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Under Pennsylvania law, if you have a work-related injury and are receiving workers’ compensation benefits, it may be possible to receive a lump sum payment in a settlement with your employer’s workers’ compensation insurance company. Although there is no entitlement to a settlement, if both sides agree on a negotiated figure, part or all of your claim can be settled. It is critically important that you discuss your claim and possible resolution with an experienced attorney to ensure that your rights are protected. Each of our attorneys has more than 25 years of experience and has been certified as a specialist in workers’ compensation law by the Pennsylvania Bar Association’s Section on Workers’ Compensation Law as authorized by the Pennsylvania Supreme Court.
Insurance companies prefer that you not have an attorney so that they can settle your case for less money. Only an attorney who is experienced in workers’ compensation cases will be able to accurately tell you how much your case is worth, and make sure the insurance company pays you everything that you’re entitled to. In fact, in most cases, an experienced attorney will be able to obtain a larger lump sum for you, even after the deduction of attorney’s fees then you would be able to obtain by settling your claim on your own.
How Do Lump Sum Payments Work?
Under the terms of a typical lump sum settlement, you receive a one-time payment to settle your claim and in exchange you forego any rights to future benefits; you can never re-open your claim under any circumstances with regard to the portion of your claim that was settled. Normally the insurance carrier will request or require that the settlement include a resolution for all future benefits, including wages, medical expenses and specific loss benefits. Depending upon your medical condition and treatment plan, it may not be smart or feasible to close out future medical coverage. You may need additional surgery, therapy, medications, or other treatment that you are in no position to pay for out of pocket. In some cases, we can negotiate a settlement that leaves medical coverage open and just resolves the wage loss portion. The insurance company may push a structured settlement, usually where long-term care is needed. Structured settlements are paid over time, and payments can be made monthly, annually or every few years. We generally disfavor these arrangements.
Once a settlement has been negotiated, a hearing must then be held before a Workers’ Compensation Judge (WCJ) who will review the written document, called a Compromise and Release Agreement, and obtain brief testimony from you to ensure that you understand the full legal significance of the settlement. A Decision will then be issued by the WCJ approving the agreement and the lump sum payment will follow shortly thereafter.
In addition to wage loss benefits and medical benefits, the Pennsylvania Workers’ Compensation also provides coverage for specific loss or amputation of limbs or digits, and disfigurement/scarring benefits for the head and neck area. These potential benefits should be taken into consideration when considering a resolution of any claim. It makes sense to talk to an experienced workers’ compensation attorney who can advise you on the way to proceed before taking a lump sum payment from your employer’s insurance company.
Lump Sum Settlements Can Be Complicated and Confusing Without the Help of an Experienced Attorney
There are many factors that play into whether settling your claim is a good idea. Obviously the first factor is whether the insurance carrier is offering a fair amount, and this is where it is essential to speak with an experienced attorney who can explain how claims are valued and review all of your options.
Another factor to consider is whether the carrier has any leverage to try and stop or terminate your benefits. If you are able to go back to work, the carrier may try to prove to a Judge that your weekly benefits should be stopped or reduced based upon the type of work you are capable of performing. The carrier may also obtain a medical opinion regarding your ability to return to work or finding that you have fully recovered and may seek to terminate all benefits. In these circumstances, a negotiated compromise may be in your best interest to avoid the risk that your benefits are stopped entirely, without any settlement.
Your own circumstances may also influence your decision. Are you close to retirement? Pension or retirement benefits you receive after an injury can reduce your weekly workers’ compensation benefits, so it is important to appropriately time a possible settlement to minimize any effect on your benefits. Are you on Social Security Disability and/or Medicare eligible? These two factors have a significant impact on your ability to settle your claim–Medicare will not permit a settlement of the medical portion of your claim without its approval if you are receiving Medicare benefits or if you are likely to become Medicare eligible in the near future. Your Social Security disability benefit may actually increase after a workers’ compensation settlement if handled properly. There can also be tax implications with regard to Social Security Disability benefits and workers’ compensation benefits that sometimes can create a claim of an overpayment by the SSA to your detriment.
Other benefits that can factor into the equation include Medicaid coverage, public assistance, short or long term disability benefits from a private insurer, and unemployment benefits. Again, the interplay of these benefits with workers’ compensation benefits creates issues that require the assistance of counsel because the settlement of a workers’ compensation claim can be much more complicated than it first appears. Before you sign any type of settlement agreement, you should, therefore, consult with a workers’ compensation lawyer.
Let KBG Injury Law Help You Negotiate Your Lump Sum Payment or Structured Settlement.
If you have any more questions or concerns, please call us for a free consultation. Our team of experienced workers’ compensation attorneys can help negotiate a settlement that ensures you receive all the benefits to which you are entitled.