Burial Benefits: A 60-Second Seminar in Workers’ Compensation Claims Handling

One of many topics in workers’ compensation where an adjuster is presumed to automatically know what to do concerns death benefits. Today’s blog tells an incredible story of what happened in a death benefit claim where the adjuster was ignorant of the applicable law.

Our story begins with a claims adjuster for a major company who was assigned to handle a death claim.  The only instruction she received was when the supervisor reminded her that under current work comp law the maximum burial benefit was limited to $10,000. The adjuster then passed this information along to the dependents.  In addition, she told the family that all they had to do was simply submit their funeral receipts to her and she would reimburse them up to $10,000.  Instead of a traditional burial the family opted for cremation, along with a simple memorial service that ended up costing only $2,800.  But because the dependents were told they could spend up to $10,000 in burial expenses, the family decided to host a large “celebration of life” reception in honor of the deceased as part of the funeral package.  Following the memorial service, a total of more than 80 family and friends spent the afternoon and most of the evening eating and drinking at a local tavern in memory of the deceased.  It was a first-class event that cost $3,200 for food plus an additional $4,000 for alcohol.  Afterwards, receipts were submitted to the claims adjuster who reimbursed the family in the full.  Imagine that, a workers’ compensation insurer spending $7,200 on a party, including $4,000 for alcohol.  Unfortunately, the adjuster was totally unaware that a celebration of life reception was not compensable under workers’ compensation law.  Even the supervisor was unaware of it.

This is a prime example of what can happen when a claims department is not provided with adequate training.  Therefore, in our blog today we offer a few tips to our readers on the topic of burial benefits. First, burial benefits include reasonable funeral costs, along with associated church, temple, synagogue, or mortuary services. Appellate case law has determined there is no technical distinction between the words, ‘funeral’ and ‘burial’ as both are compensable.  Other compensable expenses include, but are not limited to, state and county burial permits, cremation and crematorium fees, transfer certificates, coroner assessments, licenses and related taxes, transportation costs, interment, body preparation, coffins/urns and burial fees.  On the other hand, extra piece-meal expenses such as flowers, thank-you cards/stationary, obituary notices, and celebration of life parties are not reimbursable under workers’ compensation, pursuant to a WCAB panel decision in Iba v. O’Connor Electro-Plating Corp.

As our clients and friends have probably noticed, work comp burial benefits are a topic that requires education.  Our blog today only touched the surface of a educational presentation that we offer on this subject.  Feel free to call upon F&B to assist in your training needs; however, don’t expect us to host an open bar during the program!