Today the Vermont Supreme Court ruled in a 3-2 decision that employer-paid health insurance premiums are not wages as defined by the Vermont Workers’ Compensation Act. Lydy v. Trustaff, Inc./Wausau Insurance Company, 2013 VT 44 (3–2)
The injured worker argued the Department of Labor's long held interpretation that the employer’s contributions to health insurance premiums are not to be included in the calculation of average weekly wage was incorrect as a matter of law. Today's decision upheld the Commissioner's interpretation of the statute as expressed in this case and cited favorably the earlier DOL decision, Pelissier v. Hannaford Bros., No. 26-11WC (Sept. 9, 2011). Justice Skoglund, writing for the majority noted that, “The costs [of health insurance premiums] are not tied to the employee’s labors and instead are based on factors unconnected to the employee. The existence of the insurance and the calculation of the employer’s contribution to it does not equate to a measurement of the benefit to the employee.” Lydy v. Trustaff, Inc./Wausau Insurance Company, 2013 VT 44 ¶ 14. In Vermont the employers’ contributions to health insurance “do not reflect the employee’s labors or compensation as defined through wages.” The amounts paid by the employer for health insurance premiums are not included in the calculation of average weekly wage.
