Injured employees in Michigan who receive workers’ compensation benefits can opt to exchange the value of their future workers’ comp benefits in exchange for a lump sum settlement. However, does this always benefit the worker?
Jay Trucks explains more about workers’ comp settlements for those who are considering this legal option after being injured on the job.
Have you suffered a work-related injury? Our Flint workers’ compensation lawyers are ready to help you seek a workers’ comp claim or a cash settlement. Call our law offices anytime, night or day, to schedule a free case review to discuss your potential legal options.
Workers’ Comp Settlement Versus Receiving Benefits
In Michigan, like most states, injured employees may be eligible to receive workers’ comp benefits following a job-related injury. Benefits the employers’ workers’ comp insurance carrier must pay include:
- Costs for all medical care related to the occupational injury or illness
- Wage loss benefits amounting to 80 percent of weekly earnings – after taxes – for the highest wages earned 39 weeks prior to the date of the injury or illness
- Vocational rehabilitation benefits
Alternatively, injured employees may choose to accept a lump-sum settlement in lieu of receiving regular workers’ compensation benefits. A lump-sum workers’ comp settlement will include a calculated value for the benefits you were expected to receive. This calculation takes many factors into consideration, such as the severity of your injuries, prognosis for recovery, and when you may be able to return to work.
In Michigan, workers can pursue a lump-sum settlement as soon as six months following a work-related injury. However, in many cases, that may be too soon. Attorneys recommend waiting until you have reached your maximum medical improvement (MMI) to help ensure your settlement is sufficient to help you in your recovery.
Benefits and Risks
There are both benefits and risks if you choose to settle a workers’ comp claim instead of receiving ongoing benefits while you recover.
Benefits to Workers
Injured employees who choose to settle their workers’ comp claims in a lump-sum cash payment may benefit from:
- Lump-sum settlements that are tax-free
- The ability to choose their own path for medical care
- Not being subject to independent medical exams
- Avoiding being harassed by the insurers
- Using the money to obtain vocational retraining, medical costs, transitioning to a new job, and more
- Accepting another job without worrying about losing benefits
- Moving forward with your life
Risks of Taking a Settlement
If you choose a settlement over weekly workers’ comp benefits, however, there are also some risks to consider before making your decision:
- If you seek a lump-sum payment before reaching your MMI you could end up with a settlement that is too low.
- You give up the right to receive any additional benefits in exchange for accepting a one-time cash settlement.
Not sure which option will best suit your needs? Schedule a free initial consultation with one of our qualified attorneys to discuss your situation and learn more about workers’ comp settlements.
How is a Settlement Amount Calculated?
A workers’ comp settlement should take into consideration the value of the benefits you expect to receive. That calculation includes a combination of the following types of benefits/compensation:
- Current medical costs
- Future expected medical expenses
- Lost wages
- Diminished or lost future earnings
However, before your settlement can be accurately calculated, you will need to understand all the contributing factors that impact the value of your potential settlement. We strongly recommend that you do not agree to a settlement amount without first speaking with an attorney.
Having an experienced attorney who understands your medical needs – as well as the legal issues – can make a difference in your settlement outcome. Those who hire an attorney to represent their interests often achieve larger settlements than those who do not.
What Is the Average Workers’ Comp Settlement in Michigan?
According to the Workers’ Disability Compensation Agency, the average workers’ compensation settlement in Michigan is just over $62,000. This is not a lot of money, especially when you consider that you may need a lifetime of healthcare and rehabilitation or if you will never be able to work again or in the same capacity you did previously.
However, keep in mind that this is just an average. It’s possible to get much a higher settlement if you have substantial injuries or need far more in wage replacement. Work with an experienced attorney who can help collect the evidence needed to show the full extent of your injuries and their probable impact on your future. Never accept an initial settlement offer, as you will likely miss out on much-needed compensation.
What’s the Workers’ Comp Settlement Process in Michigan?
The workers’ comp settlement process in Michigan begins with the redemption hearing. This is where a magistrate will hear facts about the case and review supporting medical records to determine whether to approve the settlement. You will need to fill out an affidavit and various other forms that will help the magistrate decide if the settlement is fair and proper for your circumstances.
If the magistrate approves the settlement, there will be a 15-day appeal period before any payments are made. During this time, either side may cancel the settlement citing legal reasons or other just cause–but simply changing your mind probably won’t suffice. If neither side cancels the settlement, checks will typically be mailed out 7-10 days following the redemption order. It’s even possible to waive the 15-day appeal period if both sides agree.
How Much Does It Cost to Hire a Workers’ Comp Attorney in Michigan?
Most workers’ compensation attorneys in Michigan, like the ones at Jay Trucks & Associates, work on a contingency fee basis. This means the lawyer will handle your claim without charging you anything upfront or billing you for their hourly fees. Instead, they will take a percentage of the settlement once you receive it. If the attorney isn’t successful in helping you get a workers’ comp settlement, you should owe them nothing. Percentages can vary depending on factors involved with your case.
Be sure to discuss the lawyer’s fee schedule and how they will receive payment when you meet during your free initial consultation. Also, gauge how effective you think they will be in helping you get the maximum settlement possible.
How Long Does the Workers’ Comp Settlement Process Take in Michigan?
The time it takes to receive a workers’ comp settlement in Michigan can vary depending on various factors. The state won’t even allow you to pursue a settlement until six months after the date of your injury, and it can take at least a year from the pre-trial date to reach a settlement. If your case goes to trial, the process could take even longer.
As stated, you also want to ensure you reach MMI before accepting any settlement. Reaching MMI takes time as well, but you don’t want to rush to accept a settlement until you and your attorney have carefully and thoroughly evaluated the extent of your injuries and how much compensation you will need.
Our Trusted Lawyers Are Here to Help
Making the choice of a workers’ comp settlement over regular benefits is a difficult decision. Having input from a knowledgeable attorney who has an in-depth understanding of the law and how to protect your best interests may benefit your claim.
Jay Trucks has been representing the injured in Michigan for decades. We have recovered millions in compensation for our clients, including a $1,148,320 workers’ comp settlement for an injured floor installer. We are prepared to help you obtain a maximum settlement for the injuries you suffered at work.
Contact our firm 24/7 to schedule a free case review. There is no obligation to hire our services, but if we do represent you, there is nothing to pay up front. We collect no payment until the case concludes and only when we recover compensation for you.