Jordan v. Bath Iron Works
March 29, 2018
CategoriesCoordination of Benefits
Back Partial Benefits Apportionment
Summary from the Troubh Heisler Attorneys
Mr. Jordan injured his back in 1987 when BIW was insured by AIG, and he re-injured it in 2006 when BIW was self-insured. In 2007 the Board awarded Mr. Jordan 90% partial incapacity benefits and assigned 90% responsibility to BIW/AIG and 10% to BIW/Self-insured. As the second insurer, BIW/Self paid Mr. Jordan the entire benefit and sought reimbursement from BIW/AIG.
Operating under the old law (39 MSA §62-B), BIW/AIG applied an offset for pension benefits paid to Mr. Jordan under BIW's pension plan, which allowed it to discontinue reimbursement. BIW/Self argued that BIW's contributions to that plan came after AIG's period of coverage ended, so BIW/AIG was not entitled to the offset. BIW/Self filed a Petition for Order of Payment, which Judge Goodnough granted on the basis that BIW/AIG was not really the “employer” for purposes of the pension benefit offset. BIW/AIG appealed.
The Appellate Division entered an order vacating Judge Goodnough’s decision and denying BIW/Self's petition. The AD panel held that the employer and insurer remain one entity for the purpose of §62-B, which was enacted to prevent double recovery of both retirement and compensation benefits. BIW/Self argued that its interests were adverse to BIW/AIG, but the panel said the WC Act does not make "adversity" a test for whether one insurer "stands in the shoes of the employer," regardless of whether the employer later becomes self-insured.