Payment of compensation by insurer prohibited before required; recovery of overpayment by insurer

1. An insurer shall not provide compensation to or for an employee or the dependents of the employee before the compensation is required to be paid pursuant to the provisions of this chapter. 2. If, within 30 days after a payment is made to an injured employee pursuant to the provisions of this chapter, the insurer determines that it has overpaid the employee as a result of a clerical error in its calculation of the amount of payment or as a result of using improper or incorrect information to determine the employee’s eligibility for compensation or to calculate the amount of payment, the insurer may deduct the amount of the overpayment from future benefits related to that claim to which the employee is entitled, other than medical benefits, if: (a) The insurer notifies the employee in writing of its determination; (b) The insurer informs the employee of the right of the employee to contest the deduction; and (c) The employee fails to contest the deduction or does so and upon final resolution of the contested deduction, it is determined that an overpayment was made. 3. Any deductions made pursuant to subsection 2 must be made in a reasonable manner which does not cause undue hardship to the employee.