As an alternative to receiving weekly payments, an injured worker may be able to arrange a lump sum settlement of their workers’ compensation claim. Another type of settlement provides them with structured payments during a certain time period. Reaching a settlement can be an efficient way to resolve a claim, providing you with benefits more promptly than if your case went to a hearing. It also avoids the risk of receiving a lesser amount of benefits from a judge. A worker sometimes may receive more money from a settlement than they ultimately need if certain potential treatments never prove necessary.
However, a settlement is not the right resolution for everyone. If the scope of your condition remains unclear, you may not want to agree on a set figure for your future medical costs. This could leave you without reimbursement for expensive treatment that was not anticipated. Also, some workers may struggle with the temptation to spend much of the settlement immediately. If they are unable to find employment in the near future, they might not have enough benefits to offset their lost wages.
Covering Bills for Medical Treatment
A settlement should cover bills for treatment that you have previously received. Injured workers may have the option to choose between accepting a lump sum settlement for their future medical costs and limiting the settlement to disability payments. Reaching a lump sum settlement for future medical costs can be risky because it may result in waiving your right to get reimbursed for unexpected costs. Some states have taken this risk into account and do not allow workers to waive this right.
A lump sum settlement should factor in the possibility that the worker will experience the worst-case scenario.
If you are willing to accept a lump sum settlement for future medical costs, you will want to calculate these costs carefully. Depending on your condition, they may include surgery, hospital treatment, physical therapy, and prescriptions. You should plan on the worst situation possible and ask for a substantial percentage of the costs that you would incur if it occurs. The insurer will not agree to pay all of these costs, but you may be able to get a reasonable amount in a settlement if you have strong medical evidence supporting your position.
Covering Permanent Disabilities
Even if you are not completely unable to work, you may be entitled to permanent disability payments based on a partial disability. This means that you are limited in your job tasks or work capacity, which could affect your salary for the rest of your career. Also, scarring or disfigurement will be considered a permanent disability, regardless of whether it affects your ability to work. The insurer may use your permanent disability rating as the basis for a disability award in a settlement, but you can potentially negotiate that amount upward.
If your disability does completely prevent you from working, this means that it is a permanent and total disability. Much more money is at stake when this happens, and the gravity of the situation means that you probably should hire an attorney to represent you. If you never will be able to earn income again, you should make sure that you not only maximize your workers’ compensation benefits but also pursue any additional sources of support for which you may be eligible. For example, you may have a claim for Social Security Disability Insurance (SSDI).
Covering Temporary Disabilities and Late Payments
Sometimes an insurer will not initially compensate an injured worker for the wages that they lost while they were recovering from a temporary disability. Even if you have fully recovered and can work at your normal capacity, you should receive compensation for the missed payments. You may even be able to claim a penalty for late payments, which is a percentage of the amount that was missed.
Finalizing a Settlement
Before you conclude a settlement with a workers’ compensation insurer, you should make sure that you understand its terms. You will want to know whether the settlement closes your claim, or whether you can reopen the claim to get reimbursement for future medical costs. Also, you should know whether the settlement will result in an offset of any SSDI payments or other disability benefits that you receive. A settlement amount sometimes will include payments that were previously made, so you should determine whether you are receiving the full amount or whether the amount of the settlement represents the total of past and present payments.
Attorneys’ Fees and Liens
Before agreeing to a settlement, a worker should understand whether any of the settlement is owed to doctors, lawyers, or government agencies (such as Medicare). For example, a doctor may have agreed to collect payment only after the workers’ compensation case was resolved and must now be paid with settlement funds.
Since a workers’ compensation settlement can be complicated, and critical rights are at stake, most states require a judge to review it before it is final. The judge will focus on whether the amount is fair to the injured worker. However, you should be aware that the judge will not know all of the details of your case, so they cannot help you to the same extent as your own attorney.