EEOICPA Part B/E Benefits Offset Worksheet
(For internal DEEOIC use only)
1. Gross Settlement/Final Judgment Amount.......$__________________
2. Was Line 1 paid to one party (see Instructions, Step 2)?...Y / N
a. If no, go to either Step 3 or Step 4
b. If yes, enter amount of Line 1 that is for
damages to real/personal property.......$__________________
c. Then enter amount of Line 1 that is for
medical treatment before filing date....$__________________
d. Subtract Lines 2b and 2c from Line 1 and
enter balance here. Go to Step 5.......$__________________
3. Allocation Between Parties Provided by Judge or Jury:
a. To employee for injuries due to covered
exposure to toxic substance.............$__________________
b. To employee for damages to real/personal
property (if any).......................$__________________
c. To employee for medical treatment before
filing date (if any)....................$__________________
d. To other party(s).......................$__________________
4. CE Allocation Between Parties (all other cases):
a. Standard allocation for living employee
is 75% of Line 2d. Enter result here and
go to Step 4c...........................$__________________
b. Standard allocation for deceased employee
is 50% of Line 2d. Enter result here and
go to Step 4c...........................$__________________
c. Good cause shown for different allocation?............Y / N
d. If yes, allocation for living/deceased
employee is ____% of Line 2d. Enter dollar
5. Allowable Deductions From Payment:
a. Costs of Suit (see Instruction Step 5)..$__________________
Divide costs by gross payment to determine
costs percentage (Line 5a/Line 1)...................._____%
b. Multiply Line 2d, 3a, 4a, 4b or 4d (one only)
by the costs percentage. Enter here....$__________________
c. Attorney Fees...........................$__________________
Divide attorney fees by gross payment to
determine attorney fees percentage (Line 5c/Line 1).._____%
d. Multiply Line 2d, 3a, 4a, 4b or 4d (one only)
by the LESSER of attorney fees percentage
or 40%. Enter here.....................$__________________
e. Enter amount of Line 1 that was paid to
satisfy workers’ compensation lien of a
state authority or insurer (if any).....$__________________
6. Net Amount of Payment to be used for Offset:
a. Subtract Line 5b from Line 2d, 3a, 4a, 4b
or 4d, as appropriate. Enter balance
b. Subtract Line 5d from Line 6a. Enter
c. Subtract amount on Line 5e (if any) from
Line 6b to arrive at amount of offset and
enter result here.......................$__________________
7. Offset of Part B/E Benefits, Surplus Payment:
a. Amount of unpaid lump-sum payment.......$__________________
b. If Line 7a is larger than Line 6c, subtract
Line 6c from Line 7a and enter balance due
c. If Line 7a is smaller than Line 6c, subtract
Line 7a from Line 6c and enter amount of surplus
to be recovered from future lump-sum payments and/or
medical benefits here............$__________________
* * * * * * * * * * *
INSTRUCTIONS FOR COMPLETING THE WORKSHEET
READ BEFORE YOU FILL OUT THE WORKSHEET: Lump-sum payments and/or medical benefits to be awarded for an occupational illness under Part B or a covered illness under Part E are only “offset” or reduced to reflect the amount of any settlement or final judgment payment for injuries due to exposure to the same toxic substance for which EEOICPA payments are payable. If the payment was for injuries due to exposure to some other toxic substance, no offset of EEOICPA benefits is required. For example, a Part B award for lung cancer due to exposure to radiation (or a resulting “automatic” Part E award for the same condition) is NOT offset to reflect a settlement or final judgment payment in a law suit alleging exposure to asbestos fibers. Also, if the tort complaint alleges exposure that is clearly outside the time frame and/or location of exposure awarded under the EEOICPA, offset is not required. As long as there is one exposure that would be compensable, offset is required even if the tort suit or EEOICPA claim has several other different exposures. In order to determine whether offset will be necessary, the CE must examine the complaint to see what alleged exposure is identified as causing the alleged injuries.
You do not have to fill out the Worksheet if the employee or his/her survivor(s) has had their workers’ compensation benefits, or a RECA section 4 or 5 award, or a prior award of EEOICPA Part B/E benefits offset to reflect the full amount of a settlement or final judgment payment. However, if the reduction of those prior benefits was not enough to fully offset the payment, leaving a surplus payment still requiring an offset, enter the dollar amount of the surplus payment on Line 6c and complete the remainder of the Worksheet. You do not have to complete the entire Worksheet if you are only offsetting a claimant’s Part B/E lump-sum award or future medical benefits to reflect a surplus payment.
Step 1 – Putting a Value on a Settlement or Final Judgment.
Settlements or final judgments can include both an initial cash payment and future payments. The “value” of future payments is their present value, not the sum of the future payments (which will always be more than the present value of the future payments). If the future payments are made through an annuity, the CE may accept the purchase price of the annuity as the present value of the future payments. Do not attempt to put a value on a future payment that is contingent upon an event that has not yet taken place, such as the diagnosis of another medical condition. This particular type of future payment cannot be valued and is not to be included in the amount listed on Line 1 of the Worksheet. However, if the event in question has occurred by the time a later award under Part E becomes payable, any payment for that event must be added to the amount entered on Line 1, and the Worksheet must be completed again.
Any payment on a final judgment or settlement relating to the aggravation, by medical malpractice, of illnesses caused by the same exposure for which EEOICPA benefits are payable is an amount that must be reported to OWCP and included in the amount listed on Line 1. If this amount constitutes anything other than a reimbursement for medical treatment provided to the employee before he/she filed a claim for EEOICPA benefits, do not complete the Worksheet and refer the case to the National Office.
Some law suits, such as those related to exposure to asbestos, may involve multiple defendants making multiple settlement or final judgment payments. EEOICPA benefits currently payable will be reduced to reflect the total of only those settlement or final judgment payments received. Payments received at a later date may be offset from any future EEOICPA award of lump-sum benefits or payment of medical benefits, at which time another Worksheet must be completed, listing on Line 1 the total of the payments received since the completion of the prior Worksheet.
Step 2 – Single Recoveries and Initial Deductions.
A payment on a final judgment or settlement is a joint recovery only if it was paid to multiple parties. Joint recoveries are “allocated” or split up between multiple parties at either Step 3 or 4 of the Worksheet. If only one party received a payment, fill in the appropriate amounts for the single recovery on Lines 2b, 2c and 2d of the Worksheet IF THE PARTY WHO RECEIVED THE PAYMENT WAS THE EMPLOYEE, OR ANOTHER PERSON WITHOUT THEIR OWN CAUSE OF ACTION IN THE COMPLAINT. It is rare that a payment will be made to a person who does not have their own cause of action in the complaint. However, if an unmarried employee files suit and then dies, a court may appoint another person to take charge of the suit. While this person will not have their own cause of action, he will be the proxy for the dead employee.
If someone other than these two specific parties received the entire payment, and the employee was alive at the time it was paid, no offset is needed and the Worksheet does not need to be completed. For example, if an employee and his or her spouse were both plaintiffs with causes of action in a case they brought together and they both signed releases to settle their case, but only the spouse received a payment and the employee was alive at that time, no offset is required.
Rarely, a complaint alleging injuries due to exposure to a toxic substance may contain causes of action for unrelated damages to either personal property or real property of the plaintiff(s). If this occurs, and the payment listed on Line 1 includes an amount for damages to personal or real property, enter this amount on Line 2b. If you have a question about whether or not the complaint contains a cause of action of this sort, contact the National Office.
Since EEOICPA benefits are not offset to reflect the amount of any payment for medical treatment provided before the date an employee files a claim, enter the amount of the payment listed on Line 1 that is explicitly designated as being for this medical treatment on Line 2c, even if the payment was made directly to the provider. Also, if you included a malpractice payment in the amount on Line 1, and it only constitutes a reimbursement for medical treatment provided before the employee filed a claim, include the malpractice payment in the amount listed on Line 2c and complete the remainder of the Worksheet.
Step 3 – Judge/Jury Allocation of Joint Recoveries.
If a judge or jury specifies how to allocate a joint recovery between multiple parties, the CE MUST use that allocation to fill in the appropriate blanks in Step 3, as appropriate. In these situations, the CE must obtain a copy of either the judge’s order or the jury’s verdict making the allocation. If the judge or jury allocates the joint recovery among particular causes of action brought by the plaintiffs in the law suit, fill in the appropriate blanks on Lines 3a through Line 3d, following the guidance provided above for Step 2.
Step 4 – All Other Allocations for Living/Deceased Employees.
In all other situations involving a joint recovery, the CE will automatically allocate 75% of the amount on Line 2d to the employee for the occupational illness/covered illness (allocating the remaining 25% to the other parties to the litigation) if the employee was alive at the time the payment was made, then enters this amount on Line 4a of the Worksheet. If the employee died before a payment was made, the CE automatically allocates 50% of the amount on Line 2d for the employee’s occupational illness/covered illness, and enters this amount on Line 4b.
If the claimant wants to allocate less than the standard percentages to the recovery of the employee for the occupational illness/covered illness, and thereby reduce the amount by which the EEOICPA award must be offset, the claimant must submit evidence and legal argument to the CE that shows that a lower percentage is appropriate. This evidence MUST show that:
A. State law in the relevant state provides a cause of action for loss of consortium (tort claim based on deprivation of a spousal or parental relationship due to injuries) or wrongful death for the family member to whom the recovery is attributed, and
B. A cause of action for loss of consortium or wrongful death was actually asserted by that family member, either in the same action or in separate actions.
To make these required showings, the claimant must submit a copy of the complaint filed on behalf of the spouse and/or children, and citations to appropriate state case law or statutes. If the CE determines that the evidence as noted above support allocating a lower percentage to the employee, the CE circles “Y” at Line 4c and enters the lower percentage for the employee in the appropriate blank in Line 4d. Using this percentage, the CE calculates the new allocation for the employee and enters this amount on Line 4d. Any situations where this matter is unclear should be referred to the National Office for guidance.
In the event there are multiple payments over time constituting joint recoveries by an employee and other plaintiffs, and the employee dies after receiving at least one payment (but before all of the payments are made), the CE calculates the amount of the offset of an EEOICPA award by using two Worksheets. Using two Worksheets enables the CE to allocate the appropriate percentage of the joint recoveries to the employee for the occupational illness/covered illness. The CE completes one Worksheet for payments received prior to the employee’s death (entering that amount on Line 1), and another Worksheet for payments received after the employee’s death.
Step 5 – Allowable Deductions from a Payment. Costs that may be listed on Line 5a of the Worksheet are reasonable out-of-pocket costs and expenses involved in bringing a lawsuit, but do not include fees paid to co-counsel or normal office expenses like secretary or paralegal services or in-house record copying costs. Before the CE may approve the deduction of any costs, the costs MUST be itemized so the nature of each individual cost may be evaluated by the CE to ensure that it is allowable. Costs that are allowable include filing fees, travel expenses, record copy services, witness fees, court reporter costs for transcripts of hearings and depositions, postage, and long distance telephone calls. Once the allowable costs have been calculated and listed on Line 5a, the CE must divide these costs by the amount of the gross payment listed on Line 1 of the Worksheet to determine the percentage of the payment that is represented by the allowable costs, rounded up to the next highest tenth. For example, 26.121% is rounded up to 26.2%. Once this rounded percentage is calculated, the CE must multiply it by the amount listed on Line 2d (if the only party paid was the employee, or another person without their own cause of action in the complaint), or the amount listed on Line 3a, 4a, 4b or 4d (if multiple parties were paid) to calculate the amount of costs to deduct. The CE then enters the result on Line 5b.
Attorney fees submitted for consideration should be entered on Line 5c of the Worksheet. Using the same basic calculation method used for costs, the CE should divide Line 5c by Line 1 to determine the percentage of the gross payment that is represented by the attorney fees, rounded up to the next highest tenth. For example, 26.121% is rounded up to 26.2%. Enter the rounded percentage in the space provided after Line 5c. In general, any fee that exceeds 40% will be considered unreasonable. To determine the amount of allowable attorney fees to be deducted, the CE must multiply the amount listed on Line 2d (if the only party paid was the employee, or another person without their own cause of action in the complaint), or the amount listed on Line 3a, 4a, 4b or 4d (if multiple parties were paid), by the LOWER of the attorney fees percentage that was entered in the space after Line 5c, or 40%, and enter the result on Line 5d. If the attorney fee percentage exceeds 40%, the CE should inform the claimant and allow an opportunity to establish that an attorney fee in excess of 40% is reasonable.
The circumstances which should be taken into account in determining the reasonableness of attorney fees for the purpose of offsetting EEOICPA benefits include, among other things, prevailing local fees, cases of similar complexity and the amount of the gross settlement or final judgment at issue. Determinations of the CE in these areas are made for the sole purpose of administering § 7385 of the EEOICPA and do not have any effect on a fee agreement between an attorney and client or any other matter not involving the application of the Act.
Sometimes after a settlement or final judgment payment is received by an attorney, but before the attorney distributes that payment to his or her clients, the attorney has to pay out a portion of the payment to satisfy the lien of a state workers’ compensation system or an insurer for amounts paid by the system or insurer for the employee’s medical condition. When this has occurred, the CE enters the amount of the payment that was made to satisfy the lien on Line 5e of the Worksheet.
Step 6 – Calculating the Amount of the Offset.
To calculate the amount by which EEOICPA benefits must be offset, the CE subtracts Line 5b from Line 2d, 3a, 4a, 4b or 4d, as appropriate, and enters the result on Line 6a. The CE then subtracts Line 5d from Line 6a, and enters the result on Line 6b. Finally, the CE subtracts the amount on Line 5e (if any) from Line 6b, and enters the result on Line 6c. This last amount is the amount by which the claimant’s Part B or E award must be offset.
Step 7 – Amount of Part B/E Benefits Due or Surplus Payment.
At Step 7 of the Worksheet, the CE determines either the net amount of EEOICPA benefits due the claimant, or the amount of the surplus payment remaining that must still be absorbed from either future Part E lump-sum payments, or future medical benefits under either Part B or Part E.