COVID-19 Resource Center

July 01, 2014

The Importance of Being Earnest in Sending LIBC Forms

Recent developments in the case law promulgated by the Commonwealth Court highlight the importance of an employer regularly issuing LIBC 750, 756, and 760 forms, and puts the onus on the employer rather than on the claimant for reporting receipt of other benefits that could offset Workers’ Compensation.

By way of background, the Act provides various credits to offset Workers’ Compensation benefits when a claimant receives benefits other than Workers’ Compensation. These noble provisions of the Act are aimed at preventing a double recovery for the claimant. Section 204(a) of the Act, which authorizes the offset, is silent on how that offset is to be effectuated, but directs the Department of Labor and Industry to prepare the necessary forms.

As directed by the Act, the Bureau promulgated a regulation that provides a claimant report to the employer any amounts received in unemployment compensation, old age Social Security, severance, and pension benefits on form LIBC-756, “Employee’s Report of Benefits.” 34 Pa. Code §123.3.9. This form must be issued to the claimant every six months. Muir v. WCAB (Visteon Systems LLC), 5 A.3d 847, 853 (Pa. Cmwlth. 2010). The claimant must complete Form LIBC-756 and forward it to the employer within 30 days of receiving the offsetable benefit. 34 Pa. Code §123.3(b).

The issues regarding these reporting forms arise when the claimant has been receiving a pension or other benefit that would offset his Workers’ Compensation benefits for longer than the six-month reporting period. In those cases, the employer desires a retroactive, full credit, whereas the claimant argues that a credit with a reduction of benefits to recoup the credit would create a financial hardship on the claimant and must be limited or disallowed.

In the recent case of City of Pittsburgh and UPMC Benefit Management Services, Inc. v. WCAB (Wright), ___ A.3d ___ (Pa. Cmwlth., No. 329 C.D. 2013, filed May 1, 2014) (City of Pittsburgh I), the court addressed this issue. In this case, the claimant initially received full salary after the work injury, but his benefits were later transferred to Workers’ Compensation. The claimant received his first Workers’ Compensation check at the end of June 2005, and as of May 30, 2005, elected to take a pension. On August 8, 2005, the employer filed a Notice of Benefit Offset against Workers’ Compensation for receipt of the pension. The Notice also indicated that a credit of $100 would be deducted every week until the overpayment for the period from June to August had been recouped. The claimant challenged the entitlement to recoupment and alleged that the $100 deduction would cause a financial hardship.

The court discussed the prior case law and specifically addressed the case of Maxim Crane, where the claimant received social security retirement benefits for two years and the employer sought a retroactive credit. The court noted that the employer failed to provide the claimant with LIBC forms at any time prior to her receipt of those benefits, never notifying her of the reporting obligations. Furthermore, the employer’s delay in sending LIBC forms was unreasonable and, therefore, the recoupment was disallowed.

But what happens when a claimant is notified at some point about the reporting obligations? In Muir, the employer sent LIBC forms in 2005 and again in 2007. The claimant reported that he had been receiving social security retirement benefits since 2006. The employer sought to recoup the offset dating back to 2006. The court stated that an employer does not have an “absolute right to a retrospective credit.” Muir, 5 A.3d at 852. Rather than relying on the doctrine of laches like Maxim Crane, the court relied on the wording of the Act to determine that the employer should issue these forms every six months. Effectively, the responsibility was placed on the employer/insurance carrier to send these forms as “it is not reasonable to expect a claimant… to remember this reporting requirement after a single notification by the employer.” Wright.

The court then applied this case history to the matter of Wright and read Muir to allow a recoupment if benefits were received six months prior to the LIBC forms being sent without any analysis on hardship to the claimant, which was suggested by Maxim Crane. Retroactive credits in excess of six months will be reviewed on a hardship basis with a presumption that there is a hardship to the claimant.

What It Means to You

In every case where the claimant is receiving benefits, it is a good practice to send LIBC forms every six months to ensure that the appropriate credits are taken. If the forms are not sent, it may result in the claimant receiving double benefits with no ability to recoup any overpayment