Contact Form

Things Clients Want to Know (NOVEMBER 2011)

Wednesday, March 28, 2012

What are the benefits I get when I pay salary continuation?
(Wages in lieu of temporary total compensation)

Under MIRA II, Salary Continuation lost its luster?

The joys of salary continuation are waning. Salary continuation was initially the first recommendation to an employer with a lost time claim. Why? Because it allowed the employer to keep its premiums low by not paying temporary total compensation in the claim and suppressing the indemnity reserve.

Under MIRA II, salary continuation claims with dates of injury on or after January 1, 2011 will be eligible for the entire MIRA II reserve. Claims with dates of injury prior to January 1, 2011, will be grandfathered in and will continue to have the reserve suppressed for the life of the claim.

The changes will first impact rates for the private employer in the policy year beginning July 1, 2013 and for the public employer, January 1, 2013.

Timing is everything. Extended salary continuation precludes an employer from using the benefits of the 90 day examination, return to light duty and the change of living maintenance. For injuries such as strains when the recovery time is approximately 8-12 weeks, salary continuation can still be of a benefit because you will save the temporary total costs that the BWC will not pay. However, as salary continuation continues see the chart below for the diminishing savings for a maximum wage benefit of $783.00 and regular wages of approximately $1,400.00:




As always, the inquiry with regard to whether salary continuation is appropriate needs to be evaluated on a case by case basis. Please contact your third party administrator to do an impact study reflecting the payment of temporary total compensation on your premiums.

Back to Blog