Opinion
W.C. Nos. 4-559-482 4-483-695.
July 13, 2005.
FINAL ORDER
The claimant seeks review of an order of Administrative Law Judge Klein (ALJ) dated February 23, 2005, insofar as the ALJ denied his request to include the cost of replacement health insurance in the average weekly wage (AWW). We affirm.
The essential facts are undisputed. The claimant suffered a disabling industrial injury while employed by Sears Roebuck Company (Sears). At the time of the injury, the employer provided group health insurance for the claimant and his family. In 2001 when the claimant was laid off, Sears terminated the group health insurance but offered the claimant COBRA replacement insurance, which the claimant did not purchase. The claimant later became employed at McKee Medical Center, where his wage included group health insurance.
Due to a worsening of the industrial injury, the claimant became temporarily disabled in September 2003. The claimant was then discharged from McKee in February 2004 and offered COBRA replacement health insurance. The claimant did not purchase the COBRA insurance. However, in August 2004 the claimant purchased group health insurance for himself and his family through his wife's employment.
Relying on Midboe v. Industrial Claim Appeals Office, 88 P.3d 643 (Colo.App. 2003), the ALJ determined that under § 8-40-201(19)(b), C.R.S. 2004, the replacement cost of health insurance is not a fringe benefit includable in the AWW, unless the claimant 1) continues the employer provided coverage pursuant to COBRA or section 10-16-108 and 2) when COBRA coverage ends, "converts" that coverage to a similar or lesser coverage. Because the claimant did not purchase the COBRA coverage offered by Sears or McKee, the ALJ refused to include the replacement cost of health insurance in the claimant's AWW.
On review the claimant contends § 8-40-201(19)(b) does not require proof the claimant has actually purchased replacement coverage. In support the claimant cites Humane Society of the Pikes Peak Region v. Industrial Claim Appeals Office, 26 P.3d 546 (Colo.App. 2001). The claimant also contends that Midboe is limited to facts where the injured worker remains employed and fringe benefits are not terminated. We reject these arguments.
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."
In Schelly v. Industrial Claim Appeals Office, 961 P.2d 547 (Colo.App. 1997), a panel of the court reasoned that the statute was enacted to insure that disabled claimants would have access to funds for the purchase of `similar or lesser' health insurance when the employer no longer pays part of the premium for such insurance. However, the court expressly refused to consider whether the cost of insurance is included in the AWW if the injured worker does not actually purchase substitute insurance.
In Midboe v. Industrial Claim Appeals Office, supra, the issue was whether the AWW includes the premium paid by the claimant for group health insurance where the claimant remains employed and the employer continues to pay a portion of the insurance. The court held that under these circumstances, the claimant's wages were not compromised by excluding the cost of health insurance from the AWW. The Midboe court reasoned that the terms "continuing" and "conversion" are specialized terms of art derived from the Consolidated Omnibus Budget and Reconciliation Act of 1985 currently codified at § 10-16-108 C.R.S. 2004. Based on the special meaning of the terms "continue" and "conversion" the Midboe court concluded that § 8-40-201(19)(b) allows the AWW to include the cost of health insurance
"only when a claimant has `continued' the employer's coverage at his or her own cost pursuant to COBRA or § 10-16-108, and thereafter, when that coverage ends and the claimant has converted to other coverage." 88 P.3d at 646.
We and the ALJ are bound by published decisions of the court. C.A.R. 35(f). Accordingly, in Marsh v. Sunnyrest Health Care, W.C. Nos. 4-536-309; 4-536-314 (April 23, 2004), and Ashmore v. Nu Horizon Window Systems, Inc., W.C. No. 4-593-027 (August 25, 2004), we read Midboe to mean that once the issue of "continuation" arises after termination of the employer's plan, the claimant must comply with COBRA by electing and paying for coverage or, as was the case in Midboe, or there is no "cost" of "continuation."
Here, it is undisputed the claimant did not "continue" the employer's coverage by purchasing COBRA insurance from Sears or McKee. Therefore, we agree with the ALJ that Midboe compels a conclusion there was no cost of "continuation" to be added to the AWW. Moreover, because Midboe holds that the claimant must "continue" and "convert" the employer provided coverage, the fact the claimant bought coverage at a lesser cost in August 2004 is insufficient to entitled the claimant to an increase in the AWW.
In reaching our conclusions, we recognize that in Humane Society of the Pikes Peak Region v. Industrial Claim Appeals Office, supra, the court stated, "the statute does not require proof that the claimant has actually purchased coverage" in order for health insurance to be included in the AWW. However, in Marsh we concluded that this statement constituted dictum. We reached this conclusion because, as the Humane Society court itself remarked, the record in that case contained no evidence on whether the claimant had or hadn't purchased insurance, and the court was merely venturing an opinion on the result if the record had shown the claimant did not purchase insurance. As it was, the record was silent on the matter and the court was unwilling to assume the claimant had not purchased insurance. We adhere to our prior conclusion.
Moreover, the Humane Society decision was rendered before Midboe. The Humane Society court could not have foreseen these special time-sensitive meanings when it stated, "when and where to purchase coverage is a decision for the claimant." Cf. Gonzales v. City of Fort Collins, W.C. No. 4-365-220 (November 20, 2003), aff'd., Gonzales v. Industrial Claim Appeals Office, (Colo.App. No. 03CA2381, July 22, 2004) (not selected for publication) (cost of family health coverage, which claimant carried at time of injury, not included in AWW because family not enrolled at time health insurance was terminated as required by COBRA, and because General Assembly was presumably aware when it enacted the statute that inclusion of such coverage in AWW would be dependent on enrollment at the time of termination).
As stated in Ashmore, we recognize that in some cases Midboe imposes a hardship on claimants who are unable to pay the cost of COBRA coverage but may be able to locate a cheaper policy later. However, we adhere to our conclusion that this problem is a natural, and arguably unfortunate, consequence of the statutory scheme selected by the legislature as a "compromise" of the competing arguments concerning the value of health insurance when calculating the AWW.
Finally, the claimant argues this interpretation of the statute is a violation of due process and equal protection guarantees in the United States and Colorado constitutions. However, we understand the Midboe decision to compel the result reached here, and we lack jurisdiction to declare the court's interpretation of a statute to be unconstitutional. Celebrity Custom Builders v. Industrial Claim Appeals Office, 916 P.2d 539 (Colo.App. 1995); Crider v. Speedy Heavy Hauling, Inc., W.C. No. 4-606-915 (October 12, 2004).
IT IS THEREFORE ORDERED that the ALJ's order dated February 23, 2005, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________ Kathy E. Dean
____________________ Curt Kriksciun
Kevin L. Stegman, Loveland, CO, Sears Roebuck Company, Thornton, CO, Liberty Mutual Fire Insurance, Irving, TX, W.M. Busch, Jr., Esq., Loveland, CO, (For Claimant).
David G. Kroll, Esq., Denver, CO, (For Respondents).