Considerations Before Settling a Workers Compensation Claim

As workers comp attorneys dedicated to protecting the rights of injured workers, we understand the complexities involved in workers compensation claims. Our goal is to provide you with comprehensive insights into the workers comp settlement process, empowering you to make informed decisions about your future. In this article, we’ll explore the key aspects you need to consider before accepting a workers’ compensation settlement offer.

Understanding Workers Compensation Settlements

Workers’ compensation settlements are a pivotal point in the claims process, presenting both opportunities and potential challenges for injured workers. Before diving into specific considerations, it’s important to understand the basics and implications of settling a workers’ compensation claim.

A workers comp settlement is an agreement with the insurance company to close your claim in exchange for a lump-sum workers comp payout. While this may sound straightforward, there’s much to consider.

• Finality: Settling typically means you can’t go back for additional benefits or reopen your case if your condition worsens.
• Voluntary Process: Settlements aren’t mandatory, so you can choose not to settle if the terms don’t meet your needs.
• Immediate Financial Relief: While settlements provide a lump sum, they can end your right to ongoing benefits.

Evaluating Future Medical Needs

A key consideration when evaluating a workers compensation settlement is assessing your future medical needs, as this directly affects your long-term health and financial stability. Accepting a settlement usually means taking on responsibility for any future medical expenses related to your work injury, making a careful assessment of potential medical needs essential.

Key questions to address with your doctor include:

• What is the likelihood of requiring additional surgeries or procedures in the future?
• Are there potential long-term complications associated with your injury?
• What ongoing treatments or therapies might be necessary to manage your condition?
• Is there a possibility that your injury could lead to secondary health issues over time?

Consider creating a detailed projection of potential medical expenses over the coming years. This might include:

• Costs of ongoing medications
• Expenses for physical therapy or rehabilitation
• Potential surgical procedures and associated recovery costs
• Adaptive equipment or home modifications that may become necessary

Another important factor to consider is how settling may affect your access to medical care through other avenues. After you settle a workers’ compensation case, Medicare and private health insurance generally will not cover treatments related to your work injury. This means that the settlement amount must be adequate to cover all expected medical needs without depending on these other sources of coverage.

Workers Compensation Benefits and Wage Caps

Workers compensation benefits aren’t always indefinite; most jurisdictions place caps on benefits based on your injury’s nature and severity. As workers compensation attorneys, we understand that knowing these limits will help you weigh the settlement offer against what you might otherwise receive.

Types of Caps:

• Temporary Disability Benefits: May be capped at a specific duration (e.g., 130 weeks in New York).
• Permanent Disability Benefits: Vary based on the injury’s severity and its impact on your ability to work (2.5 to 10 years for some workers comp lawsuits).

Evaluating the Settlement Offer:

• Calculate Total Value: Estimate what you’d receive in benefits if you didn’t settle.
• Discounted Offer: Insurers may offer 70-80% of this value as a lump sum, reflecting the present value.

Receiving a lump sum now offers immediate access to funds, which may be beneficial if you have pressing financial needs.

How to Calculate a Workers Compensation Settlement

Calculating the true value of a workers compensation claim is essential in deciding whether a settlement offer is fair. To make an informed decision, consider both current expenses and future needs. Here’s a step-by-step guide:

Step 1: Assess Current Medical Expenses

Your starting point is the medical expenses incurred to date, covering all treatment-related costs:

• Hospital bills
• Physician fees
• Medication costs
• Therapy and rehabilitation expenses
• Medical equipment or devices

Step 2: Project Future Medical Expenses

Work with your treating physician to estimate potential long-term medical needs. Consider factors like:

• Ongoing medication requirements
• Future surgeries or procedures
• Long-term therapy or rehabilitation
• Risk of complications or secondary conditions

Tip: A comprehensive medical evaluation helps ensure your settlement covers any future medical costs.

Step 3: Calculate Lost Wages

Lost wages include both the income already lost and any potential future earnings affected by the injury. Assess:

• Duration of temporary disability
• Permanent restrictions impacting earning capacity
• Need for vocational rehabilitation or retraining

Example: If you’re unable to return to your previous job due to injury, factor in the cost and time needed for vocational retraining.

Step 4: Consider Non-Economic Factors

Although workers’ compensation typically doesn’t cover pain and suffering, the value of your claim can be influenced by:

• Clarity of the link between your work and injury
• Strength of medical evidence supporting your claim
• Resolution of disputes over the injury’s nature or severity

Step 5: Understand Present Value Calculations

Insurance companies discount future benefits to a present value, meaning a lump-sum offer reflects the “today’s value” of what you might receive over time. To evaluate if an offer is fair:

1. Calculate total potential value of your claim (e.g., weekly rate x benefit duration).
2. Apply a discount rate to determine the present value.
3. Compare this present value to the settlement offer.

Example Workers Comp Settlement Calculation: If your maximum benefit duration is 5 years at $400 per week ($104,000 total), a settlement offer of $75,000 might be fair when adjusted for present value.

Workers Compensation Lawyers in South Carolina at Cummings & Lewis

At Cumming & Lewis, our workers comp lawyers in Spartanburg, SC, are here to help you throughout your worker’s comp claim with empathy and knowledge. Through our legal support and advocacy, we strive to protect your interests every step of the way and help you deciding when to accept your workers compensation settlement offer. Contact us to schedule a free consultation today.