of Appeals No. 18CA1990 Industrial Claim Appeals Office of
the State of Colorado WC No. 4-961-870.
Turner, Roepke & Mueller, LLC, Robert W. Turner,
Greenwood Village, Colorado, for Petitioner
Appearance for Respondent Industrial Claim Appeals Office
Ritsema & Lyon, P.C., Alana S. McKenna, M. Holly Colvin
Herring, Denver, Colorado, for Respondent United Airlines
1 Claimant, Jason Baum, appeals the final order of the
Industrial Claims Appeal Office affirming the summary
judgment of the director of the Division of Workers'
Compensation in favor of self-insured employer, United
2 This workers' compensation action calls on us to
clarify the boundary between where an employer can and cannot
take credit for having an approved wage continuation plan
under section 8-42-124, C.R.S. 2018. Here, UAL paid Baum full
pay under its wage continuation plan after he sustained an
admitted work-related injury, but UAL also claimed a credit
on its final admission of liability (FAL) for the comparable
temporary total disability (TTD) benefits it would have
otherwise been statutorily required to pay Baum. This credit
increased Baum's reported TTD benefits, pushing them over
the statutory cap set by section 8-42-107.5, C.R.S. 2018.
Baum challenged UAL's right to take the credit. But both
the director of the Division of Workers' Compensation
(Division) and the Industrial Claim Appeals Office (Panel)
held that UAL acted within its rights in taking the credit.
Because we, too, conclude that UAL was entitled to take the
credit, we affirm.
3 Baum sustained admitted, work-related injuries on September
7, 2014. His injuries caused him to be temporarily totally
disabled and off work until July 2016. He was placed at
maximum medical improvement (MMI) with a permanent impairment
rating of 2% of the whole person on September 25, 2016.
4 For the first nine months after his injury - until June 17,
2015 - UAL paid Baum his full salary under its wage
continuation plan. After Baum's earned benefits under the
wage continuation plan ran out in June 2015, UAL paid him TTD
benefits pursuant to section 8-42-105, C.R.S. 2018, until
July 29, 2016. Unlike the benefits Baum received under
UAL's wage continuation plan, the TTD benefits he
received from June 2015 to July 2016 were paid at the lower
statutorily mandated rate of two-thirds of Baum's average
weekly wage. See § 8-42-105.
5 In the FAL it filed after Baum reached MMI, UAL calculated
that it had overpaid Baum TTD benefits by
$1459.83. It also took the position that Baum was
not entitled to any compensation for his 2% whole person
permanent impairment because the calculated TTD payments
exceeded the statutory cap set by section 8-42-107.5 for
combined TTD and permanent partial disability (PPD) benefits.
UAL calculated this sum by adding the amount it had paid Baum
in TTD benefits from June 2015 to July 2016 ($48, 944.85) and
the amount it would have paid Baum in TTD benefits
from September 2014 to June 2015 ($33, 949.49) had it not
been paying him his full salary during those nine months
under its wage continuation plan. In other words, UAL took
credit on the FAL for TTD payments it would have made but for
its wage continuation plan. The calculated TTD benefits
totaled $82, 894.34, which exceeds the applicable statutory
cap of $81, 435.67 by $1458.67.
6 Baum objected to UAL's claim of an overpayment,
imposition of the statutory cap, and claimed credit for TTD
benefits he did not receive. He filed an application for
hearing, seeking TTD from the date of his injury until June
17, 2015, the day he exhausted his wage continuation
benefits, as well as full payment of the PPD benefits he
would otherwise receive for his 2% whole person impairment.
7 UAL filed a motion for summary judgment, arguing that its
wage continuation plan was valid and had been approved by the
director and in constant operation since 1973. It also argued
that because Baum received his full pay under the plan and
the plan "did not impair . . . [his] earned sick or
vacation benefits," it was expressly entitled to claim a
TTD credit by section 8-42-124(2)(a).
8 The director of the Division agreed. He rejected Baum's
contention that benefits paid under the wage continuation
plan were similar to vacation or sick leave. Instead, the
director concluded that because benefits under the wage
continuation plan could not be accessed at an employee's
discretion or for a purpose other than compensation for a
work-related injury - a UAL employee can tap benefits earned
under the wage continuation plan "only when they have
suffered an injury 'covered by the applicable state
workers' compensation law'" - the benefits were
not similar to vacation or sick leave. Therefore,
their accrual and exercise did not bar UAL from taking the
claimed TTD credit. The director further concluded that
because UAL properly claimed the credit, Baum's benefits
exceeded the statutory cap and he was not entitled to receive
any PPD benefits or TTD benefits for the period September 8,
2014, to June 17, 2015.
9 The Panel affirmed on review. It, too, rejected Baum's
argument that wage continuation benefits accrued under
UAL's plan are "similar" to vacation or sick
leave. Because it concluded that wage continuation benefits
are different from vacation and sick leave, UAL properly took
the credit for TTD benefits and Baum was not entitled to any
Wage Continuation Plans
10 To give context to how we address Baum's contentions,
a brief explanation of wage continuation plans authorized by
section 8-42-124 of the Workers' Compensation Act (Act)
is helpful. Although most injured workers receive TTD
benefits under the Act, it authorizes - and to some extent,
incentivizes - employers to adopt a plan that pays injured
workers more benefits than they would have received
in TTD benefits. In this regard, the Act states as follows:
Any employer . . . who, by separate agreement, working
agreement, contract of hire, or any other procedure,
continues to pay a sum in excess of the [TTD] benefits
prescribed by articles 40 to 47 of this title to any employee
temporarily disabled as a result of any injury arising out of
and in the course of such employee's employment and
has not charged the employee with any earned vacation leave,
sick leave, or other similar benefits shall be
reimbursed if insured by an insurance carrier or shall
take credit if self-insured to the extent of all moneys that
such employee may be eligible to receive as compensation or
benefits for temporary partial or temporary total
disability under the provisions of said articles,
subject to the approval of the director.
§ 8-42-124(2)(a) (emphasis added). As pertinent here,
the provision expressly permits an employer to establish a
plan that pays an injured worker unable to work because of a
temporarily disabling work injury more than the worker would
have received in TTD benefits under section 8-42-105.
11 The Act incentivizes employers to create such plans by
permitting the participating self-insured employers to
"take credit" on their admission forms for the
equivalent amount the employer would have paid in TTD or
temporary partial disability benefits if not for the
employer's wage continuation plan. § 8-42-124(2)(a).
Insured participating employers are entitled to a
reimbursement from the insurer of the equivalent TTD amount.
Id. However, if the employer "charge[s]"
the injured worker "with any earned vacation leave, sick
leave, or other similar benefits" during the
time of disability - in other words, if the employer makes
the worker use vacation time or sick time while unable to
work because of the work-related injury - then the employer
cannot take advantage of the credit on its admission
form or seek reimbursement from the insurer. See id.
12 With this framework in mind, we turn first to Baum's
constitutional challenges to section 8-42-124, followed by
the statutory interpretation issue previewed at the start of
13 Baum first argues that section 8-42-124 is
unconstitutional "on its face and as applied"
because the plan was approved by the director without the
opportunity for injured workers to challenge the plan in
court. He contends that the lack of "appellate
review" denied him his property interest in workers'
compensation benefits without due process. He further
contends that the absence of appellate review of approved
wage continuation plans renders the statute unconstitutional
on its face and violates the separation of powers in Article