The workers’ compensation system provides a method for compensating victims who suffer injuries while on the job. Each state is required to establish a workers’ compensation system and has broad discretion in deciding the specific rules and procedures that it will use. Although each state’s workers’ compensation system is conducted similar to the judicial system, each system operates independently from one another. In fact, the workers’ compensation system requires victims who receive benefits to give up their right to sue their employer for their injuries. Although the judiciary and the workers’ compensation systems are independent, there are some instances in which a party to a workers’ compensation case can appeal a decision to a judicial court. To do so, however, the party must first exhaust any appellate remedies available to him or her through the workers’ compensation system.
After filing a workers’ compensation claim, the injured worker will typically undergo a medical examination to determine the extent of his or her injuries. Each state uses a system of classifications to determine the type of benefits that the individual will receive and for how long he or she will receive them. The factors that the doctor will assess include whether the injury is partial, total, temporary, or permanent.
Since the progression of some injuries is hard to predict, a worker who settles their workers’ compensation claim should factor in the possibility of the worst-case scenario.
Workers’ compensation insurance companies have the option to dispute a doctor’s determination of the nature and extent of the injury. Naturally, a total and permanent disability will result in a larger benefits award than a temporary and partial injury. After an employee has received a benefits award, the insurance company is typically required to pay compensation for the worker’s medical care and treatment in addition to the disability payments. Some insurance companies may wish to negotiate for a lump sum settlement in lieu of weekly payments as required by many state’s workers’ compensation laws. Workers also have the option of negotiating a structured settlement in which the insurance company will provide a series of lump sum payments over predetermined periods of time.
Advantages and Disadvantages of a Workers’ Compensation Settlement
There are a number of advantages to negotiating and accepting a workers’ compensation settlement. For example, a workers’ compensation insurance company may wish to take the matter to trial. At trial, the workers’ compensation judge could award the worker a weekly benefit installment that is less than what the insurance company offered through the settlement agreement. A settlement agreement guarantees a certain amount of benefits without the risks of going to trial. Accepting a settlement also saves the worker a substantial amount of time and resources. Trial is a lengthy and stressful process that can take its toll on workers who are already suffering severe injuries.
Of course, there are many downsides and risks to accepting a settlement. For example, a medical condition may result in complications necessitating further treatment or surgery after the settlement. Since the employee entered into the settlement agreement, however, the employee is unable to seek additional benefits from the insurance company. Some settlements include a provision that allows the worker to preserve his or her right to future medical treatment even after the settlement agreement has been executed.
When determining the appropriate amount of a settlement, it is crucial to include any medical expenses that have been incurred and the amount of any projected medical needs. Many disabilities like back injuries and amputations require ongoing medical treatment like physical therapy. Additionally, the injured worker should anticipate the medical expenses he or she will incur in the event that his or her medical condition worsens unexpectedly.
Liens and Offsets
A worker who settles their workers’ compensation claim should understand whether a portion of the settlement will be owed to doctors, lawyers, or government agencies (such as Medicare) and whether the settlement will result in an offset of other benefits, such as SSDI payments.