State of Connecticut Workers' Compensation Commission

MEMORANDUM NO. 1998-09

Cost-of-Living Adjustments

 

TO: All Commissioners, District Administrators, Attorneys, Insurance Carriers, Self-Insureds, Unions, Workers' Compensation Advisory Board and Legal Advisory Panel
FROM: Jesse M. Frankl, Chairman
DATE: June 15, 1998
RE: Cost-of-Living Adjustments

 

The Connecticut legislature has passed Public Act 98-104, "An act concerning workers’ compensation death benefits, cost-of-living adjustments and the second injury fund advisory board," which will take effect on July 1, 1998. This act primarily affects COLA calculations in cases where a compensable injury occurred prior to October 1, 1990, and caused either the death or the total disability of the employee. It does not alter the way COLAs are calculated for anyone injured on or after October 1, 1990, because such individuals would not be entitled to any COLAs calculated using the "dollar" COLA method that was legally in effect until September 30, 1991.

The revised statute changes the method in which COLAs are calculated by requiring all "dollar" COLAs accrued as of October 1, 1990 to be added to the base compensation rate that is used as a multiplicand in the annual calculation of a claimant’s "percentage" COLA. More specifically: our Supreme Court determined in Gil v. Courthouse One, 239 Conn. 676 (1997), that COLAs for these claimants should be calculated by dividing the current maximum compensation rate by the maximum compensation rate effective on October 1, 1990, and multiplying that figure by the claimant’s base compensation rate, i.e., the compensation rate as of the date of injury. The resulting figure would then be added to the claimant’s COLA on October 1, 1990. See Gil, supra, at 692. P.A. 98-104 changes this calculation by making the claimant’s compensation rate as of October 1, 1990 the base compensation rate, in effect. Read in conjunction with Gil, the new statutory formula still requires that the current maximum compensation rate be divided by the maximum compensation rate effective on October 1, 1990. However, that figure is now multiplied by the claimant’s full compensation rate as of October 1, 1990, including all "dollar" COLAs accrued up to that point. Please note that this new formula is not precisely identical to the alternate method outlined on pages 693-94 of the Gil decision; a two-step calculation is still necessary in order to determine the correct compensation rate.

Section 6 of the new act states it shall take effect on July 1, 1998 (with the exception of § 1, which does not concern cost-of-living adjustments). Section 4 explains that, not later than sixty days after July 1, 1998, the weekly benefit of anyone receiving benefits under § 31-306 or § 31-307a shall be recalculated to July 1, 1998 "as if such benefits had been subject to recalculation annually according to the provisions of said sections." Within that 60-day period, any party responsible for providing weekly benefits under § 31-306 or § 31-307a must begin providing benefits at the recalculated rate, with the change in benefits commencing at the beginning of a full week. Thus, by August 31, 1998, all changes required by Public Act 98-104 must be in place.

 

Calculating COLAs on Total Disability Benefits for injuries prior to 7/1/93

(Example: Date of Injury - 1/5/87, Base Rate - $300.00)
 

  1. Find the date of the accident using the appropriate table based on the date of injury.
     
  2. Add the dollar COLA adjustments subsequent to that date, if applicable, to the original base rate. This figure represents the adjusted base compensation rate. (For injuries occurring on or after 10/1/90, there will be no dollar COLA adjustments.)
     
    (e.g. base $300 + 10/1/87 $21 + 10/1/88 $18 + 10/1/89 $15 + 10/1/90 $17 = $371)
     

  3. Divide the current maximum by the 10/1/90 maximum in order to obtain a COLA percentage for the years 1991-1997 (the 1998 COLA will not be available until October 1). *For injuries on or after 10/1/91, use the maximum applicable on the date of injury.
     
    (e.g. $605 ÷ $479 = 1.262 or a 26.2% increase)
     

  4. Multiply that % times the adjusted base compensation rate to get the COLA for 1991- 1997.
     
    (e.g. Adjusted base compensation rate of $371 x 26.2% for the latest COLA = $97.20)
     

  5. Add this COLA to the adjusted base rate for the correct total.
     
    (e.g. Adjusted base $371 + current $97.20 = $468.20)
     

** To calculate COLAs for injuries occurring before 10/1/69, you must add in the appropriate adjustment as provided by 31-307a(b):

-----For injuries between 10/1/68 and 9/30/69 add $4.00.
-----For injuries between 10/1/67 and 9/30/68 add $6.00.
-----For injuries prior to 10/1/67 add $15.00.
 

 

Calculating COLAs on Survivor’s Benefits for injuries prior to 7/1/93

*For death benefits resulting from injuries on or after October 1, 1977 refer to and follow the above explanation for Total Disability Benefits.

For death benefits resulting from injuries which occurred before 10/1/77, Sec. 31-306(a)(2)(B) requires the following method be used:

(Example: Date of Injury - 11/21/75, Base Rate - $100.00)
 

  1. Multiply the base rate by 25% to obtain the partial COLA.
     
    (e.g. Base rate $100 x .25 = $25.00)
     

  2. Add together all the COLAs which "accrued" between 10/1/80 and 10/1/90 using the table on Page 1 for Injuries Prior to 12/31/78. Add these to the original base rate and the partial COLA to obtain the adjusted base rate.
     
    (e.g. The total is always going to be $146.00, added to $25.00 and the base rate of $100.00 to obtain a figure of $271.00.)
     

  3. Divide the current maximum by the 10/1/90 maximum in order to obtain a COLA % for the years 1991 through 1997.
     
    (e.g. - 1997 Maximum for Injuries Prior to 12/31/78 = $404 divided by the 1990 Maximum for Injuries Prior to 12/31/78 which is $320 which equals 1.262 or a 26.2% increase)
     

  4. Multiply that % times the adjusted base compensation rate to get the COLA for the years 1991 through 1997.
     
    (e.g. Base rate $271 x .262 for the current COLA = $71.00)
     

  5. Add this COLA to the adjusted base rate to get the current compensation rate.
     
    (e.g. Adjusted base $271 + current $71.00 = $342.00)
     

     

Calculating COLAs on Total Disability* and Survivor’s Benefits for injuries occurring on or after July 1, 1993

(Example: Date of Injury - 2/27/94, Base Rate - $450.00)
 
  1. Locate the date of the accident in the appropriate table (the last one on the chart)
     
  2. Divide the maximum weekly wage on the date of injury by the current maximum to obtain a COLA percentage.
     
    (e.g. $715 ÷ $638 = 1.121 or a 12.1% increase.)
     

  3. Multiply that percentage by the base compensation rate to get the COLA for the years between the date of injury and 1997.
     
    (e.g. $450 x .121 = $54.45.)
     

  4. Add the COLA to the base rate to obtain the claimant’s current adjusted compensation rate.
     
    (e.g. base $450 + COLA $54.45 = compensation rate of $504.45.)
     

* only applies to claimants who are permanently totally disabled or who have been totally disabled for a period of five years or more

 

 

TABLES:

 

Injuries Through   12 - 31 - 1978

Effective Date Maximum Rate COLA  
10 - 1 - 1969** $80.00 —  
10 - 1 - 1970 $84.00 $4  
10 - 1 - 1971 $95.00 $11  
10 - 1 - 1972 $102.00 $7  
10 - 1 - 1973 $112.00 $10  
10 - 1 - 1974 $119.00 $7  
10 - 1 - 1975 $126.00 $7  
10 - 1 - 1976 $135.00 $9  
10 - 1 - 1977 $147.00 $12  
10 - 1 - 1978 $160.00 $13  
10 - 1 - 1979 $174.00 $14  
10 - 1 - 1980 $190.00 $16  
10 - 1 - 1981 $207.00 $17  
10 - 1 - 1982 $217.00 $10  
10 - 1 - 1983 $230.00 $13  
10 - 1 - 1984 $254.00 $24  
10 - 1 - 1985 $265.00 $11  
10 - 1 - 1986 $272.00 $7  
10 - 1 - 1987 $286.00 $14  
10 - 1 - 1988 $298.00 $12 % COLA
10 - 1 - 1989 $308.00 $10 Increase
10 - 1 - 1990 $320.00 $12 Since 1990
10 - 1 - 1991 $328.00   2.5%
10 - 1 - 1992 $342.00   7.0%
10 - 1 - 1993 $353.00   10.3%
10 - 1 - 1994 $379.00   18.3%
10 - 1 - 1995 $390.00   21.8%
10 - 1 - 1996 $393.00   22.9%
10 - 1 - 1997 $404.00   26.2%

 

Injuries From    1 - 1 - 1979    Through    9 - 30 - 1979

Effective Date Maximum Rate COLA  
  1 - 1 - 1979 $204.00 —  
10 - 1 - 1979 $222.00 $18  
10 - 1 - 1980 $242.00 $20  
10 - 1 - 1981 $263.00 $21  
10 - 1 - 1982 $277.00 $14  
10 - 1 - 1983 $293.00 $16  
10 - 1 - 1984 $324.00 $31  
10 - 1 - 1985 $338.00 $14  
10 - 1 - 1986 $347.00 $9  
10 - 1 - 1987 $365.00 $18  
10 - 1 - 1988 $380.00 $15 % COLA
10 - 1 - 1989 $393.00 $13 Increase
10 - 1 - 1990 $408.00 $15 Since 1990
10 - 1 - 1991 $418.00   2.5%
10 - 1 - 1992 $436.00   7.0%
10 - 1 - 1993 $450.00   10.3%
10 - 1 - 1994 $482.00   18.3%
10 - 1 - 1995 $496.00   21.8%
10 - 1 - 1996 $501.00   22.9%
10 - 1 - 1997 $514.00   26.2%

 

Injuries From    10 - 1 - 1979    Through    9 - 30 - 1987

Effective Date Maximum Rate COLA  
10 - 1 - 1979 $261.00 —  
10 - 1 - 1980 $285.00 $24  
10 - 1 - 1981 $310.00 $25  
10 - 1 - 1982 $326.00 $16  
10 - 1 - 1983 $345.00 $19  
10 - 1 - 1984 $381.00 $36  
10 - 1 - 1985 $397.00 $16  
10 - 1 - 1986 $408.00 $11  
10 - 1 - 1987 $429.00 $21  
10 - 1 - 1988 $447.00 $18 % COLA
10 - 1 - 1989 $462.00 $15 Increase
10 - 1 - 1990 $479.00 $17 Since 1990
10 - 1 - 1991 $491.00   2.5%
10 - 1 - 1992 $513.00   7.0%
10 - 1 - 1993 $529.00   10.3%
10 - 1 - 1994 $567.00   18.3%
10 - 1 - 1995 $584.00   21.8%
10 - 1 - 1996 $589.00   22.9%
10 - 1 - 1997 $605.00   26.2%

 

Injuries From    10 - 1 - 1987    Through    6 - 30 - 1993

Effective Date Maximum Rate COLA  
10 - 1 - 1987 $643.00 —  
10 - 1 - 1988 $671.00 $28 % COLA
10 - 1 - 1989 $693.00 $22 Increase
10 - 1 - 1990 $719.00 $26 Since 1990
10 - 1 - 1991 $737.00   2.5%
10 - 1 - 1992 $769.00   7.0%
10 - 1 - 1993 $793.00   10.3%
10 - 1 - 1994 $850.00   18.3%
10 - 1 - 1995 $876.00   21.8%
10 - 1 - 1996 $883.00   22.9%
10 - 1 - 1997 $908.00   26.2%

 

Injuries On or After    7 - 1 - 1993     (COLAs as of   10 - 1 - 1997,   including retroactive payment)

Effective Date Maximum Rate COLA
since   7 - 1 - 1993
  7 - 1 - 1993 $628.00 —
10 - 1 - 1993 $638.00 1.59%
10 - 1 - 1994 $660.00 5.10%
10 - 1 - 1995 $656.00 —
10 - 1 - 1996 $678.00 7.96%
10 - 1 - 1997 $715.00 13.85%