Mark Elliott, the owner of the Elliott Offices, won a landmark case in the Colorado Court of Appeals that stated that if an insurer paid money to an injured worker on a case which all parties agreed stemmed from a worker’s compensation incident, then the insurer could not collect any from the injured worker that it had already paid on mistake, by accident, or because the insurer changed its mind. This meant that there was no “overpayment” at any time to the injured worker. However, if a judge determined that the insurer had made a mistake, paid the money by accident, or that the insurer proved that the claim was not a worker’s compensation injury, the insurer was granted prospective relief – meaning that the insurer didn’t have to continue to pay the injured worker after the judge’s determination. Thus, an injured worker did not have to pay any money back to the insurer and that the insurance company was not entitled to a credit for any past paid benefits (except in cases of fraud).

Since then, the courts have continued to assess what is considered an overpayment. In recent years, the courts have determined that overpayments can occur when there are duplicative benefits being paid to the injured worker. This includes social security payments, unemployment benefits, or short-term disability. A court can also determine that there has been an overpayment when an injured worker performed an act of “wrongdoing.” This occurs when an injured worker is terminated because he/she did something inconsistent with the duties and rules of his/her job, like violating a safety rule of the business or using alcohol or drugs before coming to work. Finally, the courts have held that if an injured worker reaches a “cap” (the limit of money injured workers are entitled to collect for their particular disabilities in workers compensation cases in Colorado), that there may be an overpayment if the cap is reached from both temporary disability benefits and permanent disability benefits.

The Elliott Law Offices commends fellow attorney Elsa Martinez Terneiro, who won a hard fought battle in the CO Court of Appeals last year to ensure that injured workers who received more than the cap in just temporary disability benefits were entitled to keep that money (and not have an overpayment).

Mark Elliott will be presenting a continuing legal education course at the end of March 2014 to workers compensation attorneys on “both sides of the aisle,” that the courts are going too far in awarding overpayments to insurance companies, and that the injured worker should not ever have to pay back money he/she received from the insurance company, except in cases of fraud or duplicative benefits.


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Mark D. Elliott Attorney Photo
Mark D. Elliott

Since 1987, Mark D. Elliott has been a staple in the workers' compensation law community. As a member of the Phi Beta Kappa fraternity, he has the experience, passion and drive to succeed for any client in his respective fields of law.

Alonit Katzman Attorney Photo
Alonit Katzman

Since joining the Elliott Law Offices in 2011, Alonit Katzman has provided client-focused advocacy in the areas of workers' compensation, social security, criminal defense, and personal injury law.

James E. Elliott, Jr. Attorney Photo
James E. Elliott, Jr.
Founding Partner

James Elliott, Esq., the founder of the Elliott Law Offices, passed on April 13, 2018.  He is remembered for his hard work helping to create and refine the laws of the worker’s compensation arena. He obtained successful outcomes for his clients through both trials and appeals, and participated in creating and refining the law through…

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