A workers comp final settlement represents the closure of an agreement between the injured worker and the employer or its insurance company. Many workers comp claims are settled through a negotiation process between the injured victim, the employer and/or insurer, and legal counsel for the parties. A workers comp settlement may be negotiated if the disabled person’s injuries or illness is work-related and some form of lasting disability or impairment exists.
Because a final settlement can’t be revisited or undone, it’s important for the injured worker to understand the pros and cons of final settlement agreement.
Pros of Agreeing to a Workers Comp Final Settlement
If the injured worker doesn’t agree to settle with the workers comp insurer, he or she has two options:
- He or she can accept the insurer’s offer and continue to receive weekly permanent disability benefits for whatever period the insurer has said it will disburse these payments, or
- He or she can take the matter to trial with the insurer in an attempt to secure higher weekly checks or a significant lump-sum payment.
If the injured disabled worker goes to trial (frequently referred to as a workers compensation hearing), the judge may rule against him or her. An advantage of agreeing to a settlement offer is that it reduces the risk of the hearing. In some states, the injured worker cannot receive a lump-sum payment after a positive hearing outcome. He or she is then limited to the receipt of weekly benefits payments for a period of weeks or years.
Some injured workers say they’re giving up rights that may not have any future value, anyway. For instance, if the claimant’s doctor says the likelihood of additional surgery in the future is low—about 15 percent—it may make reasonable financial sense to ask the insurer to pay a portion of the cost of future surgery as part of the final settlement today. If the injured worker doesn’t need surgery in the future, the negotiation successfully increased the settlement pot.
Cons of Agreeing to a Workers Comp Final Settlement
Most states allow the injured worker to give up his or her right to future medical treatments for current medical condition or illness. If the victim is likely to need surgery and expensive treatments in the future, waiving the right to payment might be a pennywise and pound foolish strategy. A final settlement now closes the door to treatments that the injured claimant’s medical plan might not pay cover.
Accepting the settlement offer can tempt the injured victim to spend principal now. If the lump-sum settlement is finalized and the victim spends money instead of investing for future growth, there won’t be future weekly benefits payments to rely on.
Structure of the Final Settlement
An experienced workers compensation attorney understands the importance of preparing a clear and concise settlement document. He or she will select proper language to protect your rights to access future benefits when possible.
If the workers compensation final settlement isn’t properly written to include certain terms, the injured worker is likely to pay the price. A workers compensation attorney protects the disabled or ill worker’s rights.
Before agreeing to the final settlement, the injured worker should consider two questions:
- Is the workers comp claim now completely closed following final settlement or will it remain open or can it be opened to pay medical costs in the future?
- Does the final settlement offer included advances of funds that were previously paid to the injured worker in the past or does the settlement proposal new money to him or her?
Unless the injured worker’s permanent disability is determined to be 10 percent or less, it’s very important to consult an experienced workers comp lawyer before agreeing to the workers comp final settlement. Learn more about settlement options and compare settlement amounts for similarly disabled person.