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Re-Evaluating Iowa Code 85.34(4) and (5) and Deutmeyer

It seems like a fairly easy concept … if an employer and carrier pay more benefits than what is statutorily required in a workers’ compensation claim, then they get a credit for those benefits overpaid against any additional award/settlement funds … then came along Deutmeyer (See Swiss Colony, Inc. v. Deutmeyer, 789 N.W.2d 129 (Iowa 2010)). Deutmeyer brought the statutory wording of Iowa Code Sections 85.34(4) and (5) (those dealing with credits for overpayments of benefits) to the forefront for examination, and attempted to clearly delineate the statutory direction as to how overpayments of benefits due to a later discovered rate variation should be handled as potential credits. The Deutmeyer Court held that the overpayment of the permanency benefits due to a rate variation that occurred in that case would only create a credit towards a future injury rather than with the current injury as directed by 85.34(5). Due to the wording used in the finding from Deutmeyer (“85.34(5) must be interpreted to apply to all overpayments of benefits”), many claimant attorneys are now arguing that Deutmeyer requires all overpayment of weekly benefits due to a rate variation (whether temporary or permanency) to be credited towards future injuries. Defense attorneys are arguing that Deutmeyer is limited to only overpayments of
permanency benefits due to rate variation, but even more, that statutory change is needed to right this simple concept that all should agree upon.

If a person is accidentally paid greater wages than he/she agreed to for work completed, not many would deny an employer’s right to take a credit against future wages for that overpayment. With the current 85.34(4) and (5) and Deutmeyer, though, we are requiring that the Employer and Insurance Carrier essentially forfeit this overpayment due to rate variation (how many times has anyone actually known of an employer and carrier actually getting to claim the credit for overpayment from a prior injury for a future injury?).

The clear language of Iowa Code Section 85.34(5) evinces that it was written to pertain to the situation where an employer and carrier paid more weeks of permanency than what was awarded (either voluntarily or errantly). It is reasonable in that situation for an employer’s and carrier’s right to a credit to apply to a future injury, as there is not much expectation of potential for further benefits to be owed under the original injury. It is not as reasonable to require employers and carriers to be forced to have credits against a future injury rather than the current injury when the credit comes about from overpayment of benefits due to a rate variation, as there is still clear potential for further permanency benefits to be owed in most rate variation situations. Instead of essentially throwing away the right to the credit (by making it for future injuries), a properly worded statute and interpretation would allow a credit for any overpayment of benefits (either temporary or permanency) due to a rate variation against any potential future award of any benefits for that same injury. Of course, employers and carriers could be required to be held to the same additional standards of 85.34(4) wherein they must have acted in good faith and provide proper notice to the claimant.

As it currently sits, the interpretation of 85.34(4) and (5) through Deutmeyer has been tilted illogically and unfairly in the claimants’ favor. Hopefully parties to both sides of this issue can be honest about that and work towards a simple slight statutory change to effectuate a system more logical and fair for all involved, putting the balance of the great compromise back into place.

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