The employee in this matter sustained a fatal injury while working for the employer. The employee’s surviving spouse and four minor children began receiving dependency benefits from the insurer in 1996. The employee’s surviving spouse indicated that she was receiving social security benefits, requiring the insurer to recalculate the amount of dependency benefits payable to the dependents.
The initial payments made to the dependents resulted in an overpayment, which the insurer recovered by reducing the monthly benefits paid to the dependents. In 2003, after obtaining additional documentation from the dependents, the insurer determined the dependency benefits paid resulted in an additional overpayment, again resulting in a reduction of benefits until the overpayment was recovered.
Thereafter, the insurer continued to contact the employee’s surviving spouse to request updated social security benefit information and whether the employee’s children remained in school, continuing their eligibility for dependency benefits.
After obtaining additional social security benefit documentation in 2009, the insurer calculated an underpayment of benefits from January 1, 2008 through March 19, 2009. The insurer then requested additional documentation to determine whether there were further underpayments at issue. No payments were issued to remedy the amount of underpayments. The insurer indicated that upon receiving all necessary information she would complete an audit in order to determine the necessary adjustments.
The insurer was unable to obtain all of the necessary documentation in order to perform an audit until the end of August of 2013. By this time the employee’s surviving spouse had passed away, and his eldest child provided the insurer with all necessary documentation. In the spring of 2014 the insurer informed the dependents that there was a large underpayment of benefits, and later raised the possibility of settling the underpayment. The dependents retained an attorney to represent their interests in a mediation session. However, the mediation was canceled and the dependents filed a Claim Petition on September 8, 2014 alleging underpayment of compensation benefits and seeking penalties. After the mediation was canceled, the insurer issued checks to the dependents totaling $60,947.74 in underpayment of dependency benefits.
In July 2015, the insurer identified an additional underpayment and issued another check to the dependents.
A hearing was held on February 5, 2016. The compensation judge held that statutory interest was not due, and that penalties should not be awarded as the payments were not unreasonably delayed, nor did the insurer neglect or refuse to pay compensation when due. The dependents appealed the compensation judge’s Decision.
The WCCA indicated they may review questions of law de novo, and that interest payable pursuant to Minn. Stat. §176.221, Subd. 7 concerned a question of law. The WCCA stated that the plain language of the statute indicates that interest is mandatory on any delayed payment of benefits, including underpayment. As such, the compensation judge did not have the discretion to determine interest was not payable as a result of the insurer lacking the information necessary to calculate the total amount of underpayments. Further, according to Hop v. Northern States Power, 56 W.C.D. 73, 77 (W.C.C.A. 1996) the responsibility to pay statutory interest dates back to the date the correct amount of benefits should have been paid. The WCCA reversed the compensation judge’s determination that interest was not payable.
The WCCA affirmed the compensation judge’s determination that penalties were not due.