In the event of a delay in payment due to the insurer filing the order in the wrong file, the employee may be entitled to which combination?

• A. No penalties
• B. Interest only
• C. Interest and a 10% penalty
• D. A 10% penalty only

Answer: (C)

When benefits are paid late, the system provides remedies to ensure workers aren’t financially harmed by the delay. If the delay happens because the insurer filed the order in the wrong file, the employee is still entitled to compensation for the time value of the money that was delayed and a penalty for the tardiness. That means both interest on the late payment and a 10% penalty on the amount due.

The 10% penalty acts as a deterrent against late payments, ensuring insurers take prompt action. Interest covers the cost of the money being unavailable to the employee during the delay. In a situation caused by the insurer’s administrative error, applying both remedies makes sense because it acknowledges the fault lies with the insurer and protects the employee from the financial harm caused by the delay.