               IN THE SUPREME COURT OF IOWA
                               No. 14–2097

                             Filed June 3, 2016


DAVID LOWELL EVENSON,

      Appellant,

vs.

WINNEBAGO INDUSTRIES, INC. and SENTRY INSURANCE COMPANY,

      Appellees.



      Appeal from the Iowa District Court for Winnebago County,

Gregg R. Rosenbladt, Judge.



      Petitioner appeals from district court judgment affirming on

judicial   review   workers’   compensation       commissioner’s   decision.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.



      Mark S. Soldat of Soldat, Parrish-Sams & Gustafson, PLC, West

Des Moines, for appellant.



      Steven T. Durick and Joseph M. Barron of Peddicord, Wharton,

Spencer, Hook, Barron & Wegman, LLP, West Des Moines, for appellee.
                                          2

ZAGER, Justice.

         In this appeal, we are asked to decide whether an employer’s

matching contributions to an employee’s 401k plan should be considered

part     of     weekly   earnings   for   purposes   of   calculating   workers’

compensation weekly benefits. We must also decide whether the district

court erred in affirming the workers’ compensation commissioner’s

decision on the amount of healing period benefits owed, the extent of

permanent disability, and the penalty to be awarded. For the reasons

stated below, we conclude that an employer’s matching contributions to

an employee’s 401k plan are not weekly earnings for purposes of

calculating workers’ compensation weekly benefits. We also conclude the

district court did not err in affirming the decision of the commissioner

with respect to the extent of permanent disability. However, we hold that

the district court erred in affirming the date when healing period benefits

commenced, the date when the healing period benefits ended, and the

date when permanent partial disability (PPD) benefits commenced. We

therefore affirm in part and reverse in part the judgment of the district

court.        We remand the case to the district court with the following

instructions on judicial review: (1) to affirm the commissioner’s findings

as to the weekly benefit rate and the extent of permanent partial

disability and (2) to remand the case to the commissioner for a

redetermination of the date when healing period benefits commenced in

September 2010, for a redetermination of the date when healing period

benefits ended and PPD benefits commenced, and for a recalculation of

penalty and interest benefits based on the above dates.

         I. Background Facts and Proceedings.

         David Evenson began working at Winnebago Industries, Inc. in

1987 to supplement his income from farming. On May 18, 2010, while
                                    3

employed at Winnebago, Evenson sustained an injury to his left elbow.

Evenson was an hourly employee at the time of his injury. On May 27,

Evenson sought treatment for pain in his left elbow.    He was seen by

James McGuire, PA-C. Evenson reported that the pain in his left elbow

started after he was stacking aluminum running boards as part of his

job duties. Evenson was diagnosed with left elbow medial epicondylitis.

He was provided a brace and advised to avoid lifting running boards until

his next appointment. At his next appointment, Evenson reported the

pain condition had improved and that he was still working his regular

job. At his follow-up appointment on June 10, Evenson reported that his

left elbow was sore because he had been doing extra work at Winnebago

and working overtime. Although Evenson had full range of motion in his

left arm, McGuire restricted him to working eight-hour days, five days

per week.

      Evenson was also treated by Dr. Carlson.       Evenson received a

cortisone injection in his left elbow on June 25, and he reported that it

reduced his pain significantly.    At his follow-up appointment with

McGuire, Evenson was told he could continue with his work duties at

eight hours per day. At the next appointment, Evenson reported more

discomfort with heavy lifting and gripping, but also reported that he had

been working ten-hour days. On August 17, Evenson reported he was

experiencing more pain in his left elbow while working overtime.

      On September 3, Evenson received a second cortisone injection

from Dr. Carlson. On the same day, he was also given work restrictions

and told not to use his left arm for two weeks.     Evenson claims that

September 3 is the date when he stopped working, while Winnebago

asserts that September 7 is the date that he stopped working.

Dr. Carlson made notations on the Winnebago form following the
                                    4

cortisone injection on September 3 that stated: “OFF 1300 9-3-10 . . .

can’t accommodate – will give vac. for remainder of day if he chooses or

98 WI – wants Holiday pay so plans to use vac.” Winnebago’s records

show that Evenson took one hour of vacation pay on September 3 and

that there was a plant shut down on the same day for one-half hour.

Evenson was also paid eight hours of holiday pay on September 6 for

Labor Day. The records indicate no other vacation pay during the time

period between September 3 and September 6.

       On September 7, Evenson had a follow-up appointment with

McGuire.    McGuire noted some improvement in the left elbow and

advised Evenson to avoid tight gripping and heavy lifting with his left

arm.    McGuire’s office notations from the appointment state that

Evenson “was told that there is really no light duty in his work area. His

supervisor wanted to know if there is some other alternative to this;

otherwise, he will have to be off work.” The notation goes on to say that

Evenson “should be off work for another ten days as long as they do not

have any light duty for the patient.” (Emphasis added.)

       Evenson was eventually referred to Dr. Gibbons, an orthopedic

surgeon. On October 5, after his examination of Evenson, Dr. Gibbons

gave Evenson work restrictions to only lift up to twenty pounds

continuously; to push, pull, or lift with his left arm only occasionally;

and to avoid repetitive tasks.    At a follow-up appointment, Evenson

reported that his symptoms were worsening.        Dr. Gibbons restricted

Evenson to lifting ten pounds continuously and twenty pounds

occasionally, and directed him not to push/pull or handle/grip with his

left arm. Dr. Gibbons lifted these restrictions on January 27, 2011, and

Evenson was released to return to his regular duties.        Dr. Gibbons

reported that Evenson was at maximum medical improvement (MMI) at
                                            5

that time. He also noted that he had no impairment rating for Evenson

because Evenson retained the full range of motion in his left elbow.

       On September 14, 2011, Evenson filed a petition seeking workers’

compensation benefits related to the injury to his left elbow.                    Sentry

Insurance     Company        was    the   workers’     compensation        insurer    for

Winnebago. 1

       In February 2012, Evenson was again seen by McGuire. At this

appointment, Evenson complained that he was still having elbow pain

and reported numbness and tingling radiating down his arm into the left

small and ring fingers. McGuire ordered nerve conduction studies on the

left elbow and advised Evenson to limit left hand gripping. The studies

showed ulnar neuropathy in Evenson’s left elbow and asymptomatic mild

median neuropathy in Evenson’s left wrist.

       Evenson was later treated by Dr. Yanish, another orthopedist. On

March 4, Dr. Yanish diagnosed left medial epicondylitis and ulnar nerve

impingement. An MRI showed some tendinopathy.

       At the request of his attorney, Evenson obtained an independent

medical examination and evaluation (IME) from Dr. Kuhnlein in March

2012. The IME addressed not only the nature and extent of the injury to

Evenson’s left elbow, but also addressed several other body parts and

conditions that were separately relevant to his claim against the Second

Injury Fund. 2



       1Evenson  also filed a claim for benefits under the Second Injury Fund of Iowa.
This claim was subsequently settled. Therefore, this opinion only addresses Evenson’s
claims against Winnebago and Sentry.
       2The  Second Injury Fund claim involved bilateral foot injuries and left knee
injuries. Dr. Kuhnlein was asked to give impairment ratings for the right foot, left foot,
and left knee, in addition to Evenson’s left elbow.
                                     6

      Dr. Yanish performed surgery on Evenson’s left elbow on April 14,

after which Evenson underwent physical therapy.           Dr. Yanish kept

Evenson off work until May 2, but noted that Evenson could not use his

left arm upon return to work. On June 10, Evenson reported his pain

had improved and he was not experiencing any further numbness or

tingling. Dr. Yanish restricted Evenson to not lifting anything over ten

pounds with his left arm. In early August, Dr. Yanish changed Evenson’s

restrictions to not lifting more than twenty pounds with his left arm.

Dr. Yanish also found an improved range of motion in Evenson’s left

elbow. On August 31, Dr. Yanish changed Evenson’s restrictions to only

occasionally lifting forty pounds, lifting up to twenty pounds repetitively,

and only occasionally lifting up to twenty pounds above shoulder level.

On October 7, Dr. Yanish released Evenson from treatment and

restricted him to no lifting over twenty pounds and no lifting over his

shoulder.

      A contested hearing was held on July 6, 2012. Both Dr. Yanish

and Dr. Kuhnlein offered opinions. Dr. Yanish allocated a four percent

permanent impairment to Evenson’s left arm and recommended that

Evenson restrict lifting, pushing, and pulling with that arm to twenty

pounds.     Dr. Kuhnlein rated Evenson’s permanent arm impairment at

three percent and selected June 7, 2011, as the date when Evenson

reached MMI.

      Some of Evenson’s family members testified—over objection—about

their observations of his use of his left arm after the injury. Evenson’s

wife testified that he has difficulty with certain tasks and estimated that

he lost sixty percent of the use of his left arm.    Evenson’s father, his

father-in-law, and his sister-in-law testified that he has lost some use of
                                          7

his left arm.      They estimated, respectively, that Evenson lost sixty

percent, eighty percent, or fifty-five percent of the function of his left arm.

        Evenson also testified regarding the effect of the loss of use of his

left elbow to his home life and hobbies. Although he continues to farm,

he has scaled back his activities significantly and relies on his family’s

help.   Evenson testified that he is no longer able to steer his farming

machinery with his left arm because it is painful and he has trouble

gripping the wheel. He is no longer able to care for his horses. Evenson

previously broke his horses to ride, but he is no longer able to do so

because he cannot properly grip a rope in his left hand. Evenson’s wife

is now responsible for taking care of the horses. Evenson is no longer

able to climb ladders on his farm. Due to his left elbow pain, Evenson

stated that he is no longer able to ride his snowmobile or his four-

wheeler. Evenson testified that the pain in his left elbow is usually at a

constant five on a scale of one to ten.

        On   August    8,   2012,   the   deputy    commissioner      issued    his

arbitration decision. In the decision, the deputy commissioner awarded

Evenson fifty weeks of PPD benefits at the rate of $506.42 per week;

healing period benefits between April 14, 2011, and June 14, 2011, at

the rate of $506.42; and temporary partial disability (TPD) benefits for a

number of time periods 3 based on an average gross weekly rate of

compensation of $763.52.         The arbitration decision awarded Evenson

only part of the cost of the IME performed by Dr. Kunlein because a

substantial portion of the doctor’s evaluation focused on body parts and


        3Evenson was awarded TPD benefits at the weekly rate of $764.53 for the time
periods of June 10, 2010, through June 25, 2010; July 13, 2010, through September 2,
2010; October 5, 2010, through December 15, 2010; February 17, 2011, through April
13, 2011; and June 14, 2011, through October 4, 2011.
                                          8

conditions unrelated to the upper extremity injury claimed by Evenson in

this case.     The deputy commissioner also concluded the employer

contributions to Evenson’s 401k plan were a fringe benefit and therefore

not included in the calculation of average weekly gross earnings. 4                In

determining the extent of Evenson’s permanent disability, the deputy

commissioner considered not only the impairment ratings determined by

the medical testimony, but also the testimony of Evenson’s family

members. The deputy commissioner concluded that Evenson suffered a

twenty percent permanent loss of use in his left arm as a result of the

injury in this case.

       The deputy commissioner further concluded Evenson is entitled to

healing period benefits.      In particular, the deputy commissioner found

Winnebago paid all healing period benefits owed up to the time of

Evenson’s surgery in September 2011, but found additional healing

periods owed for subsequent time off work were both delayed and

insufficient in amount. The deputy concluded that Winnebago must pay

a penalty because the “defendants failed to provide reasonable cause or

excuse for the delay and denial of healing period and temporary partial

disability benefits discussed above and certainly did not provide notice of

the reason for such delays and denials.”

       The deputy stated,

       A general award will be made again awaiting more specific
       calculations of the parties in a manner consistent with this
       decision. I do not find the use of the weekly rate of



       4The deputy found that Evenson’s weekly wage was $763.52, which resulted in a
weekly compensation rate of $506.42. If Winnebago’s 401k matching contributions
were included in the calculation, Evenson’s weekly wage would be $771.21, resulting in
a weekly compensation rate of $510.43.
                                           9
      compensation of $468.62[ 5] unreasonable given the
      considerable fluctuations in claimant’s earnings each week.
      Also, the amount of the penalties shall be only 25 percent of
      the amounts delayed or denied as there was no showing of
      any prior violations of law by Winnebago or Sentry
      Insurance.

      Evenson      filed   a   rehearing       application,   which   was   denied.

Winnebago and Sentry filed a notice of appeal to the Iowa Workers’

Compensation Commissioner on September 7, 2012, and Evenson filed a

notice of cross-appeal. The commissioner issued an appeal decision on

August 2, 2013, affirming the arbitration decision on all issues. Evenson

sought judicial review.        After a hearing, the district court entered an

order on October 14, 2014, affirming the decision of the commissioner.

Evenson appealed and we retained the appeal.

      II. Standard of Review.

      The first issue in this case asks us to engage in statutory

interpretation to determine whether an employer’s contribution to an

employee’s 401k plan is included in the calculation of weekly benefits.

We review the commissioner’s interpretation of Iowa Code chapter 85 for

errors at law.    Iowa Code § 17A.19(10)(c) (2011); see Iowa Ins. Inst. v.

Core Grp. of Iowa Ass’n for Justice, 867 N.W.2d 58, 65 (Iowa 2015). We

have declined to give deference to the commissioner’s interpretation of

various provisions included in chapter 85.             Waldinger Corp. v. Mettler,

817 N.W.2d 1, 7 (Iowa 2012) (holding that the commissioner was not
vested with interpretive authority for section 85.34(1)); Neal v. Annett

Holdings, Inc., 814 N.W.2d 512, 519 (Iowa 2012) (holding that the

commissioner did not have the authority to interpret the phrase “suitable


      5On   December 7, 2011, Winnebago and Sentry paid Evenson ten weeks of
benefits using the four percent impairment rating given by Dr. Yanish. The rate paid
was $468.62 per week plus interest in the amount of $179.58.
                                    10

work” under section 85.33(3)); Burton v. Hilltop Care Ctr., 813 N.W.2d

250,   261   (Iowa   2012)   (explaining   that   we   substitute   our   own

interpretation of sections 85.36 and 85.61(3) if we find the interpretation

of the commissioner was erroneous); Swiss Colony, Inc. v. Deutmeyer,

789 N.W.2d 129, 133 (Iowa 2010) (explaining that we did not believe the

legislature vested the commissioner with the authority to interpret

section 85.34(5)).

       This case also asks us to determine whether the district court

erred in upholding the commissioner’s findings regarding healing period

benefits, the percentage of disability, and the amount of penalty to be

awarded. When we review the commissioner’s findings of fact, we apply

the following principles:

       The industrial commissioner’s findings have the effect of a
       jury verdict. We may reverse the commissioner’s findings of
       fact only if they are unsupported by substantial evidence in
       the record made before the agency when the record is viewed
       as a whole. Evidence is substantial if a reasonable mind
       would find it adequate to reach the same conclusion. An
       agency’s decision does not lack substantial evidence because
       inconsistent conclusions may be drawn from the same
       evidence.

Coffey v. Mid Seven Transp. Co., 831 N.W.2d 81, 89 (Iowa 2013) (quoting

2800 Corp. v. Fernandez, 528 N.W.2d 124, 126 (Iowa 1995) (citations

omitted)).   Substantial evidence is “evidence that would be deemed

sufficient by a neutral, detached, and reasonable person, to establish the

fact at issue when the consequences resulting from the establishment of

that fact are understood to be serious and of great importance.” Iowa

Code § 17A.19(10)(f)(1).

       III. Analysis.

       A. Employer’s Contribution to Employee’s 401k Account. The

parties disagree whether an employer’s matching contributions to an
                                     11

employee’s 401k plan should be included in a weekly rate calculation

when determining workers’ compensation benefits. This is an issue of

first impression for this court.      Our determination rests upon the

question of whether matching contributions to a 401k plan are

considered “spendable weekly earnings” under Iowa Code section

85.61(9).

      Iowa Code section 85.37 provides that the weekly benefit amount

paid to an employee is based on eighty percent of the employee’s “weekly

spendable earnings.” Id. § 85.37. Compensation is based on “the weekly

earnings of the injured employee at the time of the injury.” Id. § 85.36.

“Weekly earnings” are defined as “gross salary, wages, or earnings of an

employee to which such employee would have been entitled had the

employee worked the customary hours for the full pay period in which

the employee was injured.” Id.

      “Spendable weekly earnings” are defined as the “amount remaining

after payroll taxes are deducted from gross weekly earnings.”         Id.

§ 85.61(9). “Gross earnings” are defined as

      recurring payments by employer to the employee for
      employment, before any authorized or lawfully required
      deduction or withholding of funds by the employer,
      excluding irregular bonuses, retroactive pay, overtime,
      penalty pay, reimbursement of expenses, expense
      allowances, and the employer’s contribution for welfare
      benefits.

Id. § 85.61(3).

      We must determine whether an employer’s matching contributions

to an employee’s 401k plan are considered weekly earnings for purposes

of Iowa’s workers’ compensation law. When we are asked to interpret a

statute, we turn to well-settled rules of statutory interpretation:

      The purpose of statutory interpretation is to determine the
      legislature’s intent. We give words their ordinary and
                                   12
      common meaning by considering the context within which
      they are used, absent a statutory definition or an established
      meaning in the law. We also consider the legislative history
      of a statute, including prior enactments, when ascertaining
      legislative intent. When we interpret a statute, we assess the
      statute in its entirety, not just isolated words or phrases.
      We may not extend, enlarge, or otherwise change the
      meaning of a statute under the guise of construction.

Branstad v. State ex rel. Nat. Res. Comm’n, 871 N.W.2d 291, 295 (Iowa

2015) (quoting Schaefer v. Putnam, 841 N.W.2d 68, 75 (Iowa 2013)). “We

also consider the statute’s ‘subject matter, the object sought to be

accomplished, the purpose to be served, underlying policies, remedies
provided, and the consequences of the various interpretations.’ ”      Id.

(quoting Cox v. State, 686 N.W.2d 209, 213 (Iowa 2004)).

      We first look at the ordinary meaning of certain words contained in

the workers’ compensation statutes.      Section 85.36 defines “weekly

earnings” as including “gross salary, wages, or earnings.”     Iowa Code

§ 85.36. “Salary” is defined as the “fixed compensation paid regularly (as

by the year, quarter, month, or week) for services.”    Salary, Webster’s

Third New International Dictionary (unabr. ed. 2002). “Wage” is defined

as

      a pledge or payment of usu. monetary remuneration by an
      employer esp. for labor or services usu. according to contract
      and on an hourly, daily, or piecework basis and often
      including bonuses, commissions, and amounts paid by the
      employer for insurance, pension, hospitalization, and other
      benefits.

Wage, Webster’s Third New International Dictionary.        “Earnings” are

defined as “something (as wages or dividends) earned as compensation

for labor or the use of capital.”       Earnings, Webster’s Third New

International Dictionary.

      An employer’s contribution to a 401k plan is not dependent upon

the hours an employee works in the normal way we think of the wage or
                                            13

salary an employee earns for working a certain number of hours or days.

An employee’s 401k plan is related, at least tangentially, to his or her

wage or salary, in that the amount the employee chooses to contribute

may be based on how much they earn. However, an employer’s 401k

plan matching contributions are based on an employee’s choice and

participation. Ultimately, an employee chooses whether and how much

to participate in a 401k plan.          After the employee chooses, then the

employer matches the contribution to the plan.                    The portion the

employee chooses to contribute certainly comes from his or her normal

salary or wage. The added contribution from any match by the employer,

however, does not.

       It is clear from the ordinary meaning of the words salary, wage,

and earnings that an employer’s matching contribution to an employee’s

401k plan is not meant to be included in weekly earnings for purposes of

our workers’ compensation statute.               When we read the dictionary

definitions in conjunction with the exclusionary language contained in

our statute, we conclude our legislature intended to exclude employer

contributions to 401k plans from the definition of gross earning.                See

Iowa   Code      § 85.61(3)     (specifically    excluding    “irregular   bonuses,

retroactive pay, overtime, penalty pay, reimbursement of expenses,

expense allowances, and the employer’s contribution for welfare benefits”

from the regular definition of gross earnings).

       Evenson contends an employer’s matching contributions to a 401k

plan are not welfare benefits, and they therefore should not be excluded

from gross earnings under section 85.61(3). We disagree. The ordinary

meanings    of    the   terms     salary,    wage,   and     earnings   inform   our

interpretation of the term “welfare benefits” in this context.             See Iowa

Code § 85.61(3) (defining gross earnings as “recurring payments by
                                      14

employer to the employee for employment, before any authorized or

lawfully required deduction or withholding of funds by the employer,

excluding . . . welfare benefits”). A “benefit” is defined as “financial help

in time of sickness, old age, or unemployment” and “a cash payment or

service provided for under an annuity, pension plan, or insurance

policy.” Benefit, Webster’s Third New International Dictionary. “Welfare”

is defined as “the state of faring or doing well . . . thriving or successful

progress in life . . . a state characterized esp. by good fortune, happiness,

well-being, or prosperity.”    Welfare, Webster’s Third New International

Dictionary. The term included in the statute is “welfare benefits,” and the

two words should be considered together. Together, welfare benefits can

mean something extra given to an employee for their well-being.          We

conclude a tax-deferred fund often utilized by employees as a substitute

for, or in addition to, an established retirement plan clearly falls under

the definition of welfare benefits.

      The statute contemplates that there may be welfare benefits given

to employees that are separate and distinct from their normal weekly

earnings.   See Iowa Code § 85.61(3).       Matching contributions to an

employee’s 401k plan fall under this category. As discussed above, we

conclude that a 401k plan falls outside the normal definition of wage,

salary, or earnings.    An employer’s matching contributions to a 401k

plan are something extra, in addition to an employee’s normal, earned

wages. They provide assistance for employees in planning for retirement.

An employer’s contribution to an employee’s retirement account is a

benefit (something extra given by an employer) for the welfare of an

employee (that employee’s well-being, specifically in regard to prosperity).

Thus, under the ordinary meaning of the terms, we conclude an
                                    15

employer’s matching contribution to an employee’s 401k plan is a welfare

benefit under the statute.

      Further, Iowa Code section 85.61 defines “spendable weekly

earnings” as “that amount remaining after payroll taxes are deducted

from gross weekly earnings.”      Iowa Code § 85.61(9).     As a deferred

compensation    plan,   an   employer’s   matching    contribution   to   an

employee’s 401k plan is not subject to payroll taxes in a manner that

would fall under the statutory definition. An employee who receives a

matching contribution to their 401k plan cannot immediately spend the

contribution at the time it is paid, unlike a regular weekly wage.

      The leading Supreme Court case on fringe benefits is Morrison-

Knudsen Construction v. Director, Office of Workers’ Compensation

Program, 461 U.S. 624, 103 S. Ct. 2045, 76 L. Ed. 2d 194 (1983). In this

case, the Court held that an employer’s contributions to a union trust

fund for health and welfare, pensions, and employee training were not

considered wages for the purposes of calculating weekly benefits under

the District of Columbia’s Workers’ Compensation Act. Id. at 637, 103

S. Ct. at 2052–53, 76 L. Ed. 2d at 204.      In so deciding, the Supreme

Court relied on the fact that the health and welfare, pension, and

training funds could not be readily converted to a cash equivalent in the

same way as regular wages or the reasonable value of lodging.         Id. at

630, 103 S. Ct. at 2048–49, 76 L. Ed. 2d at 199. The Court also noted

that the legislative history indicated that Congress did not intend to

include these types of fringe benefits when calculating the rate of

compensation benefits. Id. at 632, 103 S. Ct. at 2050, 76 L. Ed. at 201.

      The majority trend is to treat an employer’s matching contribution

to a 401k plan as a welfare benefit that falls under the category of “fringe

benefits,” and thus is not included in the calculation of weekly benefits
                                       16

for workers’ compensation purposes. 8 Arthur Larson et. al., Larson’s

Workers’ Compensation Law § 93.01[2][b], at 93-20 (rev. ed. 2015); cf.

City of Lamar v. Koehn, 968 P.2d 164, 167 (Colo. App. 1998) (excluding

an employer’s contribution to an employee’s pension plan from the

calculation of weekly benefits); Luce v. United Techs. Corp., 717 A.2d 747,

755 (Conn. 1998) (finding that the calculation of “wages” under the

state’s workers’ compensation laws does not include pensions); Rainey v.

Mills, 733 S.W.2d 756, 758 (Ky. Ct. App. 1987) (declining to find

statutory support to include fringe benefits, such as employer pension

plan contributions, in weekly wage calculation); Barnett v. Sara Lee

Corp., 627 A.2d 86, 90–91 (Md. Ct. Spec. App. 1993) (finding that

pension plans could not be considered in the calculation of weekly wages

for the purpose of determining a claimant’s industrial loss of use); In re

Gagnon, 965 A.2d 1154, 1159 (N.H. 2009) (holding that weekly wages are

calculated using a claimant’s pre-tax pay and, therefore, it was not

unjust for the collective bargaining agreement to exclude employer

payments to an employee’s pension plan from the definition of wage);

Shaw v. U.S. Airways, Inc., 665 S.E.2d 449, 453 (N.C. 2008) (holding that

an employer’s contributions to an employee’s retirement account are not

included in the calculation of a weekly wage for workers’ compensation

purposes); Clopton v. City of Muskogee, 147 P.3d 282, 284–85 (Okla. Civ.

App. 2006) (relying on Morrison-Knudsen in determining that pension

plans    are   not   included   in   the   definition   of   wage   for   workers’

compensation purposes); Nelson v. SAIF Corp., 714 P.2d 631, 631–32 (Or.

Ct. App. 1986) (finding that pensions are not included in the definition of

wages included in Oregon’s workers’ compensation laws).

        We acknowledge that a few states have changed their workers’

compensation statutes to include retirement plans in the definition of
                                    17

fringe benefits. See, e.g., Neb. Rev. Stat. Ann. § 48-1229 (West, Westlaw

current through 2016 2d Reg. Sess.). Our legislature has not taken such

action, and we agree with the majority trend evidenced by the cases cited

above.    An employer’s matching contributions to an employee’s 401k

plan fit much more squarely into the fringe-benefits category than that of

a regular salary or wage. As discussed earlier, those contributions are

not directly linked to an employee’s salary, nor are they immediately

available for the employee to spend in the same way as regular wages.

We conclude the commissioner and the district court were correct in

declining to expand the definition of weekly spendable earnings to

include employer 401k contributions.

      B. District Court Judgment.         Evenson also claims that the

district court erred by affirming the commissioner’s decision regarding

the extent of his scheduled member disability, the commencement dates

of healing period benefits, and the amount of penalty awarded.         We

address each argument in turn to determine whether the commissioner’s

findings of fact were supported by substantial evidence. See, e.g., Coffey,

831 N.W.2d at 89.

      1. Extent of disability. An injury to the elbow is a scheduled injury

(to the arm) with a maximum benefit period of 250 weeks. Iowa Code

§ 85.34(2)(m). The compensation for a scheduled injury is based on the

impairment of bodily function.     Westling v. Hormel Foods Corp., 810

N.W.2d 247, 252 (Iowa 2012). “[I]t is a fundamental requirement that

the commissioner consider all evidence, both medical and nonmedical.

Lay witness testimony is both relevant and material upon the cause and

extent of injury.”   Gits Mfg. Co. v. Frank, 855 N.W.2d 195, 199 (Iowa

2014) (quoting Miller v. Lauridsen Foods, Inc., 525 N.W.2d 417, 421 (Iowa

1994)).
                                      18

       In this case, the deputy considered opinions offered by Dr. Yanish,

who rated Evenson’s functional impairment at four percent, and Dr.

Kuhnlein, who rated Evenson’s functional impairment at three percent.

The deputy also heard testimony from various family members about the

injury suffered by Evenson. Based on all of the testimony, the agency

found Evenson suffered a twenty percent permanent loss of the use of

his left arm. In making this determination, the agency considered all of

the expert medical opinions as well as the testimony of Evenson’s family

members. The district court found substantial evidence supporting the

agency’s determination on the extent of Evenson’s disability. On appeal,

Evenson contends the commissioner’s disability finding is not supported

by substantial evidence and contends he suffered a twenty-one to fifty

percent disability in his left arm.

       In this case, the deputy heard and considered medical opinions,

opinions of family members, and the testimony of Evenson himself. In

our review of the record, we find substantial evidence supporting the

agency’s finding on disability and therefore affirm the district court’s

ruling on judicial review.

       2. Healing period benefits. Evenson alleges that the commissioner

incorrectly determined the commencement dates for healing period and

PPD benefits.    The commissioner determined that Evenson had two

different compensable healing periods. The first was from September 7,

2010, to September 19, 2010. The second was from April 14, 2011, to

June 14, 2011. The arbitration decision awarded Evenson PPD benefits

beginning on November 30, 2011.             This was based on Dr. Yanish’s

impairment rating that placed Evenson at MMI on November 29, 2011.

Both    the   commissioner     and    the     district   court   affirmed   that

commencement date for PPD benefits.
                                   19

      Evenson contends his first healing period began on September 3,

rather than September 7.     He argues that he first received physical

restrictions on September 3 and Winnebago was unable to accommodate

his restrictions at that time. Therefore, he was required to be off work

beginning on September 3.     Dr. Carlson’s progress note reported that

Evenson planned to take vacation pay because Winnebago was unable to

accommodate his restrictions. McGuire’s progress note for September 7

stated that Evenson should be off work for another ten days, suggesting

that Evenson had already been off work before that appointment.

Further, Winnebago’s records show that Evenson took one hour of

vacation pay on September 3 and that there was a one-half hour plant

shut down on the same day.       Evenson was also paid eight hours of

holiday pay on September 6 for Labor Day. We agree with Evenson that

substantial evidence does not support the commissioner’s finding that

the first healing period began on September 7.

      Generally, an employer may seek a credit for the good faith

overpayment of workers’ compensation benefits. Iowa Code § 85.34(4)–

(5); see also 15 James R. Lawyer, Iowa Practice: Workers’ Compensation

§ 13:10, at 175 (2015) [hereinafter Iowa Practice].    Additionally, the

commissioner allows credits for sick pay and vacation pay in some

situations.   Iowa Practice, at 175–76; see also King v. Marion Indep.

Cmty. Sch. Dist., Iowa Workers’ Comp. Comm’n, 2013 WL 3185066, at

*2–3 (June 10, 2013). If an employee elects to use sick pay or vacation

pay during a time in which workers’ compensation benefits are not being

paid, an employer is not entitled to a credit for the pay unless the

employee later elects to have the vacation or sick pay restored.   Iowa

Practice, at 176.
                                   20

      Conversely, the commissioner has generally allowed an employer a

credit against healing benefits in the amount of holiday pay paid to an

employee during a healing period. See, e.g., King, 2013 WL 3185066, at

*2.   The rationale for treating vacation and sick pay differently than

holiday pay is that sick pay and vacation pay are paid leave that an

employee accrues over time for previous work that the employee

performed.   See id.   The employee who uses vacation or sick pay as

compensation during a healing period loses the future ability to utilize

such benefits for their intended purpose.   If an employer is granted a

credit for paying an employee for sick or vacation pay that the employee

elected to take during a time when the employer should have been

paying workers’ compensation benefits, then the cost is shifted to the

employee rather than the employer. See id. In contrast, there is not a

cost to the employee when they take holiday pay. See id. Holiday pay is

not something an employee accrues and can use in the future; it is a

benefit that is given independent of the employee’s hours worked or

choice to take a paid day off. See id. We agree with the approach the

commissioner has taken on this issue. If, on remand, the commissioner

determines the first healing period began on September 3, then the

holiday pay Evenson was paid for September 6 may be credited against

Winnebago’s obligation to pay additional healing period.

      Evenson also argues that the commissioner should have awarded

PPD benefits beginning on September 20, the day he returned to work

after the first healing period, and then suspended those benefits during

his second healing period between April 14, 2011, to June 14, 2011, and

recommenced PPD benefits on June 15, 2011.

      Iowa Code section 85.34 provides the standard for determining

when healing period benefits terminate. Iowa Code § 85.34(1). We have
                                    21

recognized that the statute presents a menu of options the fact finder

shall consider when deciding that the healing period has ended.       See,

e.g., Waldinger Corp., 817 N.W.2d at 8–9. Section 85.34 provides that

the healing period lasts

      until the employee has returned to work or it is medically
      indicated that significant improvement from the injury is not
      anticipated or until the employee is medically capable of
      returning to employment substantially similar to the
      employment in which the employee was engaged at the time
      of injury, whichever occurs first.

Iowa Code § 85.34(1) (emphasis added). We have previously recognized

that there may be more than one healing period for a single injury.

Waldinger Corp., 817 N.W.2d at 8.

      “Compensation for permanent partial disability shall begin at the

termination of the healing period . . . .” Iowa Code § 85.34(2). When

there are multiple healing periods, we must determine whether PPD

begins to run from the end of the first healing period or whether the fact

finder may choose among the multiple healing periods that are supported

by substantial evidence, as occurred here.      We hold that the statute

clearly states the healing period lasts until whichever situation occurs

first. Id. § 85.34(1); see also Teel v. McCord, 394 N.W.2d 405, 407 (Iowa

1986). In this case, the first of the three alternative events to occur was

Evenson’s return to work in September 2010.

      The commissioner found Evenson returned to work on September

20, 2010, after several days off. This ended the first healing period as a

matter of law because it was the earliest of the section 85.34(1)

alternatives and because PPD “shall begin at the termination of the

healing period provided in subsection 1 [of section 85.34].” Iowa Code

§ 85.34(1)–(2).   Because we conclude the first healing period ended on

September 20, there is not substantial evidence in the record to support
                                            22

the commissioner’s finding the healing period benefits terminated in

November 2011.           See Teel, 394 N.W.2d at 406–07 (concluding a

claimant’s entitlement to PPD benefits commenced when the claimant

first returned to work after his 1974 injury—not after subsequent

intermittent healing period or after he finally “returned to work for good”

in 1981 after a series of surgeries). The date of Evenson’s first return to

work established the end of the healing period and the commencement of

PPD benefits because it was the earliest of the three triggering events

prescribed in section 85.34(1). Iowa Code § 85.34(1).

       Our determination that Evenson’s return to work in September

2010 established the commencement date for PPD benefits is not

precluded by the fact that he was entitled to TPD benefits for subsequent

weeks when he was medically restricted from working his regular hours.

In Presthus v. Barco, Inc., the claimant received healing period benefits

after a work-related injury. 531 N.W.2d 476, 480 (Iowa Ct. App. 1995).

He returned to work, but for approximately three weeks was unable to

work regular full-time hours and received TPD benefits.                           See id.

Presthus contended his entitlement to PPD benefits commenced upon his

return to work, which was the same time he would begin receiving TPD

benefits. Id. 6 The commissioner held PPD benefits commenced at a later

date—after the short period of temporary partial disability.                     Id.   The

district court and court of appeals concluded on judicial review that the

commissioner correctly delayed the commencement of PPD benefits until

the termination of the period of temporary partial disability. Id. at 480–

81.

       6Iowa   Code section 85.34(2) (1993) provided that “[c]ompensation for permanent
partial disability shall begin at the termination of the healing period provided in [section
85.34(1)].”
                                    23

      The court of appeals concluded Presthus could not “receive

temporary partial and permanent partial benefits for the same injury at

the same time” because it believed he could not be “both temporarily and

permanently disabled at the same time.” Id. at 480. This language from

the Presthus opinion was imprecise and requires clarification.     In the

world of workers’ compensation, the words “temporary” and “permanent”

have different meanings in different contexts.    In a medical sense, the

court of appeals could have reasoned that Presthus’s injury was not both

temporary and permanent in nature at the same time. Yet, the terms

“temporary” and “permanent” have different meanings and significance

when used in describing the several categories of workers’ compensation

benefits employees receive for work-related injuries.

      Some categories of compensation authorized under Iowa Code

chapter 85 are for the purpose of compensating injured employees

during weeks when they experience a temporary total or partial loss of

actual earnings (reduced or eliminated paychecks) caused by the injury.

See Iowa Code § 85.33(1) (providing for temporary total disability (TTD)

benefits for time lost from work for an injury that does not result in a

permanent disability); id. § 85.33(2) (providing for TPD benefits during

periods when the employee cannot return to work substantially similar to

the job performed at the time of the injury, but is able to perform other

work consistent with the injury); id. § 85.34(1) (providing for healing

period benefits for time lost from work for an injury that results in

permanent partial disability). Other categories of workers’ compensation

benefits serve distinctly different purposes and are owed when an

employee sustains an injury that causes a permanent partial loss of

either bodily function (scheduled member injuries compensated under

section 85.34(2)(a)–(t)), or earning capacity (body-as-a-whole injuries
                                   24

compensated under section 85.34(2)(u)), or when the employee sustains

a permanent total loss of earning capacity under section 85.34(3). Id.

§ 85.34. So, unlike in the medical world in which an injury is ultimately

either temporary or permanent, in the workers’ compensation world, a

single injury can result in an employer’s liability for both temporary and

permanent disability benefits.

      As we have noted, the various categories of workers’ compensation

benefits have distinct purposes. Thus, because TPD and PPD benefits

compensate for completely different categories of losses, an employee

who receives TPD and PPD benefits following a single workplace injury is

not paid twice for the same injury or loss. Perhaps in an effort to avoid

even the misapprehension that Presthus might be paid more than he was

entitled if he simultaneously was owed TPD and PPD benefits for a single

work-related injury, the commissioner in Presthus chose to commence

the claimant’s entitlement to PPD benefits after a brief period of TPD

benefits concluded. Presthus, 531 N.W.2d at 478. The court of appeals

affirmed that part of the agency’s decision on appeal, concluding

Presthus could not receive temporary and permanent disability payments

at the same time for the same injury.     Id. at 480.   We now conclude

Presthus was wrongly decided.

      In this case, Evenson’s entitlement to PPD benefits commenced

when he first returned to work because that is when his entitlement to

healing period benefits ended. See Iowa Code § 85.34(1)–(2) (providing

healing period benefits are owed “until the employee has returned to

work or it is medically indicated that significant improvement from the

injury is not anticipated or until the employee is medically capable of

returning to employment substantially similar to the employment in

which the employee was engaged at the time of injury, whichever occurs
                                           25

first,” and stating “[c]ompensation for permanent partial disability shall

begin at the termination of the healing period” (emphasis added)).

Because TPD benefits were paid to Evenson after he first returned to

work    following     the   injury,   we    conclude   the   commencement   of

Winnebago’s obligation to pay PPD benefits cannot be delayed until after

the TPD benefits subsequently terminated under the plain meaning of

section 85.34.

        Our conclusion that Evenson’s entitlement to PPD benefits was not

suspended beyond the end of the first healing period until after his

period of temporary partial disability ended poses no risk of duplication

or overpayment of benefits under the circumstances presented here. As

we have noted, TPD payments are calculated to replace part of Evenson’s

loss of actual earnings after he returned to work during a period of

partial disability.     The PPD payments, by contrast, are intended to

compensate him for a different loss: a permanent partial loss of his left

arm. Thus, although we conclude today that PPD payments can be owed

for periods during which a claimant was paid temporary partial

disability, no duplication of benefits arises. Our conclusion on this point

is also based in part on the fact that the principal purpose of the

statutory scheme establishing a date (the termination of the healing

period) for the commencement of PPD benefits is the calculation of

interest owed on such benefits for the duration of any delay of payment.

See, e.g., Teel, 394 N.W.2d at 407 (explaining that interest on PPD

benefits was owed from Teel’s first return to work on May 7, 1974—even

though he experienced subsequent intermittent healing periods and the

extent of his disability was not known until 1980—because “the employer

in effect [was] holding [Teel’s] money, and presumably earning interest on

it”).
                                       26

      We remand for a determination of whether the first healing period

began on September 3 or September 7. On remand, the commissioner

shall also make a new determination of the date PPD benefits

commenced consistent with this opinion.

      3. Amount of penalty. Iowa Code section 86.13(4) provides that, if

a delay in payment occurs without reasonable or probable cause or

excuse known to the employer, the commissioner shall award a penalty

in an amount up to fifty percent of the amount of benefits denied,

delayed, or terminated without such reasonable or probable cause or

excuse. Iowa Code § 86.13(4)(a). The arbitration award determined that

a twenty-five percent penalty was appropriate in this case, stating that

      defendants failed to provide reasonable cause or excuse for
      the delay and denial of healing period and temporary partial
      disability benefits discussed above and certainly did not
      provide notice of the reason for such delays and denials. A
      general award will be made again awaiting more specific
      calculations of the parties in a manner consistent with this
      decision. I do not find the use of the weekly rate of
      compensation of $468.62[7] unreasonable given the
      considerable fluctuations in claimant’s earnings each week.
      Also, the amount of the penalties shall be only 25 percent of
      the amounts delayed or denied as there was no showing of
      any prior violations of law by Winnebago or Sentry
      Insurance.

The commissioner’s appeal decision adopted the penalty determination,

concluding as follows:

            The arguments of the parties have been considered
      and the record of evidence has been reviewed de novo.

             Pursuant to Iowa Code sections 86.24 and 17A.15, I
      affirm and adopt as the final agency decision those portions
      of the proposed arbitration decision filed on August 21, 2012
      that relate to issues properly raised on intra-agency appeal.

      7On   December 7, 2011, Winnebago and Sentry paid Evenson ten weeks of
benefits based on the four percent impairment rating given by Dr. Yanish. The rate
paid was $468.62 per week plus interest in the amount of $179.58.
                                      27
         The calculations of claimant as to healing period benefits,
         temporary partial disability benefits, princip[al]/interest
         owed, and penalties assessed are adopted as if fully set forth
         herein.

The district court considered the penalty imposed by the commissioner.

It considered that Winnebago and Sentry had failed to include interest on

some benefits and had failed to show reasonable or probable cause for a
delay in paying some benefits. It also considered that the deputy found

the weekly rate paid by Winnebago and Sentry prior to the arbitration

decision was not unreasonable based on the impairment rating provided

by Dr. Yanish. It noted that Winnebago did not have a history of delayed

payments.        The district court noted that the penalty amount imposed

was half that allowed by the pertinent Code section.              The court

concluded that this was not a case of extreme denial or delay and held

there was substantial evidence in the record to support the twenty-five

percent penalty award. We agree with the decision of the district court

that twenty-five percent of the delayed and underpaid benefits is the

proper penalty amount. However, because we remand for a recalculation

of the healing period and PPD benefits owed, we also remand for a

recalculation of the amount of the penalty and interest owed based on

the new healing period and PPD dates.

         IV. Conclusion.

         We hold that an employer’s matching contributions to an

employee’s 401k plan are not spendable weekly earnings for purposes of

calculating weekly workers’ compensation benefits, and we therefore

affirm     the    commissioner’s   determination    of   Evenson’s    weekly

compensation rate.       We also hold substantial evidence in the record

supports the commissioner’s determination of the extent of Evenson’s

work-related disability. We reverse the commissioner’s determination of
                                      28

the commencement date for healing period benefits in September 2010

and his related determination of the commencement date for PPD

benefits.   We remand this case to the district court with the following

instructions: (1) to affirm the commissioner’s findings as to the weekly

benefit rate and the extent of permanent partial disability and (2) to

remand the case to the commissioner for a redetermination of the date

when healing period benefits commenced in September 2010, for a

redetermination of the date when healing period benefits ended and PPD

benefits commenced, and for a recalculation of penalty and interest

benefits based on the above dates.

      AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

      All justices concur except Mansfield and Waterman, JJ., who

concur in part and dissent in part.
                                   29

                                        #14–2097, Evenson v. Winnebago

MANSFIELD, Justice (concurring in part and dissenting in part).

      I join most of the court’s well-reasoned opinion, but differ as to

when permanent partial disability benefits should begin.

      I would affirm the commissioner’s determination that David

Evenson “achieved maximum medical improvement [MMI] on November

29, 2011” and that permanent partial disability benefits should

commence on November 30 of that year.       In declining to uphold this

determination, my colleagues overturn existing law which had prohibited

claimants from receiving temporary partial disability benefits and

permanent partial disability benefits for the same injury over the same

time period.   See 15 James R. Lawyer, Iowa Practice Series: Workers’

Compensation § 13:2, at 141 (2015).

      My colleagues do not dispute that substantial evidence supports

the factual finding of a November 29, 2011 MMI. Instead, they reverse

on a legal ground—essentially by dramatically expanding the prior

holding of Waldinger Corp. v. Mettler, 817 N.W.2d 1 (Iowa 2012). Prior to

Waldinger, the law had been that MMI strictly demarcated the line

between (1) the termination of temporary partial disability or healing

period benefits and (2) the commencement of permanent partial disability

benefits. See Ellingson v. Fleetguard, Inc., 599 N.W.2d 440, 447 (Iowa

1999), overruled by Waldinger, 817 N.W.2d at 8.

      In Waldinger, we carved out an exception for the situation when

the employee needs another surgery for his or her work-related injury

after attaining MMI.   See 817 N.W.2d at 8.       There the claimant had

attained MMI for an ankle injury in 2005, but missed three months of

work in 2007 due to arthroscopic surgery for the same work-related

injury. Id. at 3–4. The court of appeals held that the claimant was not
                                          30

entitled to healing period benefits for the time he missed work in 2007

because he had already achieved MMI in 2005.                 Id. at 4.   This court

disagreed, concluding that “the phrase ‘a healing period’ was not

intended by the legislature to limit healing period benefits to a single

period of temporary disability per injury.” Id. at 8. Thus, we overruled

Ellingson in part, holding:

        We now conclude our interpretation in Ellingson of section
        85.34(1) as a categorical prohibition of an award of healing
        period benefits for disability from work occurring after the
        date MMI has been achieved was erroneous, and we
        therefore overrule it.

Id. We continued,

              When, after achieving MMI, a claimant is rendered
        temporarily disabled from work, as Mettler was, as a
        consequence of surgical treatment provided under section
        85.27 for a work-related injury, a new healing period begins
        under section 85.34(1).

Id. We added, “We see no principled reason why Mettler, or any similarly

situated claimant, should be disqualified from a healing period remedy

when ordinary and necessary medical care for a work-related injury
temporarily removes them again from the work force.” Id. at 8–9.

        Today’s decision is an illogical and ill-considered expansion of

Waldinger. Contrast the Waldinger facts with the situation here. In the

present case, Evenson suffered a work-related left elbow injury in May

2010. He was off work in September 2010 and again from April to June

2011. He achieved MMI in November 2011. The commissioner awarded

Evenson the following:

              (1) healing period benefits for the two time spans he
        was off work in September 2010 and April-June 2011, 8

        8As   noted by the majority, clarification is needed regarding September 3–7,
2010.
                                       31
              (2) temporary partial disability benefits compensating
        for various time periods between June 2010 and October
        2011 prior to the attainment of MMI when Evenson was
        working at his prior job but could not earn overtime
        compensation because of his condition, and

              (3) permanent partial disability benefits as of the
        attainment of MMI in November 2011.

        Thus, unlike Waldinger, this is not a case where the claimant
achieved MMI, became eligible for PPD benefits, but then had a

subsequent episode where he missed time from work because of medical

treatment for the same work-related injury. Rather, the claimant—prior

to attaining MMI—had a combination of time off work and reduced hours

for   which    he   already   has   been    given   compensation    through   a

combination of healing period benefits and temporary partial disability

benefits.     I see no unfairness in the outcome approved by the

commissioner. Yet the court now holds that Evenson is also entitled to

PPD benefits dating back to when he returned to work on September 20,

2010.

        There are several problems with what the court has done. To begin

with, it is inconsistent with the statutes.         Iowa Code section 85.34(1)

(2011) regarding “healing period” provides that the healing period begins

on the first day of disability following the injury and continues

        until the employee has returned to work or it is medically
        indicated that significant improvement from the injury is not
        anticipated or until the employee is medically capable of
        returning to employment substantially similar to the
        employment in which the employee was engaged at the time
        of injury.

Section     85.34(2)   provides,    “Compensation      for   permanent   partial

disability shall begin at the termination of the healing period provided in

subsection 1.” Id. § 85.34(2). Section 85.33(2) provides that temporary

partial disability benefits are “payable, in lieu of temporary total
                                     32

disability and healing period benefits, to an employee because of the

employee’s temporary partial reduction in earning ability as a result of

the employee’s temporary partial disability.” Id. § 85.33(2).

      Putting these statutes together, they indicate that when an

employee is receiving temporary partial disability benefits because he or

she is working fewer hours due to a workplace injury, this time period is

regarded as part of “the healing period” for section 85.34 purposes, and

only at the conclusion of this overall healing period would permanent

partial disability benefits commence. That is why the temporary partial

benefits are “in lieu of” healing period benefits. See id. In fact, the words

“in lieu of” in the statute make no sense otherwise. In short, when an

employee like Evenson suffers a workplace injury and thereafter has a

combination of time off work and reduced hours until he achieves MMI,

that entire pre-MMI time period is treated as “the healing period” for

purposes of determining when PPD benefits commence.

      The majority’s reading of the statutes also means an employee can

have a “temporary” disability and a “permanent” disability based on the

same injury at the same time.      This seems to be a very incongruous

reading of the statutes and one that should be avoided. Additionally, the

majority fails to explain why the legislature expressly provided that an

employee could receive medical and death benefits “in addition to” PPD

benefits, see id. § 85.34(2) (“The compensation shall be in addition to the

benefits provided by sections 85.27 and 85.28.”), but did not say an

employee could receive temporary disability payments in addition to PPD

benefits. Surely, if the legislature wanted to indicate that an employee

could receive temporary partial disability benefits and PPD benefits

covering the same time period, it would have expressly said so, given that

it made express reference to the availability of benefits under sections
                                     33

85.27 and 85.28—situations where the case for awarding additional

benefits is far clearer.

      As I’ve already suggested, the majority’s approach leads to a

questionable policy outcome—namely, the duplication of benefits.

Evenson has already been awarded temporary partial disability benefits

for the time period before November 2011 to compensate for any “partial

reduction of earning ability” during that time. See Iowa Code § 85.33(2).

Now the court wants the commissioner to go back and further

compensate him for any loss of earning capacity during the same period.

Until now, our law had been clear:

            In this particular case, Presthus was receiving both
      temporary partial and permanent partial benefits for the
      same injury. It follows that, in order to receive both benefits
      at the same time as Presthus suggests, Presthus’ injury
      would have to cause him to be both temporarily and
      permanently disabled at the same time.            We are not
      persuaded that such a result is attainable. We conclude
      Presthus cannot receive temporary partial and permanent
      partial benefits for the same injury at the same time.

Presthus v. Barco, Inc., 531 N.W.2d 476, 480 (Iowa Ct. App. 1995). In

Presthus, no PPD benefits commenced until “after all of the temporary

partial benefits had been paid”—exactly the rule that I contend should be

followed here. Id.

      Presthus is not the only decision that the court overrules today.

The court also discards the analytical framework we set forth in

considerable detail in one of our own opinions just six years ago.      In

2010, in Bell Brothers Heating & Air Conditioning v. Gwinn, we explained

the interplay between temporary and permanent disability awards. 779

N.W.2d 193, 200–01 (Iowa 2010). We said,

            Although early workers’ compensation law made no
      distinction between temporary and permanent disability, our
      workers’ compensation law now provides for separate awards
                                    34
     based on the temporary and permanent nature of a
     disability. The difference between awards for temporary and
     permanent disability can be best illustrated by considering a
     typical industrial injury.

           Normally, an industrial injury gives rise to a period of
     healing accompanied by loss of wages. During this period of
     time, temporary benefits are payable to the injured worker.
     Generally, these benefits attempt to replace lost wages (and
     provide medical and hospitalization care) consistent with the
     broad purpose of workers’ compensation: to award
     compensation (apart from medical benefits), not for the
     injury itself, but the disability produced by a physical injury.
     In Iowa, these benefits are spelled out in Iowa Code sections
     85.33, 85.34, and 85.37. . . .

           . . . Any disability that remains after stabilization of
     the condition gives rise to “either a permanent partial or a
     permanent total award.” In other words, maximum physical
     recovery marks the end of the temporary disability benefits,
     and at that point, any permanent disability benefits can be
     considered.

            This review of temporary and permanent disability
     awards reveals that a fundamental component of a
     permanent impairment is stabilization of the condition or at
     least a finding that the condition is “not likely to remit in the
     future despite medical treatment.”            In other words,
     stabilization is the event that allows a physician to make the
     determination that a particular medical condition is
     permanent.

           The symmetry of the process reveals that a claim for
     permanent disability benefits is not ripe until maximum
     medical improvement has been achieved. Until that time,
     only temporary benefits are available.

Id. (citations omitted) (first quoting 4 Arthur Larson & Lex K. Larson,

Larson’s Workers’ Compensation Law § 80.03[2], at 80-6 (2009); and then

quoting American Medical Association, Guides to Evaluation of Permanent

Impairment 27 (6th ed. 2008)).      Bell Brothers clearly forecloses the

interweaving and intermixing of temporary and permanent benefits
                                          35

approved by today’s opinion. Regrettably, the court today fails even to

discuss Bell Brothers. 9

       Instead of Bell Brothers, the court cites to a thirty-year-old

decision—Teel v. McCord, 394 N.W.2d 405 (Iowa 1986).                            Several

important points about Teel should be noted. First, the facts of Teel are

different from those before us today in that there were no temporary

partial disability benefits.       Id. at 406.     There were simply a series of

healing periods when the employee was off work. Id. Furthermore, in

Teel the PPD interest payments were suspended during each of those

healing periods, the upshot being that PPD benefits were not due during

those periods. Id. Today, by contrast, the court decides that PPD should

be paid continuously once the first healing period ends. In this respect,

today’s decision is inconsistent with Teel. Third, the only argument the

employer raised in Teel was the legally insufficient one that interest on

PPD benefits should commence as of the date of the award. Id. Thus,

none of the issues involved in this case were squarely presented. Lastly,

the language from Teel on which the majority relies today is simply

irreconcilable with Bell Brothers.
       In the end, today’s opinion rests on a nonsequitur.                  The court
concedes that its approach results in multiple healing periods prior to
MMI, not just one healing period, even though the statute refers to “the”
healing period. See Iowa Code § 85.34(2). This means the court must
determine      which     healing     period      should    be    selected     for    the


        9Bell Brothers highlights the practical problems with today’s decision. The court

holds today that PPD benefits should have commenced when Evenson first resumed
working in September 2010. But how was anyone to know then that Evenson had
suffered a permanent disability? That is why the law allows temporary partial disability
benefits to compensate for a reduction in income until it is determined that MMI has
been attained.
                                        36

commencement of PPD benefits.           The court then states the end of the
first healing period must be chosen because each healing period ends as
soon as the employee returns to work.          Why?   The former conclusion
does not follow from the latter. To put it simply, the court has confused
two issues: (1) when each healing period ends and (2) which healing
period must be chosen for commencement of PPD benefits.
      The worker’s compensation statutes, Presthus, Bell Brothers,
fairness, and logic all point in one direction: When an employee suffers
an industrial injury resulting in a combination of time off work and
reduced hours, and then attains MMI, the employee should receive
temporary partial disability and healing period benefits for the pre-MMI
timeframe, and PPD benefits commencing thereafter.
      The court’s opinion is not clear, but to the extent the court is
indicating that penalty benefits could be awarded on any of the PPD
benefits, I also disagree with that conclusion. Having modified the law as
to when PPD benefits commence, it would be unfair for the court to
subject the employer to a penalty for its lack of clairvoyance regarding
the court’s own modification of the law.          See Iowa Code § 86.13(4)
(authorizing a penalty when there was a denial or a delay of payment
“without reasonable or probable cause or excuse”).        The commissioner
did not award any penalty on the PPD benefits, but the court today
upholds a penalty on “the delayed and underpaid benefits” and remands
for “a recalculation of the amount of the penalty and interest owed based
on the new healing period and PPD dates.”
      While I join the rest of the court’s opinion, I fear that the foregoing
aspects of today’s decision misread the statutes, unnecessarily overturn
precedent, will produce confusion and double recoveries, and will
ultimately require a legislative fix.
      Waterman, J., joins this concurrence in part and dissent in part.
