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

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

• A. $6,000
• B. $7,500
• C. $9,900
• D. $16,000

Answer: (C)

Temporary total disability payments in California are two-thirds of the worker’s average weekly wage, capped at the state’s maximum weekly benefit. For a worker earning at the maximum, the indemnity per week hits the cap. In 2010 that maximum weekly indemnity was $990. With 10 weeks of TTD, the reserve for indemnity should be 10 × $990 = $9,900. Since there’s no permanent impairment, there’s no additional impairment reserve. So the indemnity reserve is $9,900.

Temporary total disability payments in California are two-thirds of the worker’s average weekly wage, capped at the state’s maximum weekly benefit. For a worker earning at the maximum, the indemnity per week hits the cap. In 2010 that maximum weekly indemnity was $990. With 10 weeks of TTD, the reserve for indemnity should be 10 × $990 = $9,900. Since there’s no permanent impairment, there’s no additional impairment reserve. So the indemnity reserve is $9,900.