A person who suffered an injury at work may file a workers’ compensation claim to receive money for the cost of medical care and lost wages.
In some cases, a workmans’ comp lump sum settlement may be an option.
The question for many is whether or not a lump sum is an appropriate option in a workers’ compensation settlement in Pennsylvania.
When is a Workers’ Comp Lump Sum Considered?
A workers’ compensation insurance carrier may offer a lump sum settlement when they enter into negotiations with a claimant or claimant’s attorney and terms of settlement are agreed upon involving wage loss and payment of medical expenses. This agreement is a settlement for the injury and often includes all the medical costs as well as past and future lost wages.
Workers Compensation Insurance Carriers request a settlement demand either before a case goes into litigation or once it’s in litigation to close out the claim quicker than if it went into litigation. In some cases, the worker may waive their right to further compensation by agreeing to the settlement.
In other situations, the lump sum may only be for lost wages while workers’ compensation pays medical bills as they accrue.
Another situation is where a lump sum payment is offered for a specific part of the injury such as an amputation or paralysis. This concept is known as a Specific Loss Benefit.
At some point, workers’ comp may offer a lump sum settlement because the injury is permanent and the worker has reached the maximum improvement. The offer is for future medical care and loss of wages.
With a workers’ compensation settlement in PA, a judge must approve the C&R before insurance pays out a lump sum. The workers’ compensation insurance carrier can present the offer to the worker who then agrees to the conditions, but it’s not effective until the judge signs off on it. The hearing is part of the process to receive a lump sum settlement even if the worker is already in agreement.
According to state law, worker’s compensation insurance carriers can extend an offer for a lump sum payment at any time after the date of injury. However, it may take longer to understand the extent of the injury and the long-term impact in regards to quality of life. In some cases, it can be a year or longer before workers’ compensation puts out an offer to settle.
What are the Benefits of Taking a Lump Sum?
There are several benefits for the work to consider when it comes to workers’ compensation lump sum settlements.
Before considering this option, make sure you understand that you may be giving up your rights to further compensation. It’s important to talk to an experienced attorney before deciding to accept a lump sum payment. You want to make sure you’re getting a fair deal.
One of the primary reasons for a worker to choose a workers’ comp lump sum is to give them access to the money now instead of waiting for months or years. If you are struggling to get by while off from work, the cash in hand can make life a little easier.
Another benefit of this option is that the worker now has more options for treatment. Almost all settlements that keep medical open, meaning only wage loss is closed out, are already treating with a doctor of their choice. At the point of settlement with open medical, a claimant almost always can treat with whomever they want
You also won’t need to worry about taking independent medical exams to prove disability. You’ll be able to focus on recovery instead of meeting the requirements of workers’ compensation.
With a lump sum settlement from a workers’ compensation insurance carrier, the worker can receive the funds they need to make adjustments to their home or other changes to accommodate a permanent injury.
For instance, you may need to install a ramp or purchase a van that will fit a wheelchair. For anyone who doesn’t have enough cash to pay for these expenses upfront, the settlement may provide a way to improve your quality of life as you adjust to a permanent injury.
Peace of mind can make a lump sum settlement attractive. The worker has enough to deal with in doctor appointments, therapy and just adapting to the changes in life and routine. If you don’t have to deal with workers’ compensation forms and restrictions, it can reduce the stress levels significantly.
While these are all valid reasons to consider any lump sum settlement offered by workers’ comp, it’s important to not discount the disadvantages and to think about other considerations. Talking to an experienced workers’ comp attorney in Pennsylvania can help you see the big picture.
What to Consider Before Agreeing to a Lump Sum Settlement for Workers’ Compensation
Just because a person receives a lump sum offer for their workers’ compensation claim, it doesn’t mean they must accept it. A person should consider several things before agreeing to the terms of a compromise and release.
The Lump Sum Offer Saves Money for the Insurance Company
You must realize that when insurance offers you a lump sum payment from workers’ compensation, they are doing so because they estimate that it will save money for them. This is especially true if they offer it early in the claim. They are hoping to settle the claim for less than what it would cost to pay later on.
A serious injury may have complications or require extensive therapy or multiple surgeries. If the extent of the injury isn’t known yet or a treatment plan isn’t in place, the worker may not be aware of how much everything is going to cost. However, the workers’ comp company will understand the possibilities and hope to save money with an early settlement.
Consider Your Future Costs Before Settling
One of the most important things to remember when you’ve been injured is that you don’t have to settle or agree to the amount being offered. Before you even consider any deal workers’ comp is offering, you need to understand any and all potential expenses.
These may include:
- Potential surgeries in the future
- Long-term care like physical or occupational therapy
- Costs associated with long-term or permanent medication
- Potential construction costs to accommodate access
Along with the cost of care, you must think about whether you will be able to return to your same job or a similar job at the same rate of pay. If your injury prevents you from working in the same career, you will need to explore other options for employment.
You may discover that you will have limits on employment opportunities or may need to work in a job with lower pay. The future loss of wages can be complicated to calculate, but you should figure it into your PA workers’ comp settlements.
How Can You Estimate a Fair Settlement for a Lump Sum Payment?
You understand that the workers’ comp company wants to settle to save money and you know you need enough to cover your future medical expenses. The question you may be asking is how you can estimate a fair settlement for both parties.
Start by speaking to your doctor to understand the prognosis for your injury and its impact on your future. Once you are armed with this information, you can begin to formulate a dollar figure that you think is fair. This can be a complicated and arduous task, which is why it’s best to work with an attorney who can get the information you need and determine how much you should ask for in a settlement.
Your attorney may negotiate on your behalf to ensure you get an offer that is adequate to meet your current and future needs. It’s important to account for any possible complications and other issues you may have later on once the parties settle the claim.
What to Do If You Don’t Settle
You aren’t required to settle for a workers’ compensation lump sum payment from your employer’s insurance. You may continue to submit your bills and records of expenses until your injury has reached its maximum level of improvement.
If you feel you cannot reach an acceptable settlement, you can work with an attorney who will advise you on the next course of action. In fact, it’s better if you hire an attorney from the beginning who can advise you on how to proceed as the claim progresses. They can work on your behalf so that you can focus on recovery.
You’ll need to understand that, if you accept an offer of settlement which also prevents you from getting any other help in the future, you will be responsible for any other expenses that you incur.
Contact Krasno Krasno & & Onwudinjo if you have been injured and are trying to navigate the complicated workers’ compensation claims. Let our team help you determine if and when you should accept a settlement for your injury.
We will fight for your rights, so give us a call today!