24.29.2849    PAYMENT OF CLAIMS WHERE LIABILITY IS DISPUTED

(1) This rule is intended to balance the rights of a claimant to back-due benefits where the claim was disputed with the rights of other claimants whose claims have been accepted. In order to pay benefits to claimants who prevail in disputed compensability cases without establishing reserves for the payment of disputed and litigated claims, and without unduly prejudicing the rights of other claimants, the UEF will pay back-due benefits awarded as the result of litigation according to this rule. The UEF may also settle disputed liability issues by making payments in the manner provided by this rule, or by means of a non-acceptance of liability settlement.

(2) Where the UEF is subject to a final order from a court of competent jurisdiction requiring it to pay benefits, the UEF will pay back-due compensation benefits on a month-at-a-time basis, in addition to any current compensation benefits due the claimant. The back-due compensation payments will be made in the order of the oldest payments first, until the arrearages are eliminated. Thus, the first payment to claimant will be the amount owed for the current month, plus the amount that would have been paid for the first month of the claim. If a compensation payment would have been subject to a proportionate reduction during the month it would have been due (had liability been accepted) , then it will be paid at the reduced rate applicable to the period during which it would have been paid had liability not been disputed. The monthly back-due compensation amount will be added to the current month's compensation claims and paid from the positive fund balance. The monthly back-due compensation amount is not subject to any proportionate reduction that might be applied to the current month's compensation benefits.

(3) Where the UEF is subject to a final order from a court of competent jurisdiction requiring it to pay benefits, the UEF will pay other back-due benefits (such as medical benefits) on a month-at-a-time basis, in addition to any current "other benefits" due the claimant. Because of the requirement that compensation benefits be paid before other benefits are paid, there may be times when back-due "other payments" are not paid during a given month. The back-due other payments will be made in the order of the oldest payments first, until the arrearages are eliminated. If an "other benefit" payment would have been subject to a proportionate reduction during the month it would have been due (had liability been accepted) , then it will be paid at the reduced rate applicable to the period during which it would have been paid had liability not been disputed. The monthly back-due "other" amount will be added to the current month's "other benefits" claims and paid from the positive fund balance. The monthly back-due "other benefits" amount is not subject to any proportionate reduction that might be applied to the current month's payments.

(4) In order to calculate the proportionate reduction that a payment would have been subject to, had liability not been disputed, the UEF will recompute the total claims made during the month the benefit should have been paid by adding the claims due during that month and the amount that would have been paid, had liability not been disputed. The UEF will not seek reimbursement for benefits already paid, if the recalculation shows that there should have been a proportionate reduction in benefits.

(5) Where the UEF is subject to a final order from a court of competent jurisdiction requiring it to pay a penalty for unreasonable conduct in handling a claim, the UEF will pay the penalty as a current benefit.

(6) The UEF may, in its sound discretion, resolve disputes concerning payment of benefits by agreeing to pay back-due benefits in a manner consistent with this rule. Such resolutions may involve claims where initial compensability has been accepted or where initial compensability has been denied.

(7) The UEF may, in its sound discretion, resolve disputes concerning disputed initial liability by agreeing to make a payment in compromise settlement of the claim. In such instance, the entire amount of the payment must be treated as part of that month's current claim for compensation benefits, and is subject to a proportionate reduction if the positive fund balance is insufficient to pay compensation benefits in full.

(8) The UEF pays current benefits in the manner described in ARM 24.29.2846.

History: 39-71-203, MCA; IMP, 39-71-503, 39-71-504, 39-71-510, MCA; NEW, 1995 MAR p. 933, Eff. 7/1/95.