NCCI's Court Case Update, Montana – January 2023

Barnhart v. Montana State Fund

On December 27, 2022, the Supreme Court of Montana, in Barnhart v. Montana State Fund, clarified the permanent partial disability (PPD) benefit rate calculation for employees with concurrent jobs, holding that the primary factor in determining the employee’s eligibility for PPD benefits is the actual wage loss.

In this case, an employee suffered a compensable injury while working in one of her two jobs. Two years later, her physician determined that she had reached Maximum Medical Improvement (MMI) and that because of her permanent impairment, she could return to work at only one of her jobs. The employee received PPD benefits for the injury, but she contended that the benefit rate was miscalculated because it only considered wages from the job she was precluded from performing and did not include wages from both jobs. The Workers’ Compensation Court (WCC) agreed with the employee and concluded that the employee was entitled to have both jobs included in the PPD indemnity benefit rate calculation.

On appeal, the state’s supreme court overturned the decision of the WCC. The court, in its decision, noted that the primary factor in determining the employee’s eligibility for PPD benefits is actual wage loss, which must be viewed in light of the policy considerations stated in Montana statute 39-71-105(1), which provides that wage-loss benefits are not intended to make an injured worker whole, but to provide assistance to the worker at a reasonable cost to the employer and that the wage-loss benefit should bear a reasonable relationship to actual wages lost. The court’s analysis then turned to Montana statute 39-71-116(1)—which defines “actual wage loss” as “the wages that a worker earns or is qualified to earn after the worker reaches maximum healing are less than the actual wages the worker received at the time of the injury.”

Relying on these two statutes, the supreme court concluded that the employee’s actual wage loss is limited to the average weekly wage for the job she was not able to return to after reaching MMI and that the PPD indemnity benefit rate should not be aggregated from both of her time of injury concurrent employments.

For more information on other cases monitored by NCCI’s Legal Division, visit previous Court Case Updates and Court Case Insights, under the Legal section of INSIGHTS on ncci.com.

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