Dealing with a workers’ compensation claim can be long and difficult. Many facets can be hard to understand, including determining whether you can return to your job or have the right to much-needed benefits. One of the most common questions people have when undergoing this process is when workers’ comp will offer a settlement.
If you have been injured at work, reach out an experienced workers’ comp lawyer for legal guidance and maximum benefits.
Understanding Workers’ Compensation
According to the U.S. Bureau of Labor Statistics, private industry employers report around 2.6 million workplace injuries or illnesses annually. Slightly more than a million of these injuries require the worker to miss at least one day of work.
Before diving into the particulars of the settlement process, it’s essential to have a foundational understanding of workers’ compensation.
Workers’ compensation—also known as workers’ comp—is a government-mandated program that requires most employers in the United States to purchase an insurance policy that provides workers with certain benefits if they suffer an on-the-job injury or illness.
By accepting these benefits, the employee waives their right to file a lawsuit against their employer to compensate for medical expenses or income lost because of their inability to work during their recovery period.
Workers’ compensation plays a key role in workplace injuries. It aims to ensure an injured employee can access the necessary medical care and financial support during recovery. The coverage is a no-fault system, meaning the employee can generally receive the benefits regardless of who caused the accident.
Sometimes insurers can deny workers’ compensation, however, or it is not the appropriate avenue for compensating injury-related expenses and losses.
Employees’ injuries in the workplace due to the negligence of a third party (someone who is not your employer or coworker) usually result in a personal injury claim against the at-fault party’s insurer rather than a workers’ compensation claim.
Insurers can deny a workers’ comp claim if the injury occurred outside the workplace, while the claimant was under the influence of alcohol or drugs, or during horseplay. They can also deny it if they conclude the worker obtained the injury intentionally to collect benefits.
Workers’ compensation covers many injuries, including fractures, burns, and conditions that may develop over time due to work exposure, such as carpal tunnel syndrome or respiratory problems. Policies may even cover psychological injuries such as stress-related disorders if the work environment causes or contributes to them.
As the National Academy of Social Insurance explains, there are four types of income replacement benefits:
- Temporary total disability: These benefits apply when the worker’s injury prevents them from performing work-related tasks during recovery. However, they can resume these tasks once their recovery is complete.
- Temporary partial disability: In some cases, an injured worker can perform certain tasks while recovering but must limit the time they spend on them during their recovery. Temporary partial disability benefits aim to replace earnings the worker lost because they had to accept a lower-paying position or limited hours temporarily.
- Permanent total disability: Permanent total disability benefits aim to permanently replace the worker’s income when they suffer a disabling injury that prevents them from working in any job. These benefits are typically available until the worker reaches retirement age and can seek social security benefits.
- Permanent partial disability: Many workers with permanent, disabling injuries can no longer perform the job they did before their work-related accident or illness occurred, but they can do certain tasks and receive some income. Permanent partial disability benefits fill the gap between what the worker earned before the injury and after it.
Workers’ compensation insurance policies typically provide death benefits for dependents of workers who die due to their on-the-job injury or illness.
As the U.S. Department of Labor explains, workers’ comp programs also provide vocational rehabilitation, which commonly involves job skills training and counseling to assist injured workers in finding employment that accommodates their injuries. While employers must try to provide reasonable accommodations for disabled workers, it is not always possible.
The Process of Workers’ Compensation
The first step in the workers’ compensation process is to report your injury to your employer and seek medical treatment. State workers’ comp laws vary. Some states allow workers to choose their physician; others designate a physician that the employer or their insurance provider approves. If you suffer an injury that requires immediate emergency treatment, this should occur at the nearest healthcare facility.
It’s crucial to report any workplace injury to your supervisor immediately, no matter how minor it seems initially, as this creates the necessary documentation to prove your injury was work-related. Your employer must report the injury to their workers’ compensation insurance provider. The insurer must promptly provide you with information about the benefits you may be eligible for—they typically have up to 20 days to do so.
You must also file a workers’ compensation claim. This is a formal request to the insurance company for compensation benefits. Insurance companies play a significant role in workers’ compensation, as they typically pay the benefits. They also have the power to approve or deny claims based on the information you provide and their independent investigations.
Once you file the claim, the process of approval begins. This may include evaluating your medical records, interviews, and even an independent medical examination.
Most approved workers’ comp claims start with the provision of temporary total disability payments, which are generally two-thirds of your average weekly earnings. You can only receive these benefits for a certain period before you must either return to work or obtain a finding that your injuries are permanent.
When to Expect a Workers’ Compensation Settlement
Several factors influence whether an insurer offers a workers’ compensation settlement. These include the severity of your injuries, the clarity of the liability, the cost of your past and future medical treatment, and your projected recovery time.
The insurer can offer two main types of settlements.
- Structured pay: This type of settlement provides weekly or monthly payments over a specific period. Structured pay settlements are most common in temporary disability benefits.
- Lump sum payment: This settlement provides a one-time payment for all costs and benefits under the claim. Lump sum payments are often the settlement choice for permanent disabilities where you will likely have ongoing medical needs. The lump sum compensates for income loss, incurred medical expenses, and future anticipated expenses.
The role of medical treatment and recovery is crucial in the timeline of a settlement. An insurer won’t typically propose a settlement until you have reached maximum medical improvement. The U.S. Department of Labor defines maximum medical improvement as the point in your recovery when your physician determines your condition is unlikely to improve even if treatments continue.
Legal representation also greatly influences the settlement process. An experienced workers’ compensation lawyer can ensure all necessary documentation is in order, negotiate with the insurance company on your behalf, and advocate for your best interests.
Understanding Workers’ Compensation Settlements
A settlement is an agreement between you and the insurance company, under which you agree to relinquish your rights to future claims in exchange for a one-time lump sum payment or structured series of payments.
There are typically two types of settlements with different legal rights. A stipulated finding and award allows you to retain the right to future medical care for your injury.
A compromise and release requires you to give up any future claims for a larger lump sum. Factors influencing the settlement amount can include the severity of your injuries, your ability to work in the future, and the total cost of your medical bills.
The Pros and Cons of Accepting a Workers’ Compensation Settlement
Settlements offer certain advantages, such as a lump sum to cover expenses and future costs and the closure of not having to deal with the insurance company any further. Settlements also carry risks, however, including the possibility that you may underestimate your future needs and have to bear any unexpected future medical costs.
Before accepting a settlement, consider factors such as your future earning capacity, anticipated future medical costs, and the probability of successfully pursuing a claim if you refuse the settlement. Many states have workers’ compensation settlement charts that designate an amount of compensation for specific injuries.
These charts include impairment ratings that indicate the severity of an illness or injury. Your doctor will generally assign an impairment rating based on how your illness or injury impairs your ability to accomplish routine tasks, considering factors such as your communication skills, self-care, and independence.
The Role of Legal Representation in Workers’ Compensation Settlements
Having legal representation in a workers’ comp case can be invaluable. A qualified lawyer can explain the benefits available and file a claim on your behalf. They can also appeal the denial of a claim through the various procedures in your state. Appeals often involve several hearings before state boards or administrative law judges.
Even if an insurance provider has approved you for workers’ compensation benefits, you and your attorney can appeal if the settlement amount is not fair and request a judge to decide the amount. This is risky for both you and the insurer; negotiated settlements give both parties some control over the outcome of the claim.
Your workers’ comp lawyer can provide advice during the settlement process, negotiate with the insurer, review the settlement terms, and advocate on your behalf to garner a fair settlement amount.
Attorneys also play a pivotal role in the final stages of a settlement. They file all documents correctly and ensure the settlement agreement is legally binding. They protect your rights and explain the settlement’s impact on your future.
Many people avoid hiring an attorney to handle their workers’ compensation claims because they don’t think they can afford to pay for their services. Workers’ comp claims involve injuries, and all injured workers must have access to legal assistance, so most lawyers who handle this type of claim work on a contingent fee basis. You only need to pay for the attorney’s services when you receive a settlement or a court awards compensation.
Having the Right Information Is Critical to the Outcome of Your Workers’ Comp Case
Understanding when and how workers’ compensation might offer a settlement can be complex and overwhelming. A personal injury lawyer experienced in workers’ comp cases, will make sure you understand the process and handle the claim for you.
Every case is unique, and the timing of a workers’ compensation settlement can vary widely based on individual circumstances. Equipped with the right information and resources, however, you can make informed decisions that align with your best interests. Your healing and recovery should always be the priority.
