Facts of the case:
Our client was employed as a Nurse at a local hospital. She was injured when a shelf of medical supplies fell on her. Virginia trial lawyer Doug Landau went to court in Alexandria and won an Award for injuries to her: left knee, back, right shoulder, right thumb and kidney. Wage loss benefits were paid at the rate of $206.02 based upon an average weekly wage of $309.03. While Fairfax Hospital “provided her with health insurance, the cost of the insurance was not included in the calculation of her pre-injury average weekly wage.” The uncontroverted testimony was:
Q: …[Nurse McKaveney] did you get health insurance for you and your son through your job at Inova [Fairfax Hospital]?
A: I did have insurance for both of us through Inova.
Q: And that wasn’t part of what they calculated for your comp rate, was it?
A: No, it was not.
In this decision, rendered over ten years after the original on the job injury, the Court of Appeals decision denied the insurance company’s attempt to have these same insurance benefits included in her earnings so as to get a credit of over $20,000.00.
The decision had been appealed to the Full Commission on the limited issue of whether the health insurance premiums paid by a subsequent post-injury employer should be considered earnings. On October 4, 2006, the Commission reversed and held that the health insurance premiums were not made in lieu of wages.
Case law precedent:
Claimant’s counsel had relied upon Coakley v. Stafford Renovations, VWC File No. 176-19-16 (1999). As in McKaveney, Coakley’s:
“only remuneration was in the form of a perquisite, health insurance. The Commission has uniformly held that the value of fringe benefits should not be included in the calculation of pre-injury average weekly wage. The Commission has considered this issue on prior occasions and declined to include the cost of medical and life insurance premiums paid by the employer (Boggs v. Equitable Construction Company, Inc., 60 OIC 45 ; Gajan v. Bradlick Company, 4 Va. App. 213, 355 S.E.2d 899 ) or the value of an employer’s contribution to a union health and welfare fund (Hillyard v. Giant Food, Inc., 60 OIC 206 ).
Nurse McKaveney’s employer provided her with health insurance and the cost of this insurance, pursuant to the Commission’s rulings, was not included in the calculation of her pre-injury average weekly wage. In Mabe v. Happy Stores, (VWC File No. 139-34-48), where the claimant secured light duty work, which, in addition to wages, also provided fringe benefits, such as health insurance, the employer sought to reduce its indemnity liability by the amount of this insurance. The Commission held, “we cannot include this figure [for his family’s health insurance] in calculating [the claimant’s] average weekly wage. ”
The lesson in Doug Landau’s client’s case is that while not every “perk” or item of value is included in the calculation of a Virginia Worker’s compensation benefits, the insurers and employers will seek a credit or to deny benefits all together by those same perks and advantages of employment.
The Full Commission and the Court of Appeals realized in the McKaveney case, that what is “good for the goose is good for the gander.” That is to say, if the insurance carrier is not going to give compensation based upon health insurance received from the employer prior to an on the job injury, they cannot get a credit or seek money from the claimant because they secure health insurance after their workplace accident. In other words, employers and insurers in Virginia “cannot have their cake and eat it too.”
Fairfax Hospital vs. McKaveney, VLW 007-7-359(UP); 22 VLW 582-583