How to Navigate the Stages in the Arizona Workers’ Comp Process
This single-page overview of Arizona workers’ compensation presents a big-picture summary of the legal and practical considerations involved in a claim. This does not constitute legal advice, but rather provides an overview of what to expect as you navigate through the state’s workers’ comp process.
Click the Headers Below to Jump Directly to Each Section
How and When to File a Workers’ Comp Claim
Filing Your Workers’ Comp Claim
When to File Your Claim
Notice of Claim Status
The Industrial Commission of Arizona (ICA)
Workers’ Compensation Insurance
Your Right to Arizona Workers’ Compensation
If you suffer a work-related illness or injury in Arizona, the workers’ compensation system is available to cover your medical expenses and most of your lost income. Unlike a personal injury lawsuit, you don’t need to prove negligence to recover benefits. You still need to establish a period of partial or total disability, and you might need to prove other facts along the way, such as the link between your job and your medical condition.
Most employers are required by law to carry workers’ compensation insurance for their employees. If your employer—for whatever reason—is not covered by insurance, you can still apply for workers’ comp benefits through a special fund at the Industrial Commission. A few big employers are self-insured.
Sometimes there’s an issue concerning the employment relationship — are you considered an independent contractor or an employee? Your eligibility for workers’ comp benefits does not depend on labels, but is based instead on a practical view of your relationship with your workplace.
Establishing That Your Injury Is Work-Related:
Eligibility for workers’ comp benefits depends on proving a connection between the injury or illness and the job. Aggravation of a previous condition is usually covered, depending on the facts of your case. Arizona law states that an “injury by accident” suffered “in the course and scope of employment” is eligible for compensation, but many cases leave plenty of room for argument whether the injury or illness is compensable.
Examples of compensable injuries and illnesses can include traumatic injuries due to falls, burns, chronic injuries due to repetitive stress, illnesses caused by exposure to chemicals at work, or even psychiatric illnesses such as PTSD.
Proving a Period of Disability:
To prove a period of disability, you must receive active medical treatment and have a physician’s opinion that you are unable to perform any type of work (“temporary total disability”) or that you are unable to perform the job you were doing when you were injured (“temporary partial disability”). In many cases, a period of temporary total disability is followed by a period of temporary partial disability. At that point the injured worker has either made a full recovery, or is eligible for permanent partial or total disability benefits.
How and When to File a Workers’ Comp Claim
Arizona workers’ compensation is meant to be a faster, less adversarial, and more certain process than the personal injury litigation system. Nevertheless, it’s easy to make mistakes or miss deadlines in a workers’ comp case, so it’s a good idea to seek an attorney’s advice as soon as you run into trouble — perhaps about a month after you file your claim, when you receive your first Notice of Claim Status.
Filing Your Workers’ Comp Claim:
To begin your workers’ compensation case, you complete a Worker’s Report of Injury form and send it to the Industrial Commission of Arizona (ICA). The form is available at doctors’ offices, emergency rooms, or online from the ICA itself.
You need to complete and submit the form within one year of the accident, or within one year of the time you knew—or should reasonably have known—you suffered a work-related injury or illness. Do NOT let your employer or its insurer file this form for you!
When to File Your Claim:
You should file your Report of Injury as soon as your physician says you can’t go back to work. In serious injury cases, this will be right away. In some cases, however, when conservative treatment doesn’t result in a full recovery, you might need surgery some weeks or months after the initial injury. In that situation, you should file your claim as soon as it’s clear that you’ll need to miss work for an extended period of time.
Notice of Claim Status:
Assuming you filled out your Report of Injury form correctly, the first word you’ll receive on your claim is a Notice of Claim Status sent to you by mail. This usually comes from the employers’ workers comp insurance carrier.
You will receive Notice of Claim Status mailings at various points of your workers’ comp case. They are always important, and there is always a deadline for responding to them. The Notice of Claim Status will tell you whether your claim is accepted or denied, the amount of your lost wage benefits, or that your benefits will be reduced or terminated. Many workers’ comp claimants decide to involve an attorney after receiving a negative Notice of Claim Status from the employer’s insurer. If you ignore a Notice of Claim Status, you risk losing valuable rights.
The Industrial Commission of Arizona (ICA):
The ICA is the Arizona state agency that administers the workers’ compensation system. It has various functions. Its Claims Department issues Notices of Average Monthly Wage and Unscheduled Permanent Awards. Its Hearing Division resolves disputes between injured workers and their employers’ insurance carriers.
Disputes are adjudicated at hearings conducted by ICA administrative law judges, who are impartial and do not provide legal advice. You will almost certainly need an attorney to represent you at these hearings, since insurance carriers are always represented.
Workers’ Compensation Insurance:
The main thing to know about workers’ comp insurance is that the insurer is paid by and works for the employer, not the injured worker. The insurance company defends the employer against your claim in ICA proceedings. If there’s a legitimate basis for denying your claim or terminating your benefits, the insurer will use it against you.
How Much Can You Collect?
Workers’ compensation typically pays two thirds of an injured employee’s lost wages, plus all reasonable and necessary medical expenses associated with the work-related injury or illness. As the worker’s condition improves from total to partial disability, the wage component of the benefit will be modified accordingly. Wage benefits are paid every 14 days or monthly. If the worker never recovers to the point of resuming his or her original work, retraining for other employment might also be available.
Average Monthly Wage:
Critically important as the baseline for calculating lost wage benefits, average monthly wage (AMW) is first proposed by the employer, then reviewed by the ICA. If your initial claim for workers’ comp is accepted by the employer and its insurer, check the AMW in the Notice of Average Monthly Wage issued by the Industrial Commission for accuracy, because it is sometimes understated.
The AMW should include wages, tips, overtime and most other payments received through employment. It’s up to the injured worker to make sure that the AMW stated on your Notice is complete and accurate. If you believe the AMW is too low, you need to request a hearing before the ICA within the time period stated on your Notice.
There’s a ceiling on lost wage benefits — no matter how much you earn at your job, your AMW for injuries suffered on or after January 1, 2017 will be capped at $4,521.92, and you’re entitled to no more than 66.67 percent of that figure each month during a period of total temporary disability.
In the “total temporary” stage, the injured worker’s physician has advised him that he cannot work. During this stage, he is entitled to compensation of 2/3’s of his average monthly wage, which is paid every 14 days.
In the “partial temporary” stage, an injured worker has been released by a physician to light or limited work activity. While the injured worker continues to receive treatment he is entitled to compensation of 2/3’s of the difference between his average monthly wage and his earnings, if any, from light or modified work. Unemployment benefits are considered earnings. Compensation is paid monthly; however, the injured worker must show that he has made a reasonable effort to find suitable work to continue receiving partial temporary compensation.
Scheduled and Unscheduled Disabilities:
The amount of your workers’ comp permanent benefit payment will depend on whether you suffered a “scheduled” or “unscheduled” disability. “Scheduled” disabilities are those that are listed in the Arizona workers’ compensation statute, and are very specific — for example, if you lose a thumb at work, you get 55 percent of your average monthly wage for 15 months as permanent partial disability compensation on top of what you collected as temporary total disability for injuries suffered in the same accident. If you lose a leg, you get that amount for 50 months. Different combinations of scheduled disabilities yield different payment calculations.
Unscheduled disabilities are all impairments that do not appear in the statutory schedule. Examples of unscheduled disabilities include occupational diseases, work-related psychiatric impairments, and injuries to the shoulder, hip, neck or back.
Loss of Earning Capacity:
Loss of earning capacity (LEC) is the measure of permanent disability benefits after the injured worker has reached a stationary condition: in other words, the worker’s condition has reached a plateau. The worker cannot return to the previous employment, but there is other suitable work that is reasonably available at a lower wage. For an unscheduled disability, the worker may be entitled to an LEC benefit of 55 percent of the difference between the average monthly wage and what the worker can earn in a less arduous, lower paying job. Disputes about your right to LEC benefits are resolved in a hearing before the ICA.
Litigating Your Workers’ Comp Case
Things can move fast after you file a claim for workers’ compensation. You’ll probably receive your first Notice of Claim Status within a month. If your claim is denied, you’ll need to file a request for hearing with the ICA. Hearing dates are usually set for 60 days after the request, and there’s a lot that happens in the meantime.
Interrogatories are written questions that must be answered in writing under oath. The insurer usually sends the injured worker a set of interrogatories shortly after the hearing date is set. Meanwhile, your lawyer will probably send a set of questions for the insurer to answer at about the same time, to see what evidence the insurer is likely to present.
Your attorney will help you respond to insurer’s questions. What you say in writing about your case can and will be held against you.
The deposition is a critical stage in your workers’ comp claim. This is an oral examination before a court reporter, under oath, where the insurer’s lawyer asks the injured worker questions about the claim, the injury, the progress of recovery, and any other feature of the claim that is relevant.
Obviously, the insurer tries to develop evidence that could undermine your claim. Your lawyer will make sure that you are fully prepared for your deposition and will protect you from the subtle traps that the examining attorney may lay out for you. Ideally, there will be no inconsistencies between your testimony at the deposition and the testimony you present at your ICA hearing.
Independent Medical Examination:
Generally speaking, you have the right to choose your own physician after a workplace accident, and much of the medical evidence related to your workers’ comp claim will come from your attending physician. However, the employer and its insurer have the right to have you examined by their physician. Very often, this independent medical examiner will conclude that your condition is not as serious as your treating physician says it is, or that your injury resulted from a different cause.
Differences between the independent medical examiner and your treating physician’s opinion will be resolved through evidence presented to the administrative law judge at the ICA hearing.
Workers’ comp insurers are always on the lookout for so-called red flags, that is, features of a disability claim that suggest the possibility of exaggeration or fraud. Are you close to retirement? Do you play a sport? Are you on notice of layoff or termination? Were there no witnesses to the accident?
Any of these or other circumstances might encourage an insurer to deny your claim, but none of them means that there’s anything wrong with your case. The sooner your attorney knows that a red flag or two has popped up in your case, the better we can protect you from an unfair denial of your claim.
The employer or its insurer is responsible for 100 percent of an injured employee’s medical expenses up to the point of maximum medical improvement, or “stationary condition” as it’s also known.
There’s a catch, of course. The treatment must be reasonably necessary, and the insurer can resist payment of any recommended treatment. Additionally, the insurer can seek to impose treatment that the worker would prefer not to undergo. Noncooperation with a treating physician may be grounds for terminating workers’ comp benefits.
Unexpected news about your medical coverage may appear in a Notice of Claim Status mailing, and you’ll need to respond to any such negative development. Disputes about medical treatment can sometimes be resolved only through a hearing before an ICA administrative law judge.
Resolution Of Your Workers’ Comp Claim
Workers’ compensation disputes are resolved at hearings at the ICA, and are usually decided faster than civil lawsuits.
The ICA Hearing:
If you can’t receive a satisfactory result without a hearing, your case will be decided on evidence presented before an ICA administrative law judge. Depending on the issues involved, witnesses might include the injured worker’s doctor, the insurer’s independent medical expert, coworkers, supervisors, vocational professionals, and the injured worker.
The judge hears testimony and reviews written evidence without a jury. The judge’s written decision is normally issued within 60 days of the hearing.
Request for Review and Appeal:
Within 30 days of the decision, either side can request the administrative law judge to review his decision. The request for review can seek modification of the award or outright reversal, and the other side has the chance to respond. The same judge issues a decision on review within 30 to 60 days of the request.
A party still dissatisfied with the decision can then take the case to the Arizona Court of Appeals, as long as a contested legal issue is involved. The result in that court might take a year or longer to issue its opinion.
Lump Sum Settlement:
When unscheduled injuries result in permanent partial disability, a claimant might find an insurer’s offer of a lump sum settlement very tempting. Rather than paying out a specific amount every month to the claimant indefinitely, the insurer may propose a single payment to end its obligations once and for all.
Known as compromise and settlement in Arizona workers’ comp practice, resolving a case for a single payment may not necessarily represent a good bargain for the injured worker, but it’s always a good deal for the insurer — otherwise, they wouldn’t offer it. An experienced workers’ compensation attorney will help you evaluate the pros and cons of an offer to settle, and will also help you negotiate a better deal if its features seem attractive to you.
Reopening Your Case:
Workers’ compensation cases close when the injured worker’s medical condition has become stationary, which means no longer responsive to further active treatment. Sometimes, however, a new or worsening condition related to the original job-related injury develops and requires active treatment.
To obtain coverage for such “slow-fuse” medical problems, it is possible to file a petition to reopen the claimant’s workers’ comp case. The petition must be supported by medical evidence that relates the new health problems to the previous work-related injury. The case then proceeds in the same manner as a new claim, with the employer and its insurer required to promptly respond with a Notice of Claim Status accepting or denying the Petition to Reopen.