The process of filing a workers’ compensation claim can be a stressful and complicated time. Even if the employee tries to settle the matter, that does not mean that he or she will be pleased with the offer presented through settlement. What happens if the employee does not like the offer given? Does the employee have any recourse? We have asked a legal expert, attorney Alaina Sullivan, about what you should do. Here is what she had to say: Workers’ Compensation Settlements After an employee is hurt while on the job and files a workers’ compensation claim, the settlement process normally follows. If he or she is able to hire an attorney, the attorney will be able to file a settlement request and will walk him or her through the process with the insurance company. An attorney is not needed for all cases, however, and many claimants choose to go alone through the process. Settlements normally involve a large, lump sum payment rather than weekly disability payments. Settlements can also handle any unreimbursed medical expenses or past-due temporary disability payments. If the employee wishes, he or she can request a structured settlement, receiving smaller payments over the course of time. In these types of settlements, the employee does not waive all of his or her rights to future medical care. How Does a Workers’ Comp Settlement Work? If you suffered an injury while at work, you have the right to file a claim for workers’ compensation. After reporting the injury to your employer and receiving medical attention, you eventually have to decide on what type of workers’ comp settlement you should choose. There are two ways you can receive a workers’ compensation settlement: Lump sum and structured settlement. A lump sum settlement pays you the entire amount of money awarded you for a workers’ comp claim. On the other hand, a structured settlement allows you to receive regularly scheduled payments in the future. Both types of workers’ compensation settlements offer advantages and disadvantages. One of the advantages of a lump sum settlement is you avoid the impact inflation makes on future payments. You receive a lump sum of money that you can invest to generate interest and appreciation income. However, your investments might not do as well as you planned. Lump sum settlements allow you to pay off medical bills faster. One of the drawbacks of a lump sum settlement is the pressure you feel to donate some of your financial windfall. Also called an open settlement, a structured workers’ comp settlement covers the cost of future medical expenses. You receive financial support for ongoing medical issues. For example, if you ruptured a disc in your back while at work, a structured settlement provides you with the financial resources you need to take care of future medical bills. However, the money you receive in the future is susceptible to inflation. You also might not be able to pay for large, unexpected medical bills. How is Workers’ Compensation Calculated? Your workers’ compensation settlement is calculated based on two main factors: This is the full cost of your medical treatment which you have already received plus any treatment you may need in the future. You shouldn’t underestimate your future medical treatment costs as these will be included in your settlement negotiated between you and your employer’s WC insurer. Two thirds of your weekly wage calculated on the current wage for your job. This is then multiplied by 52 to give you the yearly value of your wages. If you overestimate the value of your claim your company’s insurer may ask for a trial in order to reach a fairer settlement. However, there is one thing you should never do and that is to accept a payment before you have filed your workers’ compensation claim form. This is sometimes offered because your company’s workers’ comp. insurer thinks that you are in need of cash urgently. Is Your Workers’ Compensation Settlement Taxed? Typically, WC benefits are not taxable at either the state or federal levels for any type of injury whether serious like a spinal cord injury or just a simple but chronic muscle strain. However, if you are receiving Social Security Disability Insurance (SSDI) Supplemental Security Income (SSI) as well as workers’ comp. benefits, you will be taxed as SSDI is a tax funded federal insurance program. For example, if you suffer from a permanent injury caused at work and you are being compensated with worker’s compensation and you are already receiving SSDI as well, you may find your workers’ compensation benefits are taxed. Another example is if you are injured at work and you need several months to fully recover and you are currently receiving workers’ compensation for lost wages and SSI your lost wages payments may be taxed. The Advantages of Going to Court If you are satisfied with your workers’ compensation settlement you won’t want to dispute it. However, if you don’t believe your WC settlement is fair, you may want to bring it to court and have a trial to reach a fairer settlement. There are several advantages of getting your workers’ compensation settlement reassessed at a trial. Firstly, if the court decision awards a settlement you will not receive a lump sum but you will receive the payments on a regular basis. This means you have access to regular sums of money that you could use for further medical treatment if required. Secondly, going to trial may end up in you being awarded a higher settlement than if you settled out of court at an earlier date with your employer’s workers’ compensation insurer. How a WC Attorney Can Help You Prepare For a Trial It is a difficult process negotiating your workers’ compensation amount with your employer’s workers’ compensation insurer. If you're unable to negotiate a just settlement, your case will proceed to an administrative hearing or trial before a workers' comp judge. This is the time when a workers’ comp. attorney can be of great help. There are a number of tasks that need to be completed. These can be done far more easily by an experienced workers’ comp. attorney than if you tried to do it all on your own. The first is the “discovery” phase. At this point in time your attorney can take depositions of witnesses, place a request for your medical records, conduct any necessary legal research, prepare your “pleadings” such as motions, petitions and responses to your employer’s insurance company while ensuring all that is required is submitted on time. When the hearing date comes round, your attorney will offer a "theory of the case" to the judge, which when put more simply are the reasons why you should be awarded workers’ comp. benefits. S/he will also be ready to present the opening and closing arguments, examine your witnesses, and raise any objections when your employer’s insurance company fails to toe the line. If after the hearing you don’t think the settlement is satisfactory you can ask your workers’ comp. lawyer to file an appeal on your behalf. If you have an attorney representing you it takes the burden off your shoulders when you might still be recovering from a serious injury. Why Settle a Workers' Comp Claim? No requirement exists saying that an employee must settle with the insurance company. If he or she does not like the settlement offer given by the workers’ compensation insurance company, that employee can proceed to a hearing or trial with the insurance company. If the employee does choose to go ahead to a workers’ compensation hearing, the possibility exists that the judge will offer him or her less than what the insurance company is offering through settlement. That risk is available in any type of legal proceeding. Also, in some states, the employee cannot receive a lump sum payment after he or she wins at trial. In those states, the employee is limited to receiving weekly payments for a set period of time. Choosing to take a settlement can allow the employee to get a lump payment now, in lieu of waiting for trial and then receiving a structured plan. Why Not Settle a Claim? Just as there are advantages to settling, there are disadvantages, too. In many states, if an employee chooses to settle, he or she gives up the right to claim for future medical treatment for the injury sustained. Unless he or she has a crystal ball, no guarantee exists that problems will not come up in the future, and he or she may need more medical procedures but not have the money to cover them. Also, some worry that having a lump sum payment will allow the money to be used immediately, whereas by not settling, the person receives weekly payments throughout time to help sustain him or her as needed. Structuring a Settlement If the employee is not wanting to accept a settlement because he or she has worries about how to protect rights for future benefits, workers compensation attorneys can help structure the wording of the agreement to ensure those rights are protected. An attorney can make sure that the settlement is worded properly so that Social Security disability benefits in the future will not be adversely affected. The wording matters if the employee wants to keep the claim open to pay for future medical costs. Further, the settlement needs to detail whether the amount paid covers permanent disability advances that may have already been paid. All of these details are important, and it is of even more importance that the employee has a professional review the document before submitting or approving. If your claim is still under evaluation, it may be a good idea to speak with an attorney. Here are some reasons why you should seek legal help while a claim is under review. Judge’s Review of Settlement In most states, once a settlement is reached, it still has to be submitted to a workers’ compensation judge for review and approval. Therefore, if the employee has concerns that he or she is not being given a fair shake, this step should somewhat alleviate concerns. The judge will review to make sure the settlement is fair to the employee. Keep in mind, however, he or she is not looking at the person’s medical history and records but rather the settlement document alone. The judge can only go off of the information presented before him or her before determining if the offer is fair. Having a workers’ compensation attorney can ensure that the offers is fair that much more because he or she would have been sure to include all of that information in the settlement agreement before submitting it for approval to the judge. Contact a Workers' Comp Attorney Today If you have been involved in an accident during the normal course of business and are unsure about how to proceed with a workers’ compensation claim, it is highly recommended that you contact an attorney to answer your questions. A licensed attorney trained in workers’ compensation law will be able to review your case and determine your best course of action. To receive the compensation you deserve, contact an attorney in your area today. You can speak with a workers' compensation attorney by filling out our Free Evaluation.
