If a worker is injured on the job and receives Workers’ Compensation benefits, he or she may be approached by his or her employer or the insurer with an offer to settle the case. A settlement can be comprised of monthly payments over a specified period of time or a lump-sum payment, which is receiving all of the money at once.
In Pennsylvania, a lump-sum settlement is a compromise and release agreement, which means that in return for a one-time payment, a worker agrees to release an employer and the insurer from paying future Workers’ Compensation benefits for that work-related injury.
Many people are tempted by the amount of money being offered upfront, and it may be helpful to have cash when going through recovery. However, settlement agreements are complex, and before accepting a lump-sum payment, there are many factors to take into consideration to ensure that this option is the most beneficial.
It is important to remember that a worker is not obligated to accept any kind of offer to settle a Workers’ Compensation claim. If an injured worker is interested in a settlement, he or she can negotiate the terms and the amount, although it is not advisable to do so without the help of a lawyer.
When employers or insurers offer to payout claims, it is generally because they have the advantage to do so. In some cases, it is possible to come out ahead, but a worker should know that if a lump-sum payment is chosen, he or she will be giving up something in return, he or she must be sure that it is worth the exchange.
Thinking about the recovery process of a medical condition should be foremost when deciding whether to accept a lump-sum settlement of a claim. Once an injured worker signs an agreement, it cannot be re-opened later. For this reason, it is important to think about the recovery process. If a worker anticipates additional therapy, medication, surgery, or another treatment that requires out-of-pocket expenses, then he or she may not want to sign away rights to future benefits.
In Pennsylvania, once an injured employee signs a settlement, he or she has no more rights to future medical benefits related to the claim that is being settled. It is crucial to consult with a medical provider as well as a legal professional so that a settlement can be timed with recovery. Lump-sum settlements make the most sense for workers who have reached maximum medical improvement (MMI).
There are different types of Workers’ Compensation benefits, and each has its own possible scenarios for settlements. Knowing the entitled benefits can help a worker decide if the proposed lump-sum is a fair offer.
Sometimes, a work-related injury results in a permanent partial disability, which is a condition where someone can still work with restrictions because of an injury.
In some cases, an injury means that the body will never go back to its pre-injury condition. In this instance, an injured worker may be entitled to a permanent partial disability award, and his or her employer may want to settle the matter with a lump-sum payment.
In Pennsylvania, Workers’ Compensation also provides awards for permanent disfigurement, which is called specific loss benefits, if a work injury resulted in the amputation of a body part, vision loss, hearing loss, paralysis, or permanent scarring.
An employer will likely offer an amount that is close to what a permanent partial disability award from workers’ compensation would be, but in return, the employer may expect that a worker gives up the right to any future medical care. In that case, it would be important to consult with a medical provider and ask whether the injury will require future medical care.
Perhaps the condition resulting from a work-injury could develop into other medical issues that require care and will be expensive. Accepting the settlement could also mean waiving the right to argue that he or she has a permanent total disability or another medical condition related to this claim. Evaluate the offer very carefully, and if it is difficult to understand the agreement, it is extremely important to consult with an experienced Workers’ Compensation lawyer.
Sometimes, a work-related injury forces a worker to stay at home during recovery because he or she is temporarily unable to perform any work duties. If this happens, and an employer missed some payments or paid the wrong amount, a worker may be offered a lump-sum settlement for the amount. Before accepting a settlement, a worker should check to see if he or she is also owed state-mandated penalties for late payments to be sure that he or she is getting all the entitled money.
If a work-related injury leaves a worker unable to work at all, he or she may be entitled to permanent total disability benefits. In addition to Workers’ Compensation payments for permanent total disability, he or she may be eligible for a lifetime pension award.
Calculating the value of a permanent total disability is extremely complicated and a worker should not accept at face value the number presented. Eligibility for Social Security disability benefits could be adversely affected by signing a settlement agreement, depending on how it is worded. In this case, the amount at stake strongly suggests consulting with an attorney who can accurately assess the value of a claim and the settlement offer.
There are other factors that can affect a claim’s value, including unemployment benefits, Medicaid coverage, private insurance with short or long-term benefits, and whether or not an injured worker is already on Social Security disability or Medicare. All of these can affect Workers’ Compensation benefits and settlements.
If a claim is in dispute and an employer or insurer has offered a settlement and it is not accepted, there is a chance a worker could lose the case. A judge could side with the employer, leaving a worker with little or no benefits and settlement. A worker could also win more than the settlement that is offered, but it will remain uncertain until the appeal process.
With any lump-sum settlement, it is important to be sure that all available money is being offered and if the agreement includes advances. The legal language of the document may be confusing to a worker.
Just because a worker decides to sign a lump-sum settlement agreement, does not mean it is over and done. There is a process where a judge must review the agreement in a hearing. At the hearing, the judge will ask the worker if he or she understands the legal terms of the settlement and then will issue a decision regarding the agreement. After the judge’s approval of the agreement, the lump-sum will be paid.
If a worker becomes injured while working, it is important to obtain legal counsel. A lawyer will guide a worker through the difficult legal process in a timely manner and explain his or her options for a settlement. Additionally, a lawyer will protect the rights of the worker and ensure that he or she receives all available compensation.
If you have been offered a lump-sum settlement for your work injury, do not sign anything without speaking to one of our Philadelphia Workers’ Compensation lawyers at Gross & Kenny, LLP. Our lawyers help injured workers get fair settlements. Contact us online or call us at 267-589-0090 for a free consultation today. Located in Philadelphia, we serve clients throughout Pennsylvania.