By: Samantha E. Hahn 
Director and Chief Judge of the New Jersey Division of Workers’ Compensation, Hon. Russell Wojtenko, Jr., issued a memorandum eliminating the Division’s prior policy allowing medical monitoring and coverage settlements as a stand-alone form of workers’ compensation benefit for public employees who receive accidental disability pensions (“ADP”).
When a public employee simultaneously receives a state accidental and disability pension and workers’ compensation permanent disability, the state pension is reduced dollar for dollar by the amount of the workers’ compensation benefits paid. Resultantly, the injured employee receives no extra financial benefit from the workers’ compensation award. When this situation arose, the Division of Workers’ Compensation (“DWC”) permitted the parties to enter into a medical monitoring and coverage settlement. A medical monitoring and coverage settlement permitted the employee to receive lifelong medical treatment for the work-related injury without receiving any payment of permanent disability benefits. The practice saved employers and insurance carriers a significant amount of money, and it provided the injured worker a guarantee of lifelong medical coverage.
The use of monitoring and coverage settlements came under investigation by the Office of the State Comptroller (“OSC”). The OSC ultimately concluded that the policy was inconsistent with the New Jersey Workers’ Compensation Act; eliminated the financial incentive for injured employees to pursue a workers’ compensation judgment when they receive an ADP; shifted the insurance companies’ financial obligations to the State and its pension funds; and undermined the State’s policy on double recoveries. It recommended that the Department of Labor coordinate with the NJ Division of Pensions and Benefits to adopt regulations to protect the pension funds’ interests.
Following the OSC’s report and recommendations, the DWC directed the State’s workers’ compensation judges to stop approving medical monitoring and coverage settlements. Further, the DWC now requires both workers’ compensation petitioners and respondents to notify the Division of Pensions and Benefits that a workers’ compensation claim is pending when the injured worker receives an ADP.
The DWC’s policy change regarding medical monitoring and coverage settlements formally ends a long-standing practice that was advantageous to both injured workers and their carriers, and it will certainly increase the exposure of carriers insuring public employees going forward. Should you have a question or concern as to how this policy may impact a pending workers compensation matter, feel free to contact a member of the Firms Workers’ Compensation Department here.
 Samantha E. Hahn, Esq. is a Shareholder in GRSLBG&B’s Workers’ Compensation Department. She defends employers, insurers, and third party administrators against workers’ compensation claims in New Jersey and New York. Samantha can be reached at SHahn@grsl.com.