IN THE SUPREME COURT OF IOWA

No. 14–2097

Filed June 3, 2016

Amended September 20, 2016

DAVID LOWELL EVENSON,

Appellant,

vs.

WINNEBAGO INDUSTRIES, INC. and SENTRY INSURANCE COMPANY,

Appellees.

Appeal from the Iowa District Court for Winnebago County, 

Gregg R. Rosenbladt, Judge.

Petitioner appeals from district court judgment affirming on 

judicial review workers’ compensation commissioner’s decision. 

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

Mark S. Soldat of Soldat, Parrish-Sams & Gustafson, PLC, West 

Des Moines, for appellant.

Steven T. Durick and Joseph M. Barron of Peddicord, Wharton, 

Spencer, Hook, Barron & Wegman, LLP, West Des Moines, for appellee.
2

ZAGER, Justice.

In this appeal, we are asked to decide whether an employer’s 

matching contributions to an employee’s 401k plan should be considered 

part of weekly earnings for purposes of calculating workers’ 

compensation weekly benefits. We must also decide whether the district 

court erred in affirming the workers’ compensation commissioner’s 

decision on the amount of healing period benefits owed, the extent of 

permanent disability, and the penalty to be awarded. For the reasons 

stated below, we conclude that an employer’s matching contributions to 

an employee’s 401k plan are not weekly earnings for purposes of 

calculating workers’ compensation weekly benefits. We also conclude the 

district court did not err in affirming the decision of the commissioner 

with respect to the extent of permanent disability. However, we hold that 

the district court erred in affirming the date when healing period benefits 

commenced, the date when the healing period benefits ended, and the 

date when permanent partial disability (PPD) benefits commenced. We 

therefore affirm in part and reverse in part the judgment of the district 

court. We remand the case to the district court with the following 

instructions on judicial review: (1) to affirm the commissioner’s findings 

as to the weekly benefit rate and the extent of permanent partial

disability and (2) to remand the case to the commissioner for a 

redetermination of the date when healing period benefits commenced in 

September 2010, for a redetermination of the date when healing period 

benefits ended and PPD benefits commenced, and for a recalculation of 

penalty and interest benefits based on the above dates.

I. Background Facts and Proceedings.

David Evenson began working at Winnebago Industries, Inc. in 

1987 to supplement his income from farming. On May 18, 2010, while 
3

employed at Winnebago, Evenson sustained an injury to his left elbow. 

Evenson was an hourly employee at the time of his injury. On May 27, 

Evenson sought treatment for pain in his left elbow. He was seen by 

James McGuire, PA-C. Evenson reported that the pain in his left elbow 

started after he was stacking aluminum running boards as part of his 

job duties. Evenson was diagnosed with left elbow medial epicondylitis. 

He was provided a brace and advised to avoid lifting running boards until 

his next appointment. At his next appointment, Evenson reported the 

pain condition had improved and that he was still working his regular 

job. At his follow-up appointment on June 10, Evenson reported that his 

left elbow was sore because he had been doing extra work at Winnebago 

and working overtime. Although Evenson had full range of motion in his 

left arm, McGuire restricted him to working eight-hour days, five days 

per week.

Evenson was also treated by Dr. Carlson. Evenson received a 

cortisone injection in his left elbow on June 25, and he reported that it 

reduced his pain significantly. At his follow-up appointment with 

McGuire, Evenson was told he could continue with his work duties at 

eight hours per day. At the next appointment, Evenson reported more 

discomfort with heavy lifting and gripping, but also reported that he had 

been working ten-hour days. On August 17, Evenson reported he was 

experiencing more pain in his left elbow while working overtime. 

On September 3, Evenson received a second cortisone injection 

from Dr. Carlson. On the same day, he was also given work restrictions 

and told not to use his left arm for two weeks. Evenson claims that 

September 3 is the date when he stopped working, while Winnebago 

asserts that September 7 is the date that he stopped working. 

Dr. Carlson made notations on the Winnebago form following the 
4

cortisone injection on September 3 that stated: “OFF 1300 9-3-10 . . . 

can’t accommodate – will give vac. for remainder of day if he chooses or 

98 WI – wants Holiday pay so plans to use vac.” Winnebago’s records 

show that Evenson took one hour of vacation pay on September 3 and 

that there was a plant shut down on the same day for one-half hour. 

Evenson was also paid eight hours of holiday pay on September 6 for 

Labor Day. The records indicate no other vacation pay during the time 

period between September 3 and September 6.

On September 7, Evenson had a follow-up appointment with 

McGuire. McGuire noted some improvement in the left elbow and 

advised Evenson to avoid tight gripping and heavy lifting with his left 

arm. McGuire’s office notations from the appointment state that 

Evenson “was told that there is really no light duty in his work area. His 

supervisor wanted to know if there is some other alternative to this; 

otherwise, he will have to be off work.” The notation goes on to say that 

Evenson “should be off work for another ten days as long as they do not 

have any light duty for the patient.” (Emphasis added.)

Evenson was eventually referred to Dr. Gibbons, an orthopedic 

surgeon. On October 5, after his examination of Evenson, Dr. Gibbons 

gave Evenson work restrictions to only lift up to twenty pounds 

continuously; to push, pull, or lift with his left arm only occasionally; 

and to avoid repetitive tasks. At a follow-up appointment, Evenson 

reported that his symptoms were worsening. Dr. Gibbons restricted 

Evenson to lifting ten pounds continuously and twenty pounds 

occasionally, and directed him not to push/pull or handle/grip with his 

left arm. Dr. Gibbons lifted these restrictions on January 27, 2011, and 

Evenson was released to return to his regular duties. Dr. Gibbons 

reported that Evenson was at maximum medical improvement (MMI) at 
5

that time. He also noted that he had no impairment rating for Evenson 

because Evenson retained the full range of motion in his left elbow.

On September 14, 2011, Evenson filed a petition seeking workers’ 

compensation benefits related to the injury to his left elbow. Sentry 

Insurance Company was the workers’ compensation insurer for 

Winnebago.1

In February 2012, Evenson was again seen by McGuire. At this 

appointment, Evenson complained that he was still having elbow pain 

and reported numbness and tingling radiating down his arm into the left 

small and ring fingers. McGuire ordered nerve conduction studies on the 

left elbow and advised Evenson to limit left hand gripping. The studies 

showed ulnar neuropathy in Evenson’s left elbow and asymptomatic mild 

median neuropathy in Evenson’s left wrist.

Evenson was later treated by Dr. Yanish, another orthopedist. On 

March 4, Dr. Yanish diagnosed left medial epicondylitis and ulnar nerve 

impingement. An MRI showed some tendinopathy.

At the request of his attorney, Evenson obtained an independent 

medical examination and evaluation (IME) from Dr. Kuhnlein in March 

2012. The IME addressed not only the nature and extent of the injury to 

Evenson’s left elbow, but also addressed several other body parts and 

conditions that were separately relevant to his claim against the Second 

Injury Fund.2

1Evenson also filed a claim for benefits under the Second Injury Fund of Iowa. 

This claim was subsequently settled. Therefore, this opinion only addresses Evenson’s 

claims against Winnebago and Sentry.

2The Second Injury Fund claim involved bilateral foot injuries and left knee 

injuries. Dr. Kuhnlein was asked to give impairment ratings for the right foot, left foot, 

and left knee, in addition to Evenson’s left elbow.

 
6

Dr. Yanish performed surgery on Evenson’s left elbow on April 14, 

after which Evenson underwent physical therapy. Dr. Yanish kept 

Evenson off work until May 2, but noted that Evenson could not use his 

left arm upon return to work. On June 10, Evenson reported his pain 

had improved and he was not experiencing any further numbness or 

tingling. Dr. Yanish restricted Evenson to not lifting anything over ten 

pounds with his left arm. In early August, Dr. Yanish changed Evenson’s 

restrictions to not lifting more than twenty pounds with his left arm. 

Dr. Yanish also found an improved range of motion in Evenson’s left 

elbow. On August 31, Dr. Yanish changed Evenson’s restrictions to only 

occasionally lifting forty pounds, lifting up to twenty pounds repetitively, 

and only occasionally lifting up to twenty pounds above shoulder level. 

On October 7, Dr. Yanish released Evenson from treatment and 

restricted him to no lifting over twenty pounds and no lifting over his 

shoulder.

A contested hearing was held on July 6, 2012. Both Dr. Yanish 

and Dr. Kuhnlein offered opinions. Dr. Yanish allocated a four percent 

permanent impairment to Evenson’s left arm and recommended that 

Evenson restrict lifting, pushing, and pulling with that arm to twenty 

pounds. Dr. Kuhnlein rated Evenson’s permanent arm impairment at 

three percent and selected June 7, 2011, as the date when Evenson 

reached MMI.

Some of Evenson’s family members testified—over objection—about 

their observations of his use of his left arm after the injury. Evenson’s 

wife testified that he has difficulty with certain tasks and estimated that 

he lost sixty percent of the use of his left arm. Evenson’s father, his 

father-in-law, and his sister-in-law testified that he has lost some use of 
7

his left arm. They estimated, respectively, that Evenson lost sixty 

percent, eighty percent, or fifty-five percent of the function of his left arm. 

Evenson also testified regarding the effect of the loss of use of his 

left elbow to his home life and hobbies. Although he continues to farm, 

he has scaled back his activities significantly and relies on his family’s

help. Evenson testified that he is no longer able to steer his farming 

machinery with his left arm because it is painful and he has trouble 

gripping the wheel. He is no longer able to care for his horses. Evenson 

previously broke his horses to ride, but he is no longer able to do so

because he cannot properly grip a rope in his left hand. Evenson’s wife 

is now responsible for taking care of the horses. Evenson is no longer 

able to climb ladders on his farm. Due to his left elbow pain, Evenson 

stated that he is no longer able to ride his snowmobile or his fourwheeler. Evenson testified that the pain in his left elbow is usually at a 

constant five on a scale of one to ten.

On August 8, 2012, the deputy commissioner issued his 

arbitration decision. In the decision, the deputy commissioner awarded 

Evenson fifty weeks of PPD benefits at the rate of $506.42 per week;

healing period benefits between April 14, 2011, and June 14, 2011, at 

the rate of $506.42; and temporary partial disability (TPD) benefits for a 

number of time periods3 based on an average gross weekly rate of 

compensation of $763.52. The arbitration decision awarded Evenson 

only part of the cost of the IME performed by Dr. Kuhnlein because a 

substantial portion of the doctor’s evaluation focused on body parts and 

3Evenson was awarded TPD benefits at the weekly rate of $764.53 for the time 

periods of June 10, 2010, through June 25, 2010; July 13, 2010, through September 2, 

2010; October 5, 2010, through December 15, 2010; February 17, 2011, through April 

13, 2011; and June 14, 2011, through October 4, 2011.

 
8

conditions unrelated to the upper extremity injury claimed by Evenson in 

this case. The deputy commissioner also concluded the employer 

contributions to Evenson’s 401k plan were a fringe benefit and therefore 

not included in the calculation of average weekly gross earnings.4 In 

determining the extent of Evenson’s permanent disability, the deputy 

commissioner considered not only the impairment ratings determined by 

the medical testimony, but also the testimony of Evenson’s family 

members. The deputy commissioner concluded that Evenson suffered a 

twenty percent permanent loss of use in his left arm as a result of the 

injury in this case.

The deputy commissioner further concluded Evenson is entitled to 

healing period benefits. In particular, the deputy commissioner found 

Winnebago paid all healing period benefits owed up to the time of 

Evenson’s surgery in September 2011, but found additional healing 

periods owed for subsequent time off work were both delayed and 

insufficient in amount. The deputy concluded that Winnebago must pay 

a penalty because the “defendants failed to provide reasonable cause or 

excuse for the delay and denial of healing period and temporary partial 

disability benefits discussed above and certainly did not provide notice of 

the reason for such delays and denials.” 

The deputy stated,

A general award will be made again awaiting more specific 

calculations of the parties in a manner consistent with this 

decision. I do not find the use of the weekly rate of 

4The deputy found that Evenson’s weekly wage was $763.52, which resulted in a 

weekly compensation rate of $506.42. If Winnebago’s 401k matching contributions 

were included in the calculation, Evenson’s weekly wage would be $771.21, resulting in 

a weekly compensation rate of $510.43.

 
9

compensation of $468.62[5] unreasonable given the 

considerable fluctuations in claimant’s earnings each week. 

Also, the amount of the penalties shall be only 25 percent of 

the amounts delayed or denied as there was no showing of 

any prior violations of law by Winnebago or Sentry 

Insurance.

Evenson filed a rehearing application, which was denied. 

Winnebago and Sentry filed a notice of appeal to the Iowa Workers’ 

Compensation Commissioner on September 7, 2012, and Evenson filed a 

notice of cross-appeal. The commissioner issued an appeal decision on 

August 2, 2013, affirming the arbitration decision on all issues. Evenson 

sought judicial review. After a hearing, the district court entered an 

order on October 14, 2014, affirming the decision of the commissioner. 

Evenson appealed and we retained the appeal.

II. Standard of Review.

The first issue in this case asks us to engage in statutory 

interpretation to determine whether an employer’s contribution to an 

employee’s 401k plan is included in the calculation of weekly benefits. 

We review the commissioner’s interpretation of Iowa Code chapter 85 for 

errors at law. Iowa Code § 17A.19(10)(c) (2011); see Iowa Ins. Inst. v. 

Core Grp. of Iowa Ass’n for Justice, 867 N.W.2d 58, 65 (Iowa 2015). We 

have declined to give deference to the commissioner’s interpretation of 

various provisions included in chapter 85. Waldinger Corp. v. Mettler, 

817 N.W.2d 1, 7 (Iowa 2012) (holding that the commissioner was not 

vested with interpretive authority for section 85.34(1)); Neal v. Annett 

Holdings, Inc., 814 N.W.2d 512, 519 (Iowa 2012) (holding that the 

commissioner did not have the authority to interpret the phrase “suitable 

5On December 7, 2011, Winnebago and Sentry paid Evenson ten weeks of 

benefits using the four percent impairment rating given by Dr. Yanish. The rate paid 

was $468.62 per week plus interest in the amount of $179.58.

 
10

work” under section 85.33(3)); Burton v. Hilltop Care Ctr., 813 N.W.2d 

250, 261 (Iowa 2012) (explaining that we substitute our own 

interpretation of sections 85.36 and 85.61(3) if we find the interpretation 

of the commissioner was erroneous); Swiss Colony, Inc. v. Deutmeyer, 

789 N.W.2d 129, 133 (Iowa 2010) (explaining that we did not believe the 

legislature vested the commissioner with the authority to interpret 

section 85.34(5)).

This case also asks us to determine whether the district court

erred in upholding the commissioner’s findings regarding healing period 

benefits, the percentage of disability, and the amount of penalty to be 

awarded. When we review the commissioner’s findings of fact, we apply 

the following principles: 

The industrial commissioner’s findings have the effect of a 

jury verdict. We may reverse the commissioner’s findings of 

fact only if they are unsupported by substantial evidence in 

the record made before the agency when the record is viewed 

as a whole. Evidence is substantial if a reasonable mind 

would find it adequate to reach the same conclusion. An 

agency’s decision does not lack substantial evidence because 

inconsistent conclusions may be drawn from the same 

evidence.

Coffey v. Mid Seven Transp. Co., 831 N.W.2d 81, 89 (Iowa 2013) (quoting 

2800 Corp. v. Fernandez, 528 N.W.2d 124, 126 (Iowa 1995) (citations 

omitted)). Substantial evidence is “evidence that would be deemed 

sufficient by a neutral, detached, and reasonable person, to establish the 

fact at issue when the consequences resulting from the establishment of 

that fact are understood to be serious and of great importance.” Iowa 

Code § 17A.19(10)(f)(1).

III. Analysis.

A. Employer’s Contribution to Employee’s 401k Account. The 

parties disagree whether an employer’s matching contributions to an 
11

employee’s 401k plan should be included in a weekly rate calculation 

when determining workers’ compensation benefits. This is an issue of 

first impression for this court. Our determination rests upon the 

question of whether matching contributions to a 401k plan are 

considered “spendable weekly earnings” under Iowa Code section 

85.61(9).

Iowa Code section 85.37 provides that the weekly benefit amount 

paid to an employee is based on eighty percent of the employee’s “weekly 

spendable earnings.” Id. § 85.37. Compensation is based on “the weekly 

earnings of the injured employee at the time of the injury.” Id. § 85.36. 

“Weekly earnings” are defined as “gross salary, wages, or earnings of an 

employee to which such employee would have been entitled had the 

employee worked the customary hours for the full pay period in which 

the employee was injured.” Id.

“Spendable weekly earnings” are defined as the “amount remaining 

after payroll taxes are deducted from gross weekly earnings.” Id.

§ 85.61(9). “Gross earnings” are defined as

recurring payments by employer to the employee for 

employment, before any authorized or lawfully required 

deduction or withholding of funds by the employer, 

excluding irregular bonuses, retroactive pay, overtime, 

penalty pay, reimbursement of expenses, expense 

allowances, and the employer’s contribution for welfare 

benefits.

Id. § 85.61(3).

We must determine whether an employer’s matching contributions 

to an employee’s 401k plan are considered weekly earnings for purposes 

of Iowa’s workers’ compensation law. When we are asked to interpret a 

statute, we turn to well-settled rules of statutory interpretation:

The purpose of statutory interpretation is to determine the 

legislature’s intent. We give words their ordinary and 
12

common meaning by considering the context within which 

they are used, absent a statutory definition or an established 

meaning in the law. We also consider the legislative history 

of a statute, including prior enactments, when ascertaining 

legislative intent. When we interpret a statute, we assess the 

statute in its entirety, not just isolated words or phrases. 

We may not extend, enlarge, or otherwise change the 

meaning of a statute under the guise of construction.

Branstad v. State ex rel. Nat. Res. Comm’n, 871 N.W.2d 291, 295 (Iowa 

2015) (quoting Schaefer v. Putnam, 841 N.W.2d 68, 75 (Iowa 2013)). “We 

also consider the statute’s ‘subject matter, the object sought to be 

accomplished, the purpose to be served, underlying policies, remedies 

provided, and the consequences of the various interpretations.’ ” Id.

(quoting Cox v. State, 686 N.W.2d 209, 213 (Iowa 2004)).

We first look at the ordinary meaning of certain words contained in 

the workers’ compensation statutes. Section 85.36 defines “weekly 

earnings” as including “gross salary, wages, or earnings.” Iowa Code 

§ 85.36. “Salary” is defined as the “fixed compensation paid regularly (as 

by the year, quarter, month, or week) for services.” Salary, Webster’s 

Third New International Dictionary (unabr. ed. 2002). “Wage” is defined 

as

a pledge or payment of usu. monetary remuneration by an 

employer esp. for labor or services usu. according to contract 

and on an hourly, daily, or piecework basis and often 

including bonuses, commissions, and amounts paid by the 

employer for insurance, pension, hospitalization, and other 

benefits.

Wage, Webster’s Third New International Dictionary. “Earnings” are 

defined as “something (as wages or dividends) earned as compensation 

for labor or the use of capital.” Earnings, Webster’s Third New 

International Dictionary.

An employer’s contribution to a 401k plan is not dependent upon 

the hours an employee works in the normal way we think of the wage or 
13

salary an employee earns for working a certain number of hours or days. 

An employee’s 401k plan is related, at least tangentially, to his or her 

wage or salary, in that the amount the employee chooses to contribute 

may be based on how much they earn. However, an employer’s 401k 

plan matching contributions are based on an employee’s choice and 

participation. Ultimately, an employee chooses whether and how much 

to participate in a 401k plan. After the employee chooses, then the 

employer matches the contribution to the plan. The portion the 

employee chooses to contribute certainly comes from his or her normal 

salary or wage. The added contribution from any match by the employer, 

however, does not.

It is clear from the ordinary meaning of the words salary, wage, 

and earnings that an employer’s matching contribution to an employee’s 

401k plan is not meant to be included in weekly earnings for purposes of 

our workers’ compensation statute. When we read the dictionary 

definitions in conjunction with the exclusionary language contained in 

our statute, we conclude our legislature intended to exclude employer 

contributions to 401k plans from the definition of gross earning. See 

Iowa Code § 85.61(3) (specifically excluding “irregular bonuses, 

retroactive pay, overtime, penalty pay, reimbursement of expenses, 

expense allowances, and the employer’s contribution for welfare benefits”

from the regular definition of gross earnings).

Evenson contends an employer’s matching contributions to a 401k 

plan are not welfare benefits, and they therefore should not be excluded 

from gross earnings under section 85.61(3). We disagree. The ordinary 

meanings of the terms salary, wage, and earnings inform our 

interpretation of the term “welfare benefits” in this context. See id.

(defining gross earnings as “recurring payments by
14

employer to the employee for employment, before any authorized or 

lawfully required deduction or withholding of funds by the employer, 

excluding . . . welfare benefits”). A “benefit” is defined as “financial help 

in time of sickness, old age, or unemployment” and “a cash payment or 

service provided for under an annuity, pension plan, or insurance 

policy.” Benefit, Webster’s Third New International Dictionary. “Welfare”

is defined as “the state of faring or doing well . . . thriving or successful 

progress in life . . . a state characterized esp. by good fortune, happiness, 

well-being, or prosperity.” Welfare, Webster’s Third New International 

Dictionary. The term included in the statute is “welfare benefits,” and the 

two words should be considered together. Together, welfare benefits can 

mean something extra given to an employee for their well-being. We 

conclude a tax-deferred fund often utilized by employees as a substitute 

for, or in addition to, an established retirement plan clearly falls under 

the definition of welfare benefits.

The statute contemplates that there may be welfare benefits given 

to employees that are separate and distinct from their normal weekly 

earnings. See Iowa Code § 85.61(3). Matching contributions to an 

employee’s 401k plan fall under this category. As discussed above, we 

conclude that a 401k plan falls outside the normal definition of wage, 

salary, or earnings. An employer’s matching contributions to a 401k 

plan are something extra, in addition to an employee’s normal, earned 

wages. They provide assistance for employees in planning for retirement. 

An employer’s contribution to an employee’s retirement account is a 

benefit (something extra given by an employer) for the welfare of an 

employee (that employee’s well-being, specifically in regard to prosperity). 

Thus, under the ordinary meaning of the terms, we conclude an 
15

employer’s matching contribution to an employee’s 401k plan is a welfare 

benefit under the statute.

Further, Iowa Code section 85.61 defines “spendable weekly 

earnings” as “that amount remaining after payroll taxes are deducted 

from gross weekly earnings.” Iowa Code § 85.61(9). As a deferred 

compensation plan, an employer’s matching contribution to an 

employee’s 401k plan is not subject to payroll taxes in a manner that 

would fall under the statutory definition. An employee who receives a 

matching contribution to their 401k plan cannot immediately spend the 

contribution at the time it is paid, unlike a regular weekly wage.

The leading Supreme Court case on fringe benefits is MorrisonKnudsen Construction v. Director, Office of Workers’ Compensation 

Program, 461 U.S. 624, 103 S. Ct. 2045, 76 L. Ed. 2d 194 (1983). In this 

case, the Court held that an employer’s contributions to a union trust 

fund for health and welfare, pensions, and employee training were not 

considered wages for the purposes of calculating weekly benefits under 

the District of Columbia’s Workers’ Compensation Act. Id. at 637, 103 

S. Ct. at 2052–53, 76 L. Ed. 2d at 204. In so deciding, the Supreme 

Court relied on the fact that the health and welfare, pension, and 

training funds could not be readily converted to a cash equivalent in the 

same way as regular wages or the reasonable value of lodging. Id. at 

630, 103 S. Ct. at 2048–49, 76 L. Ed. 2d at 199. The Court also noted 

that the legislative history indicated that Congress did not intend to 

include these types of fringe benefits when calculating the rate of 

compensation benefits. Id. at 632, 103 S. Ct. at 2050, 76 L. Ed. 2d at 

201.

The majority trend is to treat an employer’s matching contribution 

to a 401k plan as a welfare benefit that falls under the category of “fringe 

benefits,” and thus is not included in the calculation of weekly benefits 
16

for workers’ compensation purposes. 8 Arthur Larson et. al., Larson’s 

Workers’ Compensation Law § 93.01[2][b], at 93-20 (rev. ed. 2015); cf.

City of Lamar v. Koehn, 968 P.2d 164, 167 (Colo. App. 1998) (excluding 

an employer’s contribution to an employee’s pension plan from the 

calculation of weekly benefits); Luce v. United Techs. Corp., 717 A.2d 747, 

755 (Conn. 1998) (finding that the calculation of “wages” under the 

state’s workers’ compensation laws does not include pensions); Rainey v. 

Mills, 733 S.W.2d 756, 758 (Ky. Ct. App. 1987) (declining to find 

statutory support to include fringe benefits, such as employer pension 

plan contributions, in weekly wage calculation); Barnett v. Sara Lee 

Corp., 627 A.2d 86, 90–91 (Md. Ct. Spec. App. 1993) (finding that 

pension plans could not be considered in the calculation of weekly wages 

for the purpose of determining a claimant’s industrial loss of use); In re 

Gagnon, 965 A.2d 1154, 1159 (N.H. 2009) (holding that weekly wages are 

calculated using a claimant’s pre-tax pay and, therefore, it was not 

unjust for the collective bargaining agreement to exclude employer 

payments to an employee’s pension plan from the definition of wage); 

Shaw v. U.S. Airways, Inc., 665 S.E.2d 449, 453 (N.C. 2008) (holding that 

an employer’s contributions to an employee’s retirement account are not 

included in the calculation of a weekly wage for workers’ compensation 

purposes); Clopton v. City of Muskogee, 147 P.3d 282, 284–85 (Okla. Civ. 

App. 2006) (relying on Morrison-Knudsen in determining that pension 

plans are not included in the definition of wage for workers’ 

compensation purposes); Nelson v. SAIF Corp., 714 P.2d 631, 631–32 (Or.

Ct. App. 1986) (finding that pensions are not included in the definition of 

wages included in Oregon’s workers’ compensation laws).

We acknowledge that a few states have changed their workers’ 

compensation statutes to include retirement plans in the definition of 

fringe benefits. See, e.g., Neb. Rev. Stat. Ann. § 48-1229 (West, Westlaw 
17

current through 2016 2d Reg. Sess.). Our legislature has not taken such 

action, and we agree with the majority trend evidenced by the cases cited 

above. An employer’s matching contributions to an employee’s 401k 

plan fit much more squarely into the fringe-benefits category than that of 

a regular salary or wage. As discussed earlier, those contributions are 

not directly linked to an employee’s salary, nor are they immediately 

available for the employee to spend in the same way as regular wages. 

We conclude the commissioner and the district court were correct in 

declining to expand the definition of weekly spendable earnings to 

include employer 401k contributions.

B. District Court Judgment. Evenson also claims that the 

district court erred by affirming the commissioner’s decision regarding 

the extent of his scheduled member disability, the commencement dates 

of healing period benefits, and the amount of penalty awarded. We 

address each argument in turn to determine whether the commissioner’s 

findings of fact were supported by substantial evidence. See, e.g., Coffey, 

831 N.W.2d at 89.

1. Extent of disability. An injury to the elbow is a scheduled injury 

(to the arm) with a maximum benefit period of 250 weeks. Iowa Code 

§ 85.34(2)(m). The compensation for a scheduled injury is based on the 

impairment of bodily function. Westling v. Hormel Foods Corp., 810 

N.W.2d 247, 252 (Iowa 2012). “[I]t is a fundamental requirement that 

the commissioner consider all evidence, both medical and nonmedical. 

Lay witness testimony is both relevant and material upon the cause and 

extent of injury.” Gits Mfg. Co. v. Frank, 855 N.W.2d 195, 199 (Iowa 

2014) (quoting Miller v. Lauridsen Foods, Inc., 525 N.W.2d 417, 421 (Iowa 

1994)).
18

In this case, the deputy considered opinions offered by Dr. Yanish, 

who rated Evenson’s functional impairment at four percent, and Dr. 

Kuhnlein, who rated Evenson’s functional impairment at three percent. 

The deputy also heard testimony from various family members about the 

injury suffered by Evenson. Based on all of the testimony, the agency 

found Evenson suffered a twenty percent permanent loss of the use of 

his left arm. In making this determination, the agency considered all of 

the expert medical opinions as well as the testimony of Evenson’s family 

members. The district court found substantial evidence supporting the 

agency’s determination on the extent of Evenson’s disability. On appeal, 

Evenson contends the commissioner’s disability finding is not supported 

by substantial evidence and contends he suffered a twenty-one to fifty 

percent disability in his left arm.

In this case, the deputy heard and considered medical opinions, 

opinions of family members, and the testimony of Evenson himself. In 

our review of the record, we find substantial evidence supporting the 

agency’s finding on disability and therefore affirm the district court’s 

ruling on judicial review.

2. Healing period benefits. Evenson alleges that the commissioner 

incorrectly determined the commencement dates for healing period and 

PPD benefits. The commissioner determined that Evenson had two 

different compensable healing periods. The first was from September 7, 

2010, to September 19, 2010. The second was from April 14, 2011, to 

June 14, 2011. The arbitration decision awarded Evenson PPD benefits 

beginning on November 30, 2011. This was based on Dr. Yanish’s 

impairment rating that placed Evenson at MMI on November 29, 2011. 

Both the commissioner and the district court affirmed that 

commencement date for PPD benefits.
19

Evenson contends his first healing period began on September 3, 

rather than September 7. He argues that he first received physical 

restrictions on September 3 and Winnebago was unable to accommodate 

his restrictions at that time. Therefore, he was required to be off work 

beginning on September 3. Dr. Carlson’s progress note reported that 

Evenson planned to take vacation pay because Winnebago was unable to 

accommodate his restrictions. McGuire’s progress note for September 7 

stated that Evenson should be off work for another ten days, suggesting 

that Evenson had already been off work before that appointment. 

Further, Winnebago’s records show that Evenson took one hour of 

vacation pay on September 3 and that there was a one-half hour plant 

shut down on the same day. Evenson was also paid eight hours of 

holiday pay on September 6 for Labor Day. We agree with Evenson that 

substantial evidence does not support the commissioner’s finding that 

the first healing period began on September 7.

Generally, an employer may seek a credit for the good faith 

overpayment of workers’ compensation benefits. Iowa Code § 85.34(4)–

(5); see also 15 James R. Lawyer, Iowa Practice: Workers’ Compensation

§ 13:10, at 175 (2015) [hereinafter Iowa Practice]. Additionally, the 

commissioner allows credits for sick pay and vacation pay in some 

situations. Iowa Practice, at 175–76; see also King v. Marion Indep. 

Cmty. Sch. Dist., Iowa Workers’ Comp. Comm’n, 2013 WL 3185066, at 

*2–3 (June 10, 2013). If an employee elects to use sick pay or vacation 

pay during a time in which workers’ compensation benefits are not being 

paid, an employer is not entitled to a credit for the pay unless the 

employee later elects to have the vacation or sick pay restored. Iowa 

Practice, at 176.
20

Conversely, the commissioner has generally allowed an employer a 

credit against healing benefits in the amount of holiday pay paid to an 

employee during a healing period. See, e.g., King, 2013 WL 3185066, at 

*2. The rationale for treating vacation and sick pay differently than 

holiday pay is that sick pay and vacation pay are paid leave that an 

employee accrues over time for previous work that the employee 

performed. See id. The employee who uses vacation or sick pay as 

compensation during a healing period loses the future ability to utilize 

such benefits for their intended purpose. If an employer is granted a 

credit for paying an employee for sick or vacation pay that the employee 

elected to take during a time when the employer should have been 

paying workers’ compensation benefits, then the cost is shifted to the 

employee rather than the employer. See id. In contrast, there is not a 

cost to the employee when they take holiday pay. See id. Holiday pay is 

not something an employee accrues and can use in the future; it is a 

benefit that is given independent of the employee’s hours worked or 

choice to take a paid day off. See id. We agree with the approach the 

commissioner has taken on this issue. If, on remand, the commissioner 

determines the first healing period began on September 3, then the 

holiday pay Evenson was paid for September 6 may be credited against 

Winnebago’s obligation to pay additional healing period.

Evenson also argues that the commissioner should have awarded 

PPD benefits beginning on September 20, the day he returned to work 

after the first healing period, and then suspended those benefits during 

his second healing period between April 14, 2011, to June 14, 2011, and 

recommenced PPD benefits on June 15, 2011.

Iowa Code section 85.34 provides the standard for determining 

when healing period benefits terminate. Iowa Code § 85.34(1). We have 
21

recognized that the statute presents a menu of options the fact finder 

shall consider when deciding that the healing period has ended. See, 

e.g., Waldinger Corp., 817 N.W.2d at 8–9. Section 85.34 provides that 

the healing period lasts

until the employee has returned to work or it is medically 

indicated that significant improvement from the injury is not 

anticipated or until the employee is medically capable of 

returning to employment substantially similar to the 

employment in which the employee was engaged at the time 

of injury, whichever occurs first.

Iowa Code § 85.34(1) (emphasis added). We have previously recognized 

that there may be more than one healing period for a single injury. 

Waldinger Corp., 817 N.W.2d at 8.

“Compensation for permanent partial disability shall begin at the 

termination of the healing period . . . .” Iowa Code § 85.34(2). When 

there are multiple healing periods, we must determine whether PPD 

begins to run from the end of the first healing period or whether the fact 

finder may choose among the multiple healing periods that are supported 

by substantial evidence, as occurred here. We hold that the statute 

clearly states the healing period lasts until whichever situation occurs 

first. Id. § 85.34(1); see also Teel v. McCord, 394 N.W.2d 405, 407 (Iowa 

1986). In this case, the first of the three alternative events to occur was 

Evenson’s return to work in September 2010.

The commissioner found Evenson returned to work on September 

20, 2010, after several days off. This ended the first healing period as a 

matter of law because it was the earliest of the section 85.34(1) 

alternatives and because PPD “shall begin at the termination of the 

healing period provided in subsection 1 [of section 85.34].” Iowa Code 

§ 85.34(1)–(2). Because we conclude the first healing period ended on 

September 20, there is not substantial evidence in the record to support 
22

the commissioner’s finding the healing period benefits terminated in 

November 2011. See Teel, 394 N.W.2d at 406–07 (concluding a 

claimant’s entitlement to PPD benefits commenced when the claimant 

first returned to work after his 1974 injury—not after subsequent 

intermittent healing period or after he finally “returned to work for good” 

in 1981 after a series of surgeries). The date of Evenson’s first return to 

work established the end of the healing period and the commencement of 

PPD benefits because it was the earliest of the three triggering events 

prescribed in section 85.34(1). Iowa Code § 85.34(1).

Our determination that Evenson’s return to work in September 

2010 established the commencement date for PPD benefits is not 

precluded by the fact that he was entitled to TPD benefits for subsequent 

weeks when he was medically restricted from working his regular hours. 

In Presthus v. Barco, Inc., the claimant received healing period benefits 

after a work-related injury. 531 N.W.2d 476, 480 (Iowa Ct. App. 1995). 

He returned to work, but for approximately three weeks was unable to 

work regular full-time hours and received TPD benefits. See id. 

Presthus contended his entitlement to PPD benefits commenced upon his 

return to work, which was the same time he would begin receiving TPD 

benefits. Id.6 The commissioner held PPD benefits commenced at a later 

date—after the short period of temporary partial disability. Id. The 

district court and court of appeals concluded on judicial review that the 

commissioner correctly delayed the commencement of PPD benefits until 

the termination of the period of temporary partial disability. Id. at 480–

81.

6Iowa Code section 85.34(2) (1993) provided that “[c]ompensation for permanent 

partial disability shall begin at the termination of the healing period provided in [section 

85.34(1)].”

 
23

The court of appeals concluded Presthus could not “receive 

temporary partial and permanent partial benefits for the same injury at 

the same time” because it believed he could not be “both temporarily and 

permanently disabled at the same time.” Id. at 480. This language from 

the Presthus opinion was imprecise and requires clarification. In the 

world of workers’ compensation, the words “temporary” and “permanent” 

have different meanings in different contexts. In a medical sense, the 

court of appeals could have reasoned that Presthus’s injury was not both 

temporary and permanent in nature at the same time. Yet, the terms 

“temporary” and “permanent” have different meanings and significance 

when used in describing the several categories of workers’ compensation 

benefits employees receive for work-related injuries. 

Some categories of compensation authorized under Iowa Code 

chapter 85 are for the purpose of compensating injured employees 

during weeks when they experience a temporary total or partial loss of 

actual earnings (reduced or eliminated paychecks) caused by the injury. 

See Iowa Code § 85.33(1) (providing for temporary total disability (TTD)

benefits for time lost from work for an injury that does not result in a 

permanent disability); id. § 85.33(2) (providing for TPD benefits during 

periods when the employee cannot return to work substantially similar to 

the job performed at the time of the injury, but is able to perform other 

work consistent with the injury); id. § 85.34(1) (providing for healing 

period benefits for time lost from work for an injury that results in 

permanent partial disability). Other categories of workers’ compensation 

benefits serve distinctly different purposes and are owed when an 

employee sustains an injury that causes a permanent partial loss of 

either bodily function (scheduled member injuries compensated under 

section 85.34(2)(a)–(t)), or earning capacity (body-as-a-whole injuries 
24

compensated under section 85.34(2)(u)), or when the employee sustains a 

permanent total loss of earning capacity under section 85.34(3). Id.

§ 85.34. So, unlike in the medical world in which an injury is ultimately 

either temporary or permanent, in the workers’ compensation world, a 

single injury can result in an employer’s liability for both temporary and 

permanent disability benefits.

As we have noted, the various categories of workers’ compensation 

benefits have distinct purposes. Thus, because TPD and PPD benefits 

compensate for completely different categories of losses, an employee 

who receives TPD and PPD benefits following a single workplace injury is 

not paid twice for the same injury or loss. Perhaps in an effort to avoid 

even the misapprehension that Presthus might be paid more than he was 

entitled if he simultaneously was owed TPD and PPD benefits for a single 

work-related injury, the commissioner in Presthus chose to commence 

the claimant’s entitlement to PPD benefits after a brief period of TPD 

benefits concluded. Presthus, 531 N.W.2d at 478. The court of appeals 

affirmed that part of the agency’s decision on appeal, concluding 

Presthus could not receive temporary and permanent disability payments 

at the same time for the same injury. Id. at 480. We now conclude 

Presthus was wrongly decided.

In this case, Evenson’s entitlement to PPD benefits commenced 

when he first returned to work because that is when his entitlement to 

healing period benefits ended. See Iowa Code § 85.34(1)–(2) (providing 

healing period benefits are owed “until the employee has returned to 

work or it is medically indicated that significant improvement from the 

injury is not anticipated or until the employee is medically capable of 

returning to employment substantially similar to the employment in 

which the employee was engaged at the time of injury, whichever occurs 
25

first,” and stating “[c]ompensation for permanent partial disability shall 

begin at the termination of the healing period” (emphasis added)). 

Because TPD benefits were paid to Evenson after he first returned to 

work following the injury, we conclude the commencement of 

Winnebago’s obligation to pay PPD benefits cannot be delayed until after 

the TPD benefits subsequently terminated under the plain meaning of 

section 85.34.

Our conclusion that Evenson’s entitlement to PPD benefits was not 

suspended beyond the end of the first healing period until after his 

period of temporary partial disability ended poses no risk of duplication 

or overpayment of benefits under the circumstances presented here. As 

we have noted, TPD payments are calculated to replace part of Evenson’s 

loss of actual earnings after he returned to work during a period of 

partial disability. The PPD payments, by contrast, are intended to 

compensate him for a different loss: a permanent partial loss of his left 

arm. Thus, although we conclude today that PPD payments can be owed 

for periods during which a claimant was paid temporary partial 

disability, no duplication of benefits arises. Our conclusion on this point 

is also based in part on the fact that the principal purpose of the 

statutory scheme establishing a date (the termination of the healing 

period) for the commencement of PPD benefits is the calculation of 

interest owed on such benefits for the duration of any delay of payment. 

See, e.g., Teel, 394 N.W.2d at 407 (explaining that interest on PPD 

benefits was owed from Teel’s first return to work on May 7, 1974—even 

though he experienced subsequent intermittent healing periods and the 

extent of his disability was not known until 1980—because “the employer 

in effect [was] holding [Teel’s] money, and presumably earning interest on 

it”).
26

We remand for a determination of whether the first healing period 

began on September 3 or September 7. On remand, the commissioner 

shall also make a new determination of the date PPD benefits 

commenced consistent with this opinion.

3. Amount of penalty. Iowa Code section 86.13(4) provides that, if 

a delay in payment occurs without reasonable or probable cause or 

excuse known to the employer, the commissioner shall award a penalty 

in an amount up to fifty percent of the amount of benefits denied, 

delayed, or terminated without such reasonable or probable cause or 

excuse. Iowa Code § 86.13(4)(a). The arbitration award determined that 

a twenty-five percent penalty was appropriate in this case, stating that

defendants failed to provide reasonable cause or excuse for 

the delay and denial of healing period and temporary partial 

disability benefits discussed above and certainly did not 

provide notice of the reason for such delays and denials. A 

general award will be made again awaiting more specific 

calculations of the parties in a manner consistent with this 

decision. I do not find the use of the weekly rate of 

compensation of $468.62[7] unreasonable given the 

considerable fluctuations in claimant’s earnings each week. 

Also, the amount of the penalties shall be only 25 percent of 

the amounts delayed or denied as there was no showing of 

any prior violations of law by Winnebago or Sentry 

Insurance.

The commissioner’s appeal decision adopted the penalty determination, 

concluding as follows: 

The arguments of the parties have been considered 

and the record of evidence has been reviewed de novo.

Pursuant to Iowa Code sections 86.24 and 17A.15, I 

affirm and adopt as the final agency decision those portions 

of the proposed arbitration decision filed on August 21, 2012 

that relate to issues properly raised on intra-agency appeal. 

7On December 7, 2011, Winnebago and Sentry paid Evenson ten weeks of 

benefits based on the four percent impairment rating given by Dr. Yanish. The rate 

paid was $468.62 per week plus interest in the amount of $179.58.

 
27

The calculations of claimant as to healing period benefits, 

temporary partial disability benefits, princip[al]/interest 

owed, and penalties assessed are adopted as if fully set forth 

herein.

The district court considered the penalty imposed by the commissioner. 

It considered that Winnebago and Sentry had failed to include interest on 

some benefits and had failed to show reasonable or probable cause for a 

delay in paying some benefits. It also considered that the deputy found 

the weekly rate paid by Winnebago and Sentry prior to the arbitration 

decision was not unreasonable based on the impairment rating provided 

by Dr. Yanish. It noted that Winnebago did not have a history of delayed 

payments. The district court noted that the penalty amount imposed 

was half that allowed by the pertinent Code section. The court 

concluded that this was not a case of extreme denial or delay and held 

there was substantial evidence in the record to support the twenty-five 

percent penalty award. We agree with the decision of the district court 

that twenty-five percent of the delayed and underpaid benefits is the 

proper penalty amount. However, because we remand for a recalculation 

of the healing period and PPD benefits owed, we also remand for a 

recalculation of the amount of the penalty and interest owed based on 

the new healing period and PPD dates.

IV. Conclusion.

We hold that an employer’s matching contributions to an 

employee’s 401k plan are not spendable weekly earnings for purposes of 

calculating weekly workers’ compensation benefits, and we therefore 

affirm the commissioner’s determination of Evenson’s weekly 

compensation rate. We also hold substantial evidence in the record 

supports the commissioner’s determination of the extent of Evenson’s 

work-related disability. We reverse the commissioner’s determination of 
28

the commencement date for healing period benefits in September 2010 

and his related determination of the commencement date for PPD

benefits. We remand this case to the district court with the following 

instructions: (1) to affirm the commissioner’s findings as to the weekly 

benefit rate and the extent of permanent partial disability and (2) to 

remand the case to the commissioner for a redetermination of the date 

when healing period benefits commenced in September 2010, for a

redetermination of the date when healing period benefits ended and PPD 

benefits commenced, and for a recalculation of penalty and interest 

benefits based on the above dates.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

All justices concur except Mansfield and Waterman, JJ., who 

concur in part and dissent in part.
29

#14–2097, Evenson v. Winnebago

MANSFIELD, Justice (concurring in part and dissenting in part).

I join most of the court’s well-reasoned opinion, but differ as to 

when permanent partial disability benefits should begin.

I would affirm the commissioner’s determination that David 

Evenson “achieved maximum medical improvement [MMI] on November 

29, 2011” and that permanent partial disability benefits should 

commence on November 30 of that year. In declining to uphold this 

determination, my colleagues overturn existing law which had prohibited 

claimants from receiving temporary partial disability benefits and 

permanent partial disability benefits for the same injury over the same 

time period. See 15 James R. Lawyer, Iowa Practice Series: Workers’ 

Compensation § 13:2, at 141 (2015).

My colleagues do not dispute that substantial evidence supports 

the factual finding of a November 29, 2011 MMI. Instead, they reverse 

on a legal ground—essentially by dramatically expanding the prior 

holding of Waldinger Corp. v. Mettler, 817 N.W.2d 1 (Iowa 2012). Prior to 

Waldinger, the law had been that MMI strictly demarcated the line 

between (1) the termination of temporary partial disability or healing 

period benefits and (2) the commencement of permanent partial disability 

benefits. See Ellingson v. Fleetguard, Inc., 599 N.W.2d 440, 447 (Iowa 

1999), overruled by Waldinger, 817 N.W.2d at 8.

In Waldinger, we carved out an exception for the situation when 

the employee needs another surgery for his or her work-related injury 

after attaining MMI. See 817 N.W.2d at 8. There the claimant had 

attained MMI for an ankle injury in 2005, but missed three months of 

work in 2007 due to arthroscopic surgery for the same work-related 

injury. Id. at 3–4. The court of appeals held that the claimant was not 
30

entitled to healing period benefits for the time he missed work in 2007 

because he had already achieved MMI in 2005. Id. at 4. This court 

disagreed, concluding that “the phrase ‘a healing period’ was not 

intended by the legislature to limit healing period benefits to a single 

period of temporary disability per injury.” Id. at 8. Thus, we overruled 

Ellingson in part, holding:

We now conclude our interpretation in Ellingson of section 

85.34(1) as a categorical prohibition of an award of healing 

period benefits for disability from work occurring after the 

date MMI has been achieved was erroneous, and we 

therefore overrule it.

Id. We continued,

When, after achieving MMI, a claimant is rendered 

temporarily disabled from work, as Mettler was, as a 

consequence of surgical treatment provided under section 

85.27 for a work-related injury, a new healing period begins 

under section 85.34(1).

Id. We added, “We see no principled reason why Mettler, or any similarly 

situated claimant, should be disqualified from a healing period remedy 

when ordinary and necessary medical care for a work-related injury 

temporarily removes them again from the work force.” Id. at 8–9.

Today’s decision is an illogical and ill-considered expansion of 

Waldinger. Contrast the Waldinger facts with the situation here. In the 

present case, Evenson suffered a work-related left elbow injury in May 

2010. He was off work in September 2010 and again from April to June 

2011. He achieved MMI in November 2011. The commissioner awarded 

Evenson the following:

(1) healing period benefits for the two time spans he 

was off work in September 2010 and April-June 2011,8

8As noted by the majority, clarification is needed regarding September 3–7, 

2010.

 
31

(2) temporary partial disability benefits compensating 

for various time periods between June 2010 and October 

2011 prior to the attainment of MMI when Evenson was 

working at his prior job but could not earn overtime 

compensation because of his condition, and

(3) permanent partial disability benefits as of the 

attainment of MMI in November 2011.

Thus, unlike Waldinger, this is not a case where the claimant 

achieved MMI, became eligible for PPD benefits, but then had a 

subsequent episode where he missed time from work because of medical 

treatment for the same work-related injury. Rather, the claimant—prior 

to attaining MMI—had a combination of time off work and reduced hours 

for which he already has been given compensation through a 

combination of healing period benefits and temporary partial disability 

benefits. I see no unfairness in the outcome approved by the 

commissioner. Yet the court now holds that Evenson is also entitled to 

PPD benefits dating back to when he returned to work on September 20, 

2010.

There are several problems with what the court has done. To begin 

with, it is inconsistent with the statutes. Iowa Code section 85.34(1) 

(2011) regarding “healing period” provides that the healing period begins 

on the first day of disability following the injury and continues 

until the employee has returned to work or it is medically 

indicated that significant improvement from the injury is not 

anticipated or until the employee is medically capable of 

returning to employment substantially similar to the 

employment in which the employee was engaged at the time 

of injury. 

Section 85.34(2) provides, “Compensation for permanent partial 

disability shall begin at the termination of the healing period provided in 

subsection 1.” Id. § 85.34(2). Section 85.33(2) provides that temporary 

partial disability benefits are “payable, in lieu of temporary total 
32

disability and healing period benefits, to an employee because of the 

employee’s temporary partial reduction in earning ability as a result of 

the employee’s temporary partial disability.” Id. § 85.33(2).

Putting these statutes together, they indicate that when an 

employee is receiving temporary partial disability benefits because he or 

she is working fewer hours due to a workplace injury, this time period is 

regarded as part of “the healing period” for section 85.34 purposes, and 

only at the conclusion of this overall healing period would permanent 

partial disability benefits commence. That is why the temporary partial 

benefits are “in lieu of” healing period benefits. See id. In fact, the words 

“in lieu of” in the statute make no sense otherwise. In short, when an 

employee like Evenson suffers a workplace injury and thereafter has a 

combination of time off work and reduced hours until he achieves MMI, 

that entire pre-MMI time period is treated as “the healing period” for 

purposes of determining when PPD benefits commence.

The majority’s reading of the statutes also means an employee can 

have a “temporary” disability and a “permanent” disability based on the 

same injury at the same time. This seems to be a very incongruous 

reading of the statutes and one that should be avoided. Additionally, the 

majority fails to explain why the legislature expressly provided that an 

employee could receive medical and death benefits “in addition to” PPD 

benefits, see id. § 85.34(2) (“The compensation shall be in addition to the 

benefits provided by sections 85.27 and 85.28.”), but did not say an 

employee could receive temporary disability payments in addition to PPD 

benefits. Surely, if the legislature wanted to indicate that an employee 

could receive temporary partial disability benefits and PPD benefits 

covering the same time period, it would have expressly said so, given that 

it made express reference to the availability of benefits under sections 
33

85.27 and 85.28—situations where the case for awarding additional 

benefits is far clearer.

As I’ve already suggested, the majority’s approach leads to a 

questionable policy outcome—namely, the duplication of benefits. 

Evenson has already been awarded temporary partial disability benefits 

for the time period before November 2011 to compensate for any “partial 

reduction of earning ability” during that time. See Iowa Code § 85.33(2). 

Now the court wants the commissioner to go back and further 

compensate him for any loss of earning capacity during the same period. 

Until now, our law had been clear:

In this particular case, Presthus was receiving both 

temporary partial and permanent partial benefits for the 

same injury. It follows that, in order to receive both benefits 

at the same time as Presthus suggests, Presthus’ injury 

would have to cause him to be both temporarily and 

permanently disabled at the same time. We are not 

persuaded that such a result is attainable. We conclude 

Presthus cannot receive temporary partial and permanent

partial benefits for the same injury at the same time.

Presthus v. Barco, Inc., 531 N.W.2d 476, 480 (Iowa Ct. App. 1995). In 

Presthus, no PPD benefits commenced until “after all of the temporary 

partial benefits had been paid”—exactly the rule that I contend should be 

followed here. Id.

Presthus is not the only decision that the court overrules today. 

The court also discards the analytical framework we set forth in 

considerable detail in one of our own opinions just six years ago. In 

2010, in Bell Brothers Heating & Air Conditioning v. Gwinn, we explained 

the interplay between temporary and permanent disability awards. 779 

N.W.2d 193, 200–01 (Iowa 2010). We said,

Although early workers’ compensation law made no 

distinction between temporary and permanent disability, our 

workers’ compensation law now provides for separate awards 
34

based on the temporary and permanent nature of a 

disability. The difference between awards for temporary and 

permanent disability can be best illustrated by considering a 

typical industrial injury.

Normally, an industrial injury gives rise to a period of 

healing accompanied by loss of wages. During this period of 

time, temporary benefits are payable to the injured worker. 

Generally, these benefits attempt to replace lost wages (and 

provide medical and hospitalization care) consistent with the 

broad purpose of workers’ compensation: to award 

compensation (apart from medical benefits), not for the 

injury itself, but the disability produced by a physical injury. 

In Iowa, these benefits are spelled out in Iowa Code sections 

85.33, 85.34, and 85.37. . . .

. . . Any disability that remains after stabilization of 

the condition gives rise to “either a permanent partial or a 

permanent total award.” In other words, maximum physical 

recovery marks the end of the temporary disability benefits, 

and at that point, any permanent disability benefits can be 

considered.

This review of temporary and permanent disability 

awards reveals that a fundamental component of a 

permanent impairment is stabilization of the condition or at 

least a finding that the condition is “not likely to remit in the 

future despite medical treatment.” In other words, 

stabilization is the event that allows a physician to make the 

determination that a particular medical condition is 

permanent.

The symmetry of the process reveals that a claim for 

permanent disability benefits is not ripe until maximum 

medical improvement has been achieved. Until that time, 

only temporary benefits are available.

Id. (citations omitted) (first quoting 4 Arthur Larson & Lex K. Larson, 

Larson’s Workers’ Compensation Law § 80.03[2], at 80-6 (2009); and then 

quoting American Medical Association, Guides to Evaluation of Permanent 

Impairment 27 (6th ed. 2008)). Bell Brothers clearly forecloses the 

interweaving and intermixing of temporary and permanent benefits 
35

approved by today’s opinion. Regrettably, the court today fails even to 

discuss Bell Brothers.9

Instead of Bell Brothers, the court cites to a thirty-year-old 

decision—Teel v. McCord, 394 N.W.2d 405 (Iowa 1986). Several 

important points about Teel should be noted. First, the facts of Teel are 

different from those before us today in that there were no temporary 

partial disability benefits. Id. at 406. There were simply a series of 

healing periods when the employee was off work. Id. Furthermore, in 

Teel the PPD interest payments were suspended during each of those 

healing periods, the upshot being that PPD benefits were not due during 

those periods. Id. Today, by contrast, the court decides that PPD should 

be paid continuously once the first healing period ends. In this respect, 

today’s decision is inconsistent with Teel. Third, the only argument the 

employer raised in Teel was the legally insufficient one that interest on 

PPD benefits should commence as of the date of the award. Id. Thus, 

none of the issues involved in this case were squarely presented. Lastly, 

the language from Teel on which the majority relies today is simply 

irreconcilable with Bell Brothers. 

In the end, today’s opinion rests on a nonsequitur. The court 

concedes that its approach results in multiple healing periods prior to 

MMI, not just one healing period, even though the statute refers to “the” 

healing period. See Iowa Code § 85.34(2). This means the court must 

determine which healing period should be selected for the 

9Bell Brothers highlights the practical problems with today’s decision. The court 

holds today that PPD benefits should have commenced when Evenson first resumed 

working in September 2010. But how was anyone to know then that Evenson had 

suffered a permanent disability? That is why the law allows temporary partial disability 

benefits to compensate for a reduction in income until it is determined that MMI has 

been attained.

 
36

commencement of PPD benefits. The court then states the end of the 

first healing period must be chosen because each healing period ends as 

soon as the employee returns to work. Why? The former conclusion 

does not follow from the latter. To put it simply, the court has confused 

two issues: (1) when each healing period ends and (2) which healing 

period must be chosen for commencement of PPD benefits.

The worker’s compensation statutes, Presthus, Bell Brothers, 

fairness, and logic all point in one direction: When an employee suffers 

an industrial injury resulting in a combination of time off work and 

reduced hours, and then attains MMI, the employee should receive 

temporary partial disability and healing period benefits for the pre-MMI 

timeframe, and PPD benefits commencing thereafter.

The court’s opinion is not clear, but to the extent the court is 

indicating that penalty benefits could be awarded on any of the PPD 

benefits, I also disagree with that conclusion. Having modified the law as 

to when PPD benefits commence, it would be unfair for the court to 

subject the employer to a penalty for its lack of clairvoyance regarding 

the court’s own modification of the law. See Iowa Code § 86.13(4) 

(authorizing a penalty when there was a denial or a delay of payment 

“without reasonable or probable cause or excuse”). The commissioner 

did not award any penalty on the PPD benefits, but the court today 

upholds a penalty on “the delayed and underpaid benefits” and remands 

for “a recalculation of the amount of the penalty and interest owed based 

on the new healing period and PPD dates.”

While I join the rest of the court’s opinion, I fear that the foregoing 

aspects of today’s decision misread the statutes, unnecessarily overturn 

precedent, will produce confusion and double recoveries, and will 

ultimately require a legislative fix.

Waterman, J., joins this concurrence in part and dissent in part.