Opinion ID: 1861326
Heading Depth: 2
Heading Rank: 7

Heading: apportionment of recovery expenses for future compensation credit

Text: Along with the actual recovery which benefits the employee, an interest which benefits the insurer is discernible at the time of settlement or judgment. That contingent future interest [18] is the dollar amount recovered by the employee after payment of recovery costs and credited to the insurer as advance payment of future compensation benefits. In fact, this contingent interest begins to accrue and to vest the first day after settlement, provided the employee would have qualified for continued compensation but for the third-party tortfeasor recovery. Therefore, we decide that when and as the insurer's contingent interest becomes a liability but for the third-party recovery, the insurer must reimburse the employee for the expenses of recovery chargeable to that amount. This shall be accomplished by multiplying each credit as it accrues by a second apportionment percentage to arrive at an amount the insurer must then pay to the employee. This second apportionment percentage is computed by dividing the employer's or insurer's future credit into the employee's share of cost of recovery. Employee's Share of Cost of Recovery $31,562.98 ____________________ = Apportionment Percentage for reimbursement to Employer's-Insurer's employee for cost of Future Credit recovery $61,252.99 51.52888% According to the existing order of the Worker's Compensation Bureau, employee Franges is to receive an award of $104 per week for the rest of his life or until his disability ceases. Thus, each week Franges is entitled to receive compensation benefits but for the third-party recovery, the insurer must pay the following to the employee: Employee's Compensable Wage Loss $ 104.00 Apportionment Percentage (51.52888%) X .5152888 ___________ Reimbursement to Employee by Insurer for Cost of Recovery $ 53.59 per week [19] Until the future credit is exhausted, the same formula applies to all other claims compensable under the Worker's Disability Compensation Act. The insurer will reimburse the employee an amount equal to any of the employee's future expenses which are compensable under the act multiplied by the second apportionment percentage, the apportionment percentage for reimbursement to the employee for cost of recovery.