Understanding A Worker’s Comp Settlement
Getting injured on the job is scary. Both for the employee and the employer, and both parties want to see the matter resolved as quickly as possible. But for injured workers that have a lasting impairment, they will likely need to negotiate some type of worker’s comp settlement.
Types Of Settlements
Generally speaking, a worker’s comp settlement can be negotiated in one of two ways: either as a lump sum payment, or paid out over time.
Lump Sum Payment: When negotiating a lump sum payment, it means you will no longer receive weekly permanent disability payments. In addition to future amounts the insurance company will owe you for permanent disability payments and medical care, you can also settle any disputed amounts, past-due temporary disability payments, and unreimbursed medical expenses.
Structured Settlement: In a structured worker’s comp settlement, you’ll receive payments over a period of time. In these settlements, you don’t need to give up all of your future rights to medical care, unlike a lump sum settlement.
Reasons To Agree To A Settlement
It’s important to remember that by negotiating and accepting a worker’s comp settlement, you are are forgoing the right to a worker’s comp hearing or trial with the insurance company. At a hearing you may or may not be awarded more money than the insurance company was willing to settle for upfront.
With that said, many people consider a worker’s comp settlement a good deal because it guarantees benefits without the risks of a trial. And in some states, you can’t receive a lump sum payment after you win at trial; you’ll be limited to receiving weekly payments for a number of weeks or years.
The other potential advantage of settling is that an insurance company will often offer additional money in exchange for you waiving your rights to future benefits that you may not even need. For example, if the doctors tell you there’s a 10% chance you’ll need surgery for your injury in the future, the insurance company will include part of that cost in your settlement, which you can then pocket with a 90% chance you’ll never need the surgery at all.
Reasons Not To Take A Settlement
The primary reasons not to accept a worker’s comp settlement are:
- Waiving your right to trial: By waiving your right to a worker’s comp hearing or trial, you are forgoing the chance of being awarded a higher amount than what the insurance company is offering. While it’s possible for a judge to award less than the settlement amount offered, it doesn’t happen often.
- Medical treatment rights: If there’s a high chance you’ll need surgery or expensive medicines in the future, you may not want to waive this right by settling it for a certain amount. If you do settle this right and you end up needing medical care, you may have trouble getting your health plan to cover it.
Some also consider taking a lump sum payment as a disadvantage of worker’s comp settlement, simply because so many people spend all the money quickly and then are left with no money and no recourse if the injuries get worse and require additional treatment.
By taking payouts over time, it guarantees there will always be some money available each month to help cover basic needs and defray medical costs.
Negotiating Your Worker’s Comp Settlement
Negotiating a worker’s comp settlement is a very complex legal scenario. The exact wording of the agreement can have serious ramifications for how your benefits are paid and how long payments will last for.
By hiring an experienced employment law attorney, you’ll get help with navigating each stage of the settlement process, should you decide to go that route, and your attorney will work on your behalf to ensure you get the best terms possible.
In most states, a workers’ comp judge will have to review your settlement before it becomes official. This will take place at an informal conference. If you’re not represented by a workers’ comp lawyer, the judge may attempt to make sure the settlement is fair to you.
But without knowing your medical history, the judge is limited in helping you. It’s better to consult with an attorney in your area who works with workers’ compensation applicants to find out if your insurance company’s settlement offer is a fair one.
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