Opinion
W.C. No. 4-342-883
February 25, 1999.
FINAL ORDER
The claimant seeks review of a final order of Administrative Law Judge Erickson (ALJ) which denied the claimant's request to increase the average weekly wage based on the respondent-employer's contribution to his union "health insurance fund." We affirm.
The claimant was a member of the Sheet Metal Workers Union. For each hour the claimant worked, the employer would contribute $1.72 to the "health and welfare fund" of the claimant's union. The claimant sustained an injury on May 1, 1997, and ceased work on July 7, 1997. As of July 7, the employer made no further contributions to the health and welfare fund.
Nevertheless, the claimant remained eligible for union health insurance coverage from July 7 through the March 24, 1998 hearing. The claimant remained eligible for health insurance because prior to the injury he worked an average of one hundred sixty hours per month, and the union required that he work only one hundred hours per month to maintain health insurance. To the extent the claimant worked more than one hundred hours per month the union "banked" the excess hours. Consequently, when the claimant worked less than one hundred hours per month he could draw on the banked hours and remain eligible for health insurance. Because the claimant began drawing on his banked hours, his eligibility for health insurance was due to expire on March 31, 1998.
The claimant requested the ALJ to increase the average weekly wage for the period July 8, 1997, through March 31, 1998, "to reflect the $1.72 per hour no longer contributed by the employer after July 7, 1997." However, the ALJ refused because he found that the claimant incurred no "cost of converting" to a similar or lesser insurance plan during the disputed period. The respondents stipulated that they would increase the average weekly wage when the claimant's eligibility for union insurance expired on March 31.
On review, the claimant contends the ALJ erred in refusing to increase the average weekly wage because the depletion of his "banked hours" constituted a "cost of continuing the employer's group health insurance plan" within the meaning of § 8-40-201(19)(b), C.R.S. 1998. The claimant reasons that the banked hours were "something important to him, and something which was tangible and of value." The claimant analogizes the banked hours "to those cases where an employee has his accrued sick leave or vacation time reduced subsequent to his injury so that he can continue receiving a paycheck from his employer without interruption." We are not persuaded.
Section 8-40-201(19)(b) provides that the term wages "shall include the amount of the employee's cost of continuing the employer's group health insurance plan and, upon termination of the continuation, the employee's cost of conversion to a similar or lesser insurance plan." The overall purpose of this statute is to insure that claimants have access to funds to purchase health insurance previously provided by the employer as a fringe benefit of employment. See Schelly v. Industrial Claim Appeals Office, 961 P.2d 547 (Colo.App. 1997); Turner v. Technology Products, Inc., W.C. No. 3-965-536 (April 30, 1996).
Here, despite the loss of his job, the claimant continued to receive union health insurance coverage through March 31, 1998, and the coverage was provided based on the employer's contribution to the union's health fund. In our view, increasing the average weekly wage for the disputed period would create a double recovery because the claimant would have the benefit of the insurance coverage while receiving an increase in the average weekly wage to compensate for the "cost" of maintaining the coverage. See Smith v. Teledyne Water Pik, W.C. No. 4-101-833 (January 10, 1995). Such a result would be inconsistent with the purpose of the statute, and we decline to interpret it in this way.
Moreover, we do not consider the claimant's "banked hours" to be the type of "cost" contemplated by § 8-40-201 (19) (b). In effect, the claimant is arguing that his employer's contribution to the union, which the union then converted to banked hours, is the kind of fringe benefit which must be included in the average weekly wage. However, § 8-40- 201(19)(b) provides that the average weekly wage may not include "any similar advantage or fringe benefit not specifically enumerated in this subsection (19)."
In City of Lamar v. Koehn, 968 P.2d 112 (Colo.App. 1998), the court interpreted the "similar advantage" language and concluded that the value of a claimant's accrued sick leave and vacation leave should be excluded from the average weekly wage. The court held that unless a fringe benefit has a reasonable, present-day, cash equivalent-value, and the claimant has a reasonable expectation of receiving the benefit under appropriate reasonable circumstances, the benefit is not to be to be included in the claimant's average weekly wage. In City of Lamar, the vacation and sick leave were not considered to be cash-equivalents because they were subject to forfeiture if not used within specified periods of time.
We do not believe that "banked hours" can be considered cash-equivalents because the claimant would never have the opportunity to use them if he remained employed for one hundred hours per month, and there is no evidence that he could redeem them for cash in the event he resigned from the union or retired. Consequently, although the banked hours may have some value to the claimant, it is not type of value which may be included in the average weekly wage.
IT IS THEREFORE ORDERED that the ALJ's order dated May 6, 1998, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
_______________________________ David Cain
_______________________________ Bill Whitacre
NOTICE
This Order is final unless an action to modify or vacate the Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, Colorado 80203, by filing a petition to review with the court, with service of a copy of the petition upon the Industrial Claim Appeals Office and all other parties, within twenty (20) days after the date the Order was mailed, pursuant to §§ 8-43-301(10) and 307, C.R.S. 1998.
Copies of this decision were mailed February 25, 1999 to the following parties:
Eugene E. Martinez, 18200 West 3rd Avenue, #1, Golden, CO 80401
Koenig, Inc., 3518 Larimer Street, Denver, CO 80205
Commercial Casualty Insurance Co., PO Box 6597, Englewood, CO 80155
Steven H. Gurwin, Esq., 1777 S. Harrison Street, Suite 906, Denver, CO 80210 (For Claimant)
Royce W. Mueller, Esq., Harvey D. Flewelling, Esq., 5353 W. Dartmouth Avenue, Suite 400, Denver, CO 80227 (For Respondents)
BY: ________________