Many adjusters and defense counsel have run into the following situation at least once: An applicant seems to disappear—he stops treating, misses evaluations, and fails to appear at hearings. Applicant’s counsel is often at a loss to explain this situation.
Then, the mystery is solved: Applicant has received an all-expenses paid trip to one of California’s correctional institutions—in other words, they’re locked up, and they aren’t getting out anytime soon.
An applicant’s incarceration creates headaches for all parties, in particular, the insurer and defense counsel. Does the insurer continue to pay indemnity? Who controls medical treatment? Does defense counsel have to wait to take applicant’s deposition?
Recent statistics from the California Department of Corrections and Rehabilitation show that California has a prison and jail population of 135,238—or roughly, the population of Fullerton, Salinas, or Pasadena. Additionally, there are 69,435 convicts on parole. California has the second highest inmate population in the country, behind Texas (154,000 inmates).
This article outlines how to handle claims involving an incarcerated applicant. Labor Code § 3370 addresses workers’ compensation benefits for both pre-incarceration and post-incarceration industrial injuries of inmates. Post-incarceration injuries are not addressed in this article because these industrial injuries are covered under separate policies. This article addresses situations where an employee suffers an industrial injury and is subsequently incarcerated.
Temporary and Permanent Disability Usually, But Not Always, Continues When an Applicant is Incarcerated in a County or City Jail
Subsection (d) of Section 3370 addresses pre-incarceration workers’ compensation claims. Employees who are incarcerated in state prisons continue to receive benefits, including temporary and permanent disability. However, indemnity payments are not issued to the inmate; rather temporary and permanent disability benefits are paid to the dependents of the inmate. “Dependents” include the inmate’s spouse or children, including an inmate’s former spouse due to divorce and the inmate’s children from that marriage.
If the inmate has no dependents, the temporary disability benefits that would otherwise be payable during the inmate’s incarceration must be paid to the State Treasury to the credit of the Uninsured Employers Fund. Permanent disability benefits that would otherwise be payable during the inmate’s incarceration must be held in trust for the inmate by the Department of Corrections during the period of incarceration.
There are a few important aspects to this section. First, section 3370(d) applies only to situations where an employee is incarcerated in a state penal or correctional institution”—not a city or county jail. Therefore, where an employee is injured and is subsequently incarcerated in a city or county jail, the inmate continues to receive TD and PD benefits. This was made clear in The Brickman Group v. WCAB (Martinez), 72 CCC 357 (2007), where the WCAB denied an insurer’s petition to terminate temporary disability after applicant was incarcerated in county jail on homicide charges. The Martinez decision clearly held that “applicant, as a county jail inmate, is not covered by Labor Code section 3370 and is not otherwise barred from receiving benefits.”
Second, subsection (a)(3) provides that where a state prison inmate who has been receiving benefits (presumably benefits paid to his dependents) is released from prison, and is subsequently incarcerated in either a state, county, or city jail, “the benefits shall cease immediately upon the inmate’s reincarceration and shall not be paid for the duration of the reincarceration.”
To summarize, temporary and permanent disability payments do not stop if an employee is incarcerated in a county or city jail. However, when an employee is incarcerated in a state prison, indemnity is paid to his dependents or the state, if he has no dependents.
The Insurer Has an Obligation to Continue Discovery and Medical Treatment Despite an Employee’s Incarceration
Indemnity payments are easy enough—the insurer issues payments as described above. But what about medical-legal evaluations and medical treatment? Unfortunately, it appears that an employee’s incarceration does not relieve the insurer of its obligation to continue medical care. In Martinez, the WCAB held that an insurer was obligated to find a medical provider who would be willing to evaluate applicant—a suspected murderer—in jail.
This decision appears to conflict with Section 3370(c), which provides that “the Department of Corrections shall have medical control over treatment provided an injured inmate while incarcerated in a state prison, except, that in serious cases, the inmate is entitled, upon request, to the services of a consulting physician.”
Further confusing this issue is the fact that subsection (d) (which addresses pre-incarceration injuries) does not expressly include subsection (c) (medical control) regarding pre-incarceration injuries. This raises the question as to who has medical control—the state, the inmate, or the insurer.
No WCAB or Court of Appeal decision has clarified this question. However, it is difficult to imagine an applicant or insurer controlling applicant’s medical care while he is incarcerated. It appears that the best an insurer can do is find a treating physician to treat the employee, work with the jail or prison’s medical unit to arrange regular evaluations, and coordinate with the institution to ensure that the applicant has access to the treatment recommended by the treating physician. However, because section 3370(c) gives the state exclusive control over medical care, the insurer is at a distinct disadvantage in controlling medical care.
Discovery May Continue While An Employee is Incarcerated
Discovery may continue while an applicant is incarcerated. For example, defendant may depose applicant while he is incarcerated. In Hammond v. WCAB, 64 CCC 449 (1999), the Board offered a number of suggestions for continuing litigation while an employee is incarcerated, including (1) deferring action until Applicant is out of prison, (2) holding a trial in prison, (3) transporting Applicant to a WCAB hearing, and (4) taking Applicant’s deposition in prison. The Board contended that taking Applicant’s deposition in prison was the “most appropriate remedy for giving a prisoner meaningful access to Board proceedings.”
The statute of limitations is not tolled while an injured worker is incarcerated. If an applicant suffers an industrial injury and receives a claim form, but fails to file an application for adjudication within one year, the claim may be barred under Labor Code §§ 5405 and 5410. California Contractors Network, Inc., v. WCAB (Hanss), 74 CCC 780 (2009). However, if the applicant seeks to reopen a claim that was filed before the incarceration, the Board will likely allow applicant to pursue this claim despite failing to take any action because of their incarceration. Nolan v. Workers’ Comp. Appeals Bd., 70 Cal.App.3d 122 (1977).
Even though there is some guidance in the law concerning incarcerated applicants, there are still many grey areas that may create potential pitfalls for insurers.
To summarize the main points of this article:
- When an applicant is incarcerated in county or city jail, the insurer must continue to pay TD and PD to applicant.
- If an applicant is incarcerated in a state prison, TD is paid to applicant’s dependants (or the State) and PD is paid to the state to be held in trust until his release.
- If an applicant is released and then reincarcerated in a state, county, or city jail, all benefits may cease immediately upon reincarceration and is not be payable for the duration of the incarceration.
- Benefits cannot be terminated because an applicant is incarcerated and is unavailable for medical evaluations. The insurer has the burden to find a doctor who is willing to evaluate an applicant in jail.
- Discovery may continue while an applicant is incarcerated, including applicant’s deposition and holding hearings and trials in prison.
Michael P. Burns is an attorney out of our San Jose Office. He can be reached at email@example.com or (408) 392-8202.
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