“Go directly to jail. Do not collect indemnity (and medical)”
By: Patrick Johnson
While it is a rare circumstance, what you do with a claimant who is incarcerated but otherwise entitled to indemnity does occasionally arise. In what may be a shock to some who see everything in Louisiana as benefiting the employee, there are limitations on the payment of indemnity and medical benefits to injured employees who are incarcerated. Found in LSA-R.S. 23:1201.4, which is dedicated solely to this issue, what you may owe is governed by these rules:
- All forms of indemnity and medical benefits owed to the actual injured employee are forfeited during any period of incarceration. “Incarceration” in this provision does mean merely that the injured employee is in a formal correctional facility. It also applies to injured employees who are assigned to a halfway house or other transitional facility to integrate them back into society. If you have a claimant who is incarcerated, you file an LWC-WC-1002 for “Suspension/Termination” and select “Other (Describe)” and type/write in that the employee is incarcerated. You may also want to take the opportunity to notify the health care providers that no medical bills will be paid during any period of incarceration. Sometimes, incarcerated individuals are transported to outside treatment facilities.
- If the injured employee has dependents who rely upon them for financial support, a judge can award that the indemnity benefits be paid to the dependents or the dependent’s legal guardian. This right does not extend to any dependent. The dependent(s) must be financially dependent upon the injured employee, and so the burden of proof is on the alleged dependent to support that they are financially dependent. There is no presumption in favor of financial dependency.
Upon full release, the injured employee has their right to indemnity and medical benefits restored. This also applied if the indemnity was previously paid to their dependents. The payment of the indemnity reverts to the injured employee. You do not owe for those benefits not paid under the forfeiture. You will also need to keep track of when the injured employee is released, as your obligation to restore benefits is upon release, and not when you learn of the release. By not monitoring it, you may leave yourself open to a fight against penalties for not timely resuming indemnity and medical benefits. Ensure in writing that the injured employee or their attorney are to notify you immediately upon their release.
One odd issue that occasionally arises is whether prescription runs against a claimant who is in jail, if their right to indemnity and medical benefits are suspended. One may say that if the claimant cannot recover benefits, then prescription does not run. Well, due to a recent ruling, the Third Circuit Court of Appeal determined that a claimant must still sue to protect their rights, even if they are incarcerated and then entitled to benefits.
