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Understanding Workers’ Compensation Benefits Before a settlement can be reached, the standard workers’ compensation system provides two primary forms of relief to injured workers in Pennsylvania:

• Wage Loss Benefits: These are generally paid at two-thirds of a worker’s gross average weekly wage, though some lower-earning individuals may receive up to 90% of their pre-injury earnings. Importantly, these benefits are non-taxable.

• Medical Benefits: Carriers are responsible for all medical expenses related to the work injury until the worker has fully recovered or a judge terminates the benefits.

• The Art of the Settlement A settlement, governed by a Compromise and Release Agreement, converts future wage loss and medical expenses into a lump sum payment. Jeff Gross emphasizes several key strategies for maximizing these deals

• Maximum Medical Improvement (MMI): Gross advises against settling until a client reaches MMI—typically defined as a year-long plateau where the condition no longer improves or worsens. Settling prematurely can leave a worker responsible for expensive, unforeseen surgeries.

• Calculation Factors: Settlement values are primarily based on the benefit rate extrapolated into the future and reduced to a lump sum.

• Negotiation and Mediation: Settlements are rarely reached by simply asking for the desired amount. Gross utilizes judges in mediations (settlement conferences) to drive values higher, noting that a successful negotiator often starts with a high demand to create room for movement.

Interplay with Social Security and Third-Party Claims Settlements do not exist in a vacuum and often intersect with other legal areas:

• Social Security Disability (SSD): To avoid benefit offsets, Gross includes specific “proration language” in agreements that spreads the settlement over a client’s lifetime expectancy.

• Third-Party Negligence: If an injury was caused by someone other than the employer (e.g., an auto accident while making a delivery), a worker can pursue both workers’ compensation and a personal injury claim. While workers’ comp covers only economic damages (wages and medical), a third-party claim allows for non-economic damages like pain and suffering.

Firm Information

Gross & Kenny is a premier workers’ compensation firm based in Philadelphia, Pennsylvania. Founder Jeff Gross offers free consultations and operates on a 20% contingency fee basis, meaning he only gets paid if he successfully maximizes the client’s settlement.

• Phone: 215-512-1500

• Website: www.phillyworkerscomp.com

Transcript: Workers’ Compensation Settlements: The Art of the Deal | 04-07-25

Host: Joe Dougherty Guest: Jeff Gross (Founder of Gross & Kenny)

Speaker 1: All right.

Joe Dougherty: Ladies and gentlemen, we’re in the door about it. Welcome to The Jeff Gross Show here on WWDB Talk 860. We’ve got a fantastic broadcast. Very cool topic for this one, and happy to bring in our host, Jeff Gross. How are you, sir?

Jeff Gross: I’m doing well, Joe. How about you?

Joe Dougherty: I’m very well and excited about today’s show. Of course, Jeff is the founder of Gross & Kenny, a workers’ compensation firm in the city of Philadelphia and the state of Pennsylvania—one of the premier firms around. Real excited about this broadcast. The topic today is “Workers’ Compensation Settlements: The Art of the Deal.” There are so many elements to a workers’ compensation case, and one of them is the settlement. A lot of people might get it confused with a personal injury settlement, and they can overlap, but there are some differences. Jeff’s going to explain all of those things. So without further ado, Jeff, let’s talk about our topic for the day, workers’ compensation settlements. What is a workers’ compensation settlement? Set the table, if you would.

Jeff Gross: Sure, I love to set the table. First of all, workers’ compensation gives you two things: wage loss benefits for the duration of your disability (usually two-thirds of your gross average weekly wage) and medical benefits. But there are a lot of nuances. People get paid up to 90% of their pre-injury earnings, and some get one-half of the statewide maximum benefit rate for the year of their injury. Essentially, it depends on how much you were earning at the time of the accident. If you were earning below a certain threshold, you can get up to 90% of your average weekly wage, and none of this money is taxable.

Now, what is a settlement, and how do we arrive at it? Workers’ compensation is a benefit payable to you weekly or bi-weekly. But at some point, you become a thorn in the side of the insurance company because you’re bleeding them to death. You’re entitled to medical expenses related to the work injury until you fully recover or a judge cuts you off. A workers’ compensation settlement is when we take your future wage loss and future medical expenses and reduce them to a lump sum settlement payment. You go your way, they go theirs, and that’s the end of the case.

This is governed by an agreement called a Compromise and Release Agreement, which spells out the particulars: the lump sum amount and what they are responsible for paying up until that date or ongoing. Some are “one and done,” covering both wage loss and medical. Some are hybrid, where you get a settlement for wage loss but medical continues. Some include periodic payments, known as a structured settlement.

The number one factor in determining value is your wage rate. For example, if you make $50,000 a year, that averages to $961.53 a week. Two-thirds of that is $641.02. If you’re entitled to that tax-free ongoing, the insurance company eventually gets tired of paying. We use that rate as the basis to value the claim moving forward, taking into consideration your ongoing medical needs.

Joe Dougherty: Before you go any further, though—you mentioned Maximum Medical Improvement (MMI). Just about to talk about that?

Jeff Gross: Let’s suppose you’ve reached a plateau, meaning you’ve reached Maximum Medical Improvement. You’re still getting treatment, but it’s not really curing you; you’re simply in a status quo situation. The AMA guidelines define MMI as a period—usually one year—where there has been no change in your condition. I do not like to settle cases unless my clients have achieved MMI. If you cut off treatment prematurely and get worse, who’s going to pay? You don’t want to find out you need surgery after you’ve made a settlement and have no way of paying for it.

Joe Dougherty: Is it possible—and that’s a great point—because you’re thinking of the long-term wellbeing of your client? I imagine people push to settle only to find their health lingers in a negative way. You at least want to have that conversation to look at the big picture.

Jeff Gross: I have an exhaustive conversation about this with all my clients. A Compromise and Release Agreement has the effect of finality—you cannot reopen the case for any reason at all. If you settle, it’s over. Clients often say they need surgery but won’t get it and want to settle; I tell them if they decide they need it later, they’ll have to find another avenue like health insurance to pay for it. I make sure they’ve reached MMI first.

Joe Dougherty: Is it hard for someone to go to their personal insurance at that point?

Jeff Gross: It depends on their insurance. If they have “bad” insurance, it may not cover the same doctors. We make sure the doctors they like are within the network of their health insurance before they sign.

Once MMI is reached, the case is ripe for settlement. The law expects you to reach MMI in roughly two years. If 104 weeks of disability go by, the carrier has the right to have you evaluated for an Impairment Rating Evaluation (IRE). They can use that to try to cap their damages. But once you’ve achieved MMI, we begin negotiations. The questions are: can you return to your pre-injury job? Is there a modified position available? If not, we tweak the case so the insurance company becomes interested in settling.

Joe Dougherty: Let me throw a scenario at you. What if a company offers a modified duty position, like an office job for a year, and then lays me off?

Jeff Gross: If the job is no longer available, they must reinstate your benefits immediately. They cannot avoid paying because if you’re in a modified capacity and the job disappears, they must pay.

Joe Dougherty: How long would that last? Forever?

Jeff Gross: Partial disability is limited to 500 weeks—about 9.6 years. There are two kinds of disability: total disability (no limitation, can get it forever) and partial disability (limited to 500 weeks). If they lay you off after a year, they reinstate benefits, but the clock is ticking toward that 500-week cap.

In negotiations, I never submit a demand for what we actually want. If you ask for exactly what you want, you have nowhere to negotiate. I ask for a much higher number so we can come down step-by-step. For example, if the goal is $100,000—which is roughly three years of benefits at a $641 rate—I might ask for $200,000. I often use judges in mediations (settlement conferences) to help drive the value as high as possible. Since I take cases on a 20% contingent fee, I have every incentive to maximize your benefit.

Joe Dougherty: Is the insurance company typically reluctant to do hybrid settlements where medical remains open?

Jeff Gross: They would prefer to just be done and get rid of the person. They will typically pay a little higher in a lump sum just to close the medical portion too.

Joe Dougherty: Can the insurance company shut the case down at that 104-week point?

Jeff Gross: No, but they can have you submit to an IRE. If your whole-body impairment is between 0-35%, they can cap your wage loss at 500 weeks. If it’s 35% or higher, you get benefits for life. They can subject you to an exam every six months to try and lower that rating. After 500 weeks of partial disability, wages stop, but medical does not. The IRE does not apply to medical benefits.

I have catastrophic cases—paraplegics or severe head injuries—that I do not settle. If that money is gone, then what?

Joe Dougherty: Talk about Social Security Disability (SSD).

Jeff Gross: Whenever we settle, I put “proration language” into the agreement. We divide the net lump sum over your lifetime expectancy. If that result is below $800 a month, the Social Security Administration cannot take an offset against your settlement. This allows you to get your settlement tax-free and still receive your maximum SSD benefit.

Joe Dougherty: What’s the risk of not taking a settlement?

Jeff Gross: The risk is a judge stopping benefits entirely. Or, you run the risk of dying before achieving the full extent of benefits. For example, if you have a terminal illness unrelated to the work injury, you should consider settling so the money can go to your family, almost like a life insurance policy. If you pass without settling, that money is forfeited. Another risk is the “all or nothing” nature of litigation; if a judge believes the insurance company’s doctor over yours, you get zero and lose the settlement that was on the table.

Also, workers’ comp has no COLA (Cost of Living Adjustment). Your rate is fixed on the date of injury and never changes. If the cost of living goes up, you’re stuck.

Joe Dougherty: But medical treatment costs go up.

Jeff Gross: They pay at 113% of Medicare rates. Unlike health insurance, workers’ comp has no deductibles or copays ever.

Joe Dougherty: What about a third-party element?

Jeff Gross: You can’t sue your employer for negligence, but you can sue a third party (an “other party”). For example, if a texting driver hits your delivery truck. Workers’ comp covers economic damages (wages and medical). A third-party claim allows for non-economic damages: pain, suffering, loss of life’s pleasures, embarrassment. These are huge components. Generally, the higher the workers’ comp settlement, the higher the third-party claim will settle.

Joe Dougherty: How does long-term medical work in a catastrophic third-party case?

Jeff Gross: A 2017 Supreme Court case, Whitmore, changed things. Previously, medical expenses in the “holiday grace period” were reduced to the same percentage as wage loss. No doctor wanted to treat you for 12% of the bill. Whitmore decided the carrier must continue to pay the full 113% of Medicare rates even after a catastrophic third-party recovery.

Joe Dougherty: What happens when there’s a death case?

Jeff Gross: You deal with survivors’ benefits for dependent spouses or children. We must prove they were dependents on tax returns at the time of death. Insurance companies push back, arguing about common law status or whether children are true dependents.

Joe Dougherty: Jeff, contact information?

Jeff Gross: My cell phone is 215-512-1500. Find me on the web at www.phillyworkerscomp.com or email me at JGross@GK-WCL.com. I do not stand on ceremony—call me anytime.

Joe Dougherty: I’m Joe Dougherty, thanks for listening, everybody.