Should I Accept a Workers’ Comp Settlement Offer?
When you receive a workers’ comp settlement offer, you can accept or reject it, or negotiate for a higher offer. The settlement amount offered may look significant and enticing, but it may not be in your best interest in the long term. Therefore, it’s critical to understand the different factors that determine whether to settle or not, when to settle, and how much settlement you need.
How Workers’ Compensation Settlements Work
When you suffer a work-related injury, you file a workers’ compensation claim. When accepted, you’ll get a percentage of your salary until your doctor releases you to resume work, or you heal completely.
A settlement agreement can be reached between you and your employer’s workers’ compensation insurance carrier. The insurer may want to pay you off quickly, and so may make you a settlement offer early during your case. It could also take months or years to receive a settlement offer.
Factors that determine the settlement amount you may get include:
- Pre-injury wages
- Nature of injury
- Type of treatment required
- Ability to return to work
You can also ask for a settlement. Many injured workers don’t know that they’re eligible to receive a settlement for their workplace injuries. If the insurance company doesn’t offer a settlement, you’ll continue receiving the benefits you’re entitled to for your injury.
When you accept a settlement offer, the Illinois Workers’ Compensation Commission must approve it to become final. Once the settlement is final, the weekly benefits you’ve been receiving will be terminated. Any medical payments you’ve been getting are also likely to be canceled.
Under Illinois law, you can reopen your case within 30 months of your settlement date if your injuries worsen. However, insurers usually work around this law by including a waiver of the right to reopen the case in their settlement contracts. Therefore, you won’t be able to reopen the case later if your injuries worsen, or you become dissatisfied with the offer.
If you don’t accept an offer, you can seek a higher settlement. Your case can proceed to trial if you can’t reach an agreement with the insurance company. Studies show that most workers’ compensation claims reach a settlement out of court. According to the 2020 Illinois Workers’ Compensation Commission Report, 87% of the cases that were filed for workers’ compensation were settled.
Types of Workers’ Compensation Settlements
When workers’ comp cases settle, the settlement can be paid in one of these two forms: lump-sum payment and structured settlement.
With a lump-sum payment, you get a one-time payment to cover all your damages and conclude your case. A lump-sum payment may be favorable if your injury prevents you from returning to the same job. You could use the lump-sum settlement to move on faster with your life and do other things, such as buying items that help you cope better with a disability in your everyday life and getting training for a new job.
You may also opt for a lump sum settlement if your injury doesn’t require long-term treatment or your future medical expenses are expected to be less than what you would get through structured payments.
In the case of a structured settlement agreement, you receive payments over a period agreed upon by you and the insurer. You can consider this type of workers’ comp settlement if you’re worried about spending a lump sum payment too quickly and failing to stretch it enough to cover your future expenses. A structured settlement may also make sense if you’re concerned about a lump sum settlement’s effect on Social Security Disability Insurance (SSDI) benefits or tax implications.
While structured settlements last longer and offer tax advantages, they tend to be accompanied by restrictions, such as having to waive rights to future wage claims.
Each type of workers’ compensation settlement has its advantages and disadvantages. A workers’ compensation attorney can help you choose the best option based on your circumstances.
Accepting or Refusing a Workers’ Comp Settlement Offer
If you know the value of the workers’ compensation benefits you should be entitled to and receive a settlement offer that matches it, the best course of action would be to settle the case. You would get a faster resolution that saves you time, stress, and energy. There are several other situations where you would want to accept a settlement offer.
There could be a significant dispute about certain facts of your case. For example, proving that your illness or injury resulted from your work duties or environment may be challenging. If your claim has considerable weaknesses, you could be unlikely to win your case if you take it to trial. Accepting a settlement offer rather than risking getting nothing makes more sense.
If you’re expected to heal completely and return to the same job, it may be better to take a settlement. It’s also okay to accept a workers’ compensation settlement if your injuries weren’t severe and the duration of treatment will be short.
When to Fight a Workers’ Comp Settlement Offer
While it may be tempting to accept a settlement offer to gain immediate access to a lump sum of money to pay medical bills and other expenses, settling your case right away may not be the best decision. Insurance companies are more concerned about making profits than paying out claims in full. As a result, they can shortchange you by offering a lower settlement than what you should be entitled to, hoping you don’t realize.
Here are some circumstances where you should challenge the settlement offered.
When the Offer Doesn’t Compensate You Adequately
You shouldn’t settle your workers’ compensation case if your claim isn’t being valued fairly, or you’re unsure of what the claim is worth. The compensation from the insurance carrier’s settlement offer should help offset unpaid and future medical bills, lost wages, and other expenses resulting from your injury.
Fight settlement offers that don’t adequately consider all your applicable losses. A settlement offer isn’t worth considering if it’s significantly less than what you’d get if you took your case to court.
Accepting a settlement offer and releasing your employer and the insurance company from future liability could leave you stuck paying bills caused by your injury in the future. You need to maximize the settlement amount you receive before signing a settlement agreement with the insurance company.
It’s challenging to know if the settlement offered is a fair deal. Unless you’re experienced in workers’ compensation litigation, you won’t know how to accurately calculate your claim’s real value, which is a critical step to finding out the settlement amount you need. Workers’ compensation attorneys review the facts of your case and calculate what a fair settlement would be, based on factors like:
- The type and severity of your injury
- Your prognosis
- State workers’ compensation laws
- The outcome of similar cases
After finalizing calculations of your claim’s value, workers’ compensation attorneys compare it to your settlement offer. If there’s a significant difference, an attorney will build up evidence and present a strong case on your behalf to negotiate a higher settlement.
When You Haven’t Reached MMI
Your injuries can get worse even after you see a doctor after a work injury or have received care from medical staff. It’s difficult to know how much your injury will heal or the future medical care you’ll need if you’re still receiving active medical treatment and haven’t reached Maximum Medical Improvement (MMI). MMI is the stage where your treating doctor determines you have healed as much as possible and are unlikely to see further recovery with additional treatment. However, you may still need ongoing treatment at this stage to prevent your condition from getting worse.
Taking a settlement before reaching MMI is risky because if your injury worsens and requires additional treatment, the settlement offer may not be enough to cover those treatment costs. In most cases, it’s best to wait until your doctor says you’ve reached MMI before settling your workers’ compensation claim.
After you reach MMI and your doctor potentially gives you an impairment rating, it will be easier to establish the future treatment needed for your injury and how much your claim is worth. Your attorney will be in a better position to take all your losses into account when negotiating with the insurer for a settlement.
Bear in mind that waiting to settle until most anticipated benefits are paid out may lead to a lower case value than if you had settled the case earlier. A workers’ compensation lawyer will know what a fair settlement is depending on the specifics of your case and offer guidance on whether it will be best to wait until MMI or settle earlier.
When Injuries Could Worsen and Require Long-Term Care
You could reach MMI without making a full recovery. You may still have lingering health problems set off by the workplace injury that may need long-term or lifelong care. When you have recurrent health issues, your condition may worsen after accepting a settlement. It’s generally not advisable to take an insurer’s offer if there’s the possibility of your injuries worsening and needing long-term treatment.
Your medical expenses are likely to keep increasing. You should preserve your right to future medical treatment. Accepting a settlement could close out your claim and prevent you from adjusting the scope or amount of benefits if your condition continues or deteriorates. Long-term payouts or renegotiating the settlement is more beneficial.
With regularly scheduled payments, you’ll have financial peace of mind by not having to worry about your bills exceeding an earlier settlement. If you opt to settle your case, ensure the settlement amount adequately compensates you for your future care needs. Medical evidence is crucial to proving the need for future benefits, so you should know what to say and what not to say to your workers’ comp doctor.
Make sure you assess any workers’ comp settlement offer carefully to ensure you’re comfortable with its terms and that it meets your needs.