The calculations for payment of the the workers compensation lien significantly differ if it is a State WC lien under FSA 440.39(3)(a) or under the Federal Employees’ Compensation Act (FECA). But what about when calculating Defense Base Act (DBA) liens – which is merely an extension of the Federal Worker’s Compensation program? Below is a precursory analysis of how liens are calculated and based on same, it’s clear Florida and DBA lien calculations are not nearly as complex as FECA calculations.
Florida Worker’s Compensation Lien Calculation:
Under Florida’s 3rd party lien law, Worker’s Compensation (WC) carriers are entitled to recover 100% of past and future payments, but…. the same law reduces this recovery by the carrier’s proportionate share of the injured worker’s attorney fees/costs and any reductions considering the injured workers own negligence in the settlement. It is very important the injured person’s attorney argue the injured worker did not get the full value of the case because he was partly at fault.
When a WC carrier has provided benefits to the injured worker, the Carrier has a lien up to the full amount it has paid. The lien may be waived if the injured person gives up his right to future benefits. When it is not waived, the amount the injured worker must pay back is determined by the Manfredo Formula. See Manfredo v. Employer’s Casualty Insurance Company, 560 So.2d 1162 (Fla 1990). The formula, as set forth in the statute, can be difficult to understand. The formula has not changed since I posted on this in 2013. However, the easiest way to understand the “Manfredo Formula” is by example:
The case of Manfredo v. Employer’s Casualty Ins. Co., 560 So.2d 1162 (Fla. 1990) provides for the formula to use for the Florida state wc lien repayment. Assume the third party settlement of $275,000.00 is divided by our client’s net tort recovery, which is $127,124.80. This amount is arrived at by deducting our one-third for attorney’s fees and costs along with the outstanding medical bills as our client had surgeries outside of workers’ compensation. Divide $127,124.80. that he will receive over the full value of the case, $275,000.00, equals a 46% payback. That 46% payback times the wc lien of $20,359.38 calls for us to pay the lien holder $9,441.57.
Now is this formula used when calculating FECA liens or DBA liens? The short answer is NO