WHAT IS A NOTICE OF COMPENSATION PAYABLE?
Under the Pennsylvania Workers' Compensation Act, the insurance company or employer accepts legal responsibility for a work injury by issuing a Notice of Compensation Payable (NCP). Once an NCP is issued, the insurance company and your employer accepts all or part of your claim.
On the NCP, the insurance company will list the names and addresses of you, your employer, and the insurer. It ordinarily will also list the claim number, claims representative and insurance company phone number and address you can call or write concerning your claim. In the section marked "INJURY INFORMATION", the insurance company describes the injury for which it has accepted legal responsibility. Ordinarily the insurance company will try to minimize its legal responsibility by formally accepting an injury that is less serious than the one you actually suffered. For example, if you injured herniated a lumbar disc in your low back, a serious condition that could require surgery, the insurance company often will describe the injury as a "lumbosacral sprain/strain." They do this because they are concerned that the legal consequences of formally acknowledging liability for a very serious injury. You have the right to file a petition to review to correct the description of injury contained on the NCP.
The "TPA" section of the NCP is filled out only if there is a Third Party Administrator ("TPA") of your claim. If your employer is self-insured for workers' compensation, it pays workers' compensation benefits out of its earnings instead of purchasing insurance. They will generally hire a TPA to handle your claim because they do not have the skills to take care of injury claims. The claims representative of the TPA performs the same function as the claims representative of an insurer. Claims representatives investigate claims, make decisions about whether to accept the claim, monitor medical treatment, pay bills, and issue workers' compensation checks, among other things.
The "Medical Only" NCP
The NCP may be for medical expenses only. If this occurs, the insurance company accepts legal responsibility for the payment of medical treatment for your injury, but denies that you have suffered any wage loss as a result of the injury. This often occurs when an individual has suffered a work injury but immediately returns to light duty at no loss of wage. There are many circumstances, however, in which the insurance company accepts legal responsibility for medical expenses only and denies the wage loss claim, even though an employee may be missing time from work. If this occurs, the employee has no choice but to file a claim petition with the Bureau of Workers' Compensation, which under virtually all circumstances will require the employee to hire a lawyer.
If the insurance company accepts legal responsibility for payment of wage loss (indemnity) benefits, the weekly compensation rate and Average Weekly Wage (AWW) are set forth in the agreement. The AWW is calculated by looking at the gross wages you earned in the four quarters immediately preceding the work injury and by averaging the three highest quarters. If you have not worked for your employer for at least three quarters, a different method is used. For most people, the compensation rate will be about two-thirds of their AWW. Those benefits are tax-free. Low wage earners may receive up to 90 percent of their average weekly wage, and high wage earners are entitled to only collect up to the maximum compensation rate, which is set every year by the Pennsylvania Department of Labor and Industry. The wage calculation is contained in a Statement of Wages, a copy of which the insurance company is supposed to send you.
The NCP should also state the date that payments begin and the schedule of payment.
Specific Loss Benefits
There are specific loss benefits that result from the loss of a limb or the loss of eyesight or hearing. If you suffer a specific loss type injury such as a loss of limb, you are entitled to benefits set forth in a schedule. You get those benefits regardless of whether you have any wage loss. On the other hand, if you suffer a specific loss, it is possible that those will be the only benefits you will be entitled to receive, even if you are totally disabled as a result of the injury.
The Notice of Compensation Payable must be distinguished from the Notice of Temporary Compensation Payable (NTCP), which is described on another page.
For more detailed answers to your questions, consult the Frequently Asked Questions bar to the left or download a copy of The Consumer’s Guide to Pennsylvania Workers’ Compensation. For the definitive guide to making your way through the Pennsylvania workers’ compensation system, order a free paper copy of The Wounded Worker: Inside the Pennsylvania Workers’ Comp Maze by calling 877-959-1811 or download a free e-copy by clicking here.