A Safeway employee breaks his leg in 2010 and has 10 weeks of TD. He is a max earner, recovers fully and has no permanent impairment. How should this claim be reserved for indemnity?

A Safeway employee breaks his leg in 2010 and has 10 weeks of TD. He is a max earner, recovers fully and has no permanent impairment. How should this claim be reserved for indemnity?

• A. $6000
• B. $7500
• C. $9900
• D. $16000

Answer: (D)

Temporary disability reserves in California are based on the number of weeks of TD and the weekly indemnity amount. The weekly indemnity is two-thirds of the employee’s average weekly wage, but it cannot exceed the state-established maximum weekly TD benefit. So for a max-earner, you use the cap. In this scenario, the employee has 10 weeks of TD and is at the maximum weekly benefit. Multiplying the maximum weekly TD benefit by 10 gives the total indemnity reserve. For 2010, the maximum weekly TD benefit was $1,600, so 10 weeks amounts to 16,000. Since there’s no permanent impairment, there’s no additional impairment reserve to add.

Temporary disability reserves in California are based on the number of weeks of TD and the weekly indemnity amount. The weekly indemnity is two-thirds of the employee’s average weekly wage, but it cannot exceed the state-established maximum weekly TD benefit. So for a max-earner, you use the cap.

In this scenario, the employee has 10 weeks of TD and is at the maximum weekly benefit. Multiplying the maximum weekly TD benefit by 10 gives the total indemnity reserve. For 2010, the maximum weekly TD benefit was $1,600, so 10 weeks amounts to 16,000. Since there’s no permanent impairment, there’s no additional impairment reserve to add.