By Philip Stittleburg

Nov 1, 2005 12:00 PM

When workers sustain job-related injuries, they usually are compensated pursuant to the workers' compensation laws of their state. In most cases, the formula for determining the applicable benefit is pretty straightforward, being based on their earnings for the job. However, volunteer firefighters present a special case. In many instances, they earn little or nothing for performing their firefighting duties but do earn incomes from their “regular” jobs. Determining the appropriate benefit rate depends on how income is calculated — not always a simple task. A Kentucky workers' compensation case illustrates the difficulties that can arise.

Gavin Ellis began serving as an uncompensated EMT and volunteer firefighter with the Highland Heights (Ky.) Volunteer Fire Department in 1999. Unfortunately, on April 9, 2000, at the age of 24, he was injured while participating in a training exercise involving a basement fire. While he was standing on the stairwell feeding hose, the flames became very intense. An order was given to clear the area, but the basement door wouldn't open, causing him to fear for a time that he would be trapped and die. Although he was able to escape through a broken window, he fell about 7 to 8 feet to the ground, landing on his breathing apparatus and injuring his neck. He was taken by ambulance to a burn center, where he was treated for three days before being released for two or three weeks of in-home treatment.

At the time of his injuries, Ellis held two undergraduate degrees and was pursuing an MBA. He also was a licensed stockbroker working for Fidelity Employer Services Co., where he had been employed since 1998. His work involved talking to customers on the telephone and operating a computer at the company's call center.
Ellis saw a number of medical professionals after his injury. On Aug. 2, 2000, he consulted with Dr. Marcom, a chiropractor, who reported that Ellis had a mild reversal of the lordosis of the cervical spine and assigned a 5% impairment. He noted that Ellis described the physical requirements of his usual work as sitting at a computer and using a telephone, obviously referring to Ellis's job with Fidelity. He imposed no work restrictions and indicated that Ellis retained the physical capacity to return to the type of work performed at the time of injury.

On Oct. 9, 2000, Ellis consulted with Dr. Tangbald, a psychiatrist. Tangbald diagnosed Ellis with post-traumatic stress disorder and prescribed psychotropic medication. A week later, a licensed clinical social worker who was associated with Tangbald began providing psychotherapy. As of Aug. 14, 2001, Tangbald continued to treat Ellis with medication for post-traumatic stress disorder.

On April 17, 2002, Ellis consulted with Dr. Kagan, who reported that Ellis had sustained second-degree burns over 2% of his body. Kagan assigned a 1% impairment and imposed no work restrictions. He further stated that Ellis had the physical capacity to return to the type of work he had performed at the time of the injury. Although Kagan later indicated that Ellis had not described the physical requirements of his work, Kagan listed Ellis's job title as “firefighter.”

On April 19, 2002, Dr. Parsons, a psychologist, examined Ellis. Parsons reported that Ellis continued to suffer from post-traumatic stress disorder and assigned a 25% impairment. In his opinion, the condition would prevent Ellis from working as either a firefighter or an EMT.

On July 20, 2002, Dr. Cooley performed a psychiatric evaluation of Ellis on the employer's behalf. He likewise diagnosed post-traumatic stress disorder due to the work-related incident, but he concluded that it had resolved, causing no permanent impairment. He noted that Ellis had been weaned off medication after about a year due to its side effects. He also noted that Ellis was not currently in treatment, but that he would benefit from it. Although Cooley acknowledged that Ellis had made significant improvement, he thought it unlikely that Ellis would be able to pursue his passion for firefighting.

On Oct. 14, 2002, Larkin examined Ellis, once again on the employer's behalf. Larkin was of the opinion that Ellis had sustained a cervical thoracic neck strain that had resolved, although there was occasional muscle guarding. Larkin assigned a 5% impairment, imposed no work restrictions, and indicated that no further treatment was warranted at that time.

When Ellis filed his workers' compensation claim, he alleged that he had suffered a cervical injury, burns and a psychiatric condition. The employer contested his claim, and by the time a hearing was held, Ellis had returned to Fidelity and was earning more money than he had earned at the time of his injury. He still experienced stiffness and popping in his neck when turning his head from side to side, and he continued to have occasional flashbacks and difficulty sleeping. He stated that the psychological effects of the accident were the most problematic. He could not take hot showers or sit in a hot tub or sauna. He became nauseous from the smell of Dial soap, which had been used to scrub his skin during treatment of his burns. He did not think that he could return to firefighting.

The administrative law judge who presided at the claim hearing determined that Ellis had indeed sustained work-related physical and psychological injuries for which he was entitled to medical and temporary total disability benefits. Although the ALJ was convinced that Ellis had sustained a 6% impairment due to the burns and cervical injury, the ALJ noted that Ellis hadn't received psychological or psychiatric treatment for a year and thus determined that the psychiatric condition caused no impairment at the time of hearing.

Based on Ellis's earnings at Fidelity, the ALJ determined that his average weekly wage was $512.24 and that his permanent income benefits must be reduced by a factor of 0.5 under then-existing Kentucky law. Finally, the ALJ concluded that Ellis was not entitled to an enhanced award under Kentucky law because he retained the physical capacity to return to his regular employment at Fidelity.

According to the law in effect at the time that Ellis was injured, his income benefit would be enhanced by a factor of 1.5 if he did not “retain the physical capacity to return to the type of work that he performed at the time of injury.” Kentucky law further required an income benefit to be reduced by a factor of 0.5 if the worker had returned to work at a wage that equaled or exceeded the wage at the time of the injury. The ALJ held that the section requiring reduction of income benefit applied because Ellis had returned to his regular work at Fidelity. Ellis, on the other hand, argued that his inability to work as a volunteer firefighter due to his psychological injury also required the application of the subsection that would enhance his income benefit by a factor of 1.5.

Ellis appealed the ALJ's ruling, ultimately all the way to the Supreme Court of Kentucky, resulting in the case of Highland Heights Volunteer Fire Department v. Ellis, et al., 2004-SC-0420-WC, Supreme Court of Kentucky (2005). The court held that the purpose of awarding an income benefit under the then-existing version of the law was to compensate workers for a loss of wage-earning capacity due to industrial injury. For that reason, Kentucky law based the amount of a worker's benefit on the average weekly wage and the amount of occupational disability the injury caused. The court noted that the law generally does not cover individuals unless they are paid to work under a “contract of hire.” But an exception to Kentucky law provided that volunteer fire, police and emergency personnel were covered by the workers' compensation act as “deemed employees” of the political subdivision where the department for which they work is organized.

Kentucky law further provided that income benefits for injured workers “shall be based on the average weekly wage in their regular employment.” The court then reasoned that even though the income benefit of volunteer personnel who have no regular employment would be zero, it is apparent that the purpose of these provisions is to compensate those who do have regular employment for a loss of the ability to perform their regular work. The court then concluded that the work to be considered in determining Ellis's workers' compensation benefits was his regular work, from which his average weekly wage was derived.

The court then held that the ALJ's interpretation and application of the law was correct. There was no evidence that Ellis's injuries had any effect on his ability to return to his regular (non-firefighter, non-EMT) work. In fact, he earned a greater average weekly wage after he was injured; therefore, he was not entitled to an enhanced benefit. The court went on to state that because its ruling disposed of the case at this point, it was unnecessary for it to consider whether Kentucky law also permitted compensation for a loss of the psychological capacity to return to the type of work that was performed at the time of the injury.

This case leaves us some thoughts to ponder:
• Learn how the workers' compensation laws in your state apply to volunteer firefighters. Remember, each state makes its own laws.
• Consider carrying an insurance policy providing benefits to injured volunteer firefighters in addition to what the workers' compensation system provides.
• Appreciate the importance of gathering this information. Volunteer firefighters should be expected to donate their time and talents, not their livelihood.