A maximum earner in 2010 has 10 weeks of temporary total disability. What is the reserve amount for indemnity?

A maximum earner in 2010 has 10 weeks of temporary total disability. What is the reserve amount for indemnity?

• A. $8000
• B. $15000
• C. $9866.90
• D. $98669.00

Answer: (C)

Temporary total disability indemnity reserves are calculated as the number of weeks of indemnity times the weekly indemnity rate. The weekly rate is two-thirds of the employee’s average weekly wage, limited by the maximum weekly benefit allowed in the year. For a maximum earner in 2010, the maximum weekly indemnity is $986.69. Over 10 weeks, the reserve would be 10 × 986.69 = 9,866.90. Therefore, the correct reserve amount is 9,866.90.

Temporary total disability indemnity reserves are calculated as the number of weeks of indemnity times the weekly indemnity rate. The weekly rate is two-thirds of the employee’s average weekly wage, limited by the maximum weekly benefit allowed in the year. For a maximum earner in 2010, the maximum weekly indemnity is $986.69. Over 10 weeks, the reserve would be 10 × 986.69 = 9,866.90. Therefore, the correct reserve amount is 9,866.90.