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Understanding Non-economic Loss and Permanent Impairment

By Peggy King on November 2, 2012

Overview

Workers who have a work-related permanent impairment are eligible for Non-Economic Loss (NEL) benefits. This award recognizes the permanent effects of a workplace injury on a worker's life outside of work. This award is not meant to compensate for monetary loss (like wages) caused by the workplace injury; rather, it is meant to compensate for general loss of functioning caused by a permanent injury.

Permanent Impairment

A permanent impairment may be physical, functional or psychological. In order to determine the degree of permanent impairment, the Board must first determine whether a worker has achieved maximum medical recovery (MMR). Maximum medical recovery is achieved when a worker is no longer showing any significant improvement in his or her medical impairment, and it is not likely that any improvements will occur in the future.

In order to make a determination of MMR, decision-makers monitor and assess the health information contained in workers' claim files. A worker may achieve MMR before the usual recovery time elapses, and may still be receiving medical treatment, even though MMR has been reached. In order to determine when MMR has been reached, decision-makers must consider whether recent clinical reports indicate any change in the worker's impairment and whether the worker is, or will be, receiving any treatment which is likely to improve the worker's impairment.

In order to consider these factors, decision-makers will consult clinical reports, specialist reports, agency reports, information from the worker, external scientific guidelines and, if required, the opinion of a Board clinical staff member. Where a claim involves more than one permanent impairment, a worker will reach MMR only when significant improvement is unlikely in all of those impairments. Once MMR is identified and a permanent impairment exists, a worker becomes eligible for Non-Economic Loss (NEL) benefits.

NEL Determination

The amount of NEL awarded to a worker depends on the seriousness of the worker's injury.

NEL benefits are calculated as follows.

A base benefit is adjusted for your age by:

  • adding an amount every year under 45 years old you were at the time of the injury; or
  • subtracting an amount for every year over 45 years old you were at the time of injury.

There are maximum and minimum base amounts.

  • Your impairment is expressed as a percentage, based on the NEL Clinical Specialist's determination or the examining doctor's report. The more severe your impairment, the greater the percentage
  • After the base NEL amount is adjusted for your age and for inflation, it is multiplied by your percentage impairment. The result is your NEL benefit.

The percentage of permanent impairment is based on the American Medical Association's Guides to the Evaluation of Permanent Impairment, 3rd edition (revised). Where a specific impairment is not referred to in the Guide, the WSIB may create its own rating schedule by using similar impairments listed in the Guide. In order to determine the seriousness of a worker's permanent impairment, the WSIB will use a worker's claims file. If this provides inadequate information, the worker may be referred to a Regional Evaluation Centre or a private clinician.

Changes to the NEL Policy

As of March 30, 2011, all NEL benefits are to be paid out in a lump sum. However, if the NEL award exceeds a threshold amount ($12,745.17 in 2012), the worker may elect to receive the benefits as a monthly payment, provided that she or he does so within 30 days of being notified of the amount of the NEL award. The choice of whether to accept a lump sum or to receive monthly payments is permanent and cannot later be changed. Previously, any amount less than the threshold amount was to be paid in a lump sum, while NEL awards greater than this were to be paid in monthly installments, unless the worker elected, within 30 days, to receive it as a lump sum.

The WSIB has also redesigned its process for evaluating a NEL award. Under the current process, a NEL Clinical Specialist first reviews the medical information in the worker's claim file. If this information is adequate, the Clinical Specialist may proceed to determine the NEL entitlement. If more information is required, the worker will be referred for an external NEL medical assessment, either at a Regional Evaluation Centre, or a medical office. Under this process, the majority of physicians trained in conducting NEL assessments will do so from Regional Evaluation Centres across the province. These changes are meant to streamline the NEL evaluation process, to provide more timely decisions.

Deducting Pre-existing Condition Even When Not Measurable

Previously the WSIB had the authority to offset a pre-existing condition from the current NEL quantum based on a percentage of impairment. This process was usually completed in files where a worker had a prior NEL for the same body part, or a Permanent Disability (PD) rating. This meant that in files where a worker may have had a pre-existing degenerative condition that was not objectively measurable, a percentage of the award would not have been offset.

More recently, the NEL Adjudication Branch is applying Policy 18-05-05 (Effect of a Pre-Existing Condition), and offsetting percentages of awards even where the condition was not previously objectively rated. The NEL Adjudicators are estimating the effect on the current impairment, and offsetting the percentage to calculate the final award. It is important to review your NEL award to determine whether an underlying asymptomatic condition is being offset from your award, as it may not be reflective of how the condition is actually affecting you.

It is important to remember that you can object if you do not agree with the amount of the NEL or the percentage used in the award. You can take these issues to the Appeals Branch for further review.