Mont. high court: Retirees can lose workers’ comp

HELENA, Mont. — The Montana Supreme Court has upheld the constitutionality of a state law that allows insurance companies to cut off workers’ compensation payments for those suffering permanent total disability when the disabled party is eligible for Social Security retirement benefits.

The 5-2 ruling Tuesday said workers’ compensation benefits for permanently and totally disabled workers are meant to assist them for their “work life,” and not into retirement.

“While this may not always seem fair, it is not unconstitutional,” Justice William Leaphart wrote for the majority. “By acting to terminate benefits as it does, (the law) rationally advances the governmental purpose of providing wage-loss benefits that bear a reasonable relationship to actual wages lost.”

Officials with the Montana State Fund, which writes workers’ compensation insurance for about 27,000 businesses, said a decision in favor of the workers could have cost the fund as much as $300 million for current and future claims, leading to a rate increase.

State Fund President Laurence Hubbard said he was “quite relieved” with the decision.

“It brings some closure to an issue that we’ve all been concerned about for some time,” he said Tuesday. “This had a very large potential cost, not only to current insurance rates, but also for claims that remain open.”

Jim Hunt, who represented the injured workers challenging the law, said the court order ignores constitutional protections for aging, permanently disabled workers.

The lead plaintiff in the case is Catherine Satterlee, of Anaconda, who was a checker at Buttrey Food & Drug. She hurt her back in 1992 and was no longer able to work. Her workers’ compensation payments ended when she turned 65 in 1999. Two other permanently disabled workers — James Zenahlik, of Anaconda, and Joseph Foster, of Helena — also were plaintiffs in the case.

Their case also argued that those receiving permanent total disability payments who had not worked enough to qualify for Social Security should continue to receive workers’ compensation payments after retirement age.

“While we are mindful of this issue, we do not think it rises to the level of an absurdity so that we would be required to hold (the law) unconstitutional,” the court wrote.

Justices Brian Morris and James Nelson dissented.

“The court … employs a toothless analysis that permits the legislature to advance the perfectly legitimate task of protecting the economic viability of the workers’ compensation system through the illegitimate means of penalizing injured workers who have qualified for (Social Security),” Morris wrote. He said he could accept some coordination of benefits similar to how Montana law reduces workers’ compensation benefits by one-half of the amount of Social Security disability benefits a person receives.