Whether you work in a warehouse or an office on the 87th floor, we all run the risk of suffering an on-the-job injury or illness. Some professions carry higher risk compared to others, but that doesn’t mean employees in “less” risky jobs should face neglect in their workers’ compensation case.
In case of an injury at work, you’re entitled to certain benefits to cover your medical care expenses and lost wages. Sometimes, these benefits come in the form of regular workers’ compensation benefits paid through your employer’s insurance company. But what happens if you are offered a lump sum settlement instead?
Before accepting a settlement offer, you need to understand the factors in play.
The Basics Of Workers’ Compensation Case Settlement
At first glance, a settlement offer looks enticing. You receive one lump sum (sometimes hundreds of thousands of dollars) which you will then use to cover your medical bills and lost wages. If there’s anything left over, you get to keep it.
Sounds great, right? Here’s why that offer deserves a second look.
Types of Workers’ Comp Settlements
In most workers’ compensation cases, the insurance company will offer a “full and final release of liability” settlement.
Taking this offer will settle your workers’ compensation case for good and you will not be permitted to receive any more benefits, file any new lawsuits (Petitions for Benefits), or appeal your case. This will also terminate your right to file a workers’ comp case for any workplace injuries that haven’t been identified yet, such as injuries due to overuse or overexertion.
More preferred—but extremely rare—is the “partial release” settlement, which would allow you to still receive some medical benefits.
It’s worth noting that a judge needs to approve the settlement to ensure you’re getting a fair deal (and not being strong-armed into accepting it) if you are unrepresented.
If you are represented, the judge still has a role to play in making sure that the attorney’s fees and costs are reasonable and that, if you owe child support, proper allocation of some of the settlement funds has been made out of your settlement toward your child support obligations.
Unlike figuring your workers’ comp pay rates, there is no formula that is used to calculate your settlement amount. Rather, your employer or the insurance company will base their offer on a number of different factors:
- the extent and severity of your injuries;
- whether or not you are permanently disabled as a result of your injury;
- whether you are capable of going back to work;
- any outstanding medical bills;
- whether future medical treatment will be needed (and how much).
This is just a small list of the various different factors that will be examined in your workers’ compensation case.
Some injured workers prefer to wait until they reach Maximum Medical Improvement (MMI) before accepting any settlement offer. Reaching your MMI and receiving a Permanent Impairment rating (if applicable) will help you understand the extent of medical treatment you will need going forward.
However, the value of your case from a settlement standpoint is generally based on what the case is likely to cost the insurance company (not you) if the case does not settle. If you wait until most or all of the anticipated benefits you could receive have been paid, the value of your case from a settlement perspective will be lower than it could have been if settled earlier.
Of course, there is always a risk when settling your case. Your injuries could be worse than believed and your future treatment could cost more than anticipated. However, once the case is settled, you are responsible for covering all future treatment relating to your accident and dealing with any lost wages that result from your injuries on your own.
What to Consider
Because every workers’ compensation case is unique, no article can tell you for certain whether to accept a settlement offer. But there are some factors to consider that may have a bearing on your decision.
As a layperson, if you have not specifically addressed the anticipated future medical treatment with your doctor, it will be difficult for you to understand how expensive your future medical treatment could be. You should also consider whether you have health insurance, plan on obtaining health insurance, and whether or not that insurance policy will allow you to utilize that coverage for your future treatment.
Each policy is different, so you will need to address this with the insurance company on a case-by-case basis. Some policies may permit use but have a set amount of time that you must wait before using the coverage for treatment of your industrial injuries.
The last thing you want is for your settlement money to run out when you still have healing to do.
Another thing to consider is the lifetime effects of your injury. Accepting a settlement offer that releases the insurance company from all future liability will mean that you are 100% financially responsible for your medical care.
Even if you have reached your MMI, this doesn’t mean you will never have to visit a doctor again. It just means that no further treatment is anticipated to provide you with lasting improvement from your injuries. In other words, it means your condition is as good as it’s going to get.
Continued treatment certainly may be necessary to maintain your health as certain injuries, illnesses, and conditions will require lifetime care. This should be taken into consideration when deciding whether to accept a workers’ compensation settlement.
Lastly, if you haven’t already, you should meet with a qualified workers’ compensation attorney to discuss the details of your case. A lawyer will not only have the experience necessary to advise you on the settlement offer, s/he will be able to advocate for you during mediation or litigation.
Facing a lifetime of medical needs is too serious a prospect to deal with on your own. Having an attorney on your side can help you navigate the ins and outs of a delicate situation.
Guidance For Your Workers’ Compensation Case
Workers’ compensation settlements can be tempting because they are guaranteed. A lump sum or structured settlement takes away some of the uncertainty that comes with litigation. But once the process is complete, there’s no going back.
But your workers’ compensation case is not something to be taken lightly. You should not sign any workers’ compensation settlement agreement without the guidance of an experienced workers’ comp attorney.
Brian D. Tadros has been working exclusively in workers’ compensation cases for more than 14 years. If you have received a workers’ comp settlement offer and have questions about your next steps, contact our office today for a free consultation.