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Should I Settle My Workers Comp Case? Factors to Consider

should i settle my workers comp case

For injured workers, settling a workers’ compensation case can seem like the ideal solution – a lump sum payment provides financial security and closes the book on a difficult chapter. However, claiming settlements requires careful consideration of several key factors.

Rushing into an agreement can negatively impact access to medical care, income replacement, and other critical services down the road.

In this blog post, our workers comp attorneys explore the most significant elements to weigh if you’re wondering if you should accept the workers’ comp settlement offer.

Future Medical Care Needs

Not all workers’ compensation cases are subject to settlement. This means you and the insurance company agree on a dollar amount, and the case is closed. In the state of New York, there is no obligation on either side to settle the case.

If you do decide to settle, the most important consideration is your future medical care and treatment. This is a conversation that you should have with your doctor.

What type of future medical care and treatment might I need in the future based on my injury?

Once you settle, you will be responsible for using the funds to pay for your future medical care and treatment related to the injury. Medicare and healthcare insurance will not pay for care and treatment for injuries included in a workers’ compensation case.

How Long Your Workers Comp Benefits Will Last

The next fact to face is you will not receive workers’ compensation benefits for life. You may be entitled to receive up to 130 weeks of temporary disability benefits.

After that time, the state workers’ compensation board will have assessed your permanent disability benefits, which assessment can happen as soon as six months after the accident but more likely take between one- to two years after your injury, depending on your care and treatment.

There are permanent caps, which go anywhere from 2.5 years to 10 years of benefits. Even if you are not found to have a permanent disability until after the 130 weeks, the insurance company can take credit for any payments after the 130 weeks against your permanent cap.

Whether The Settlement Amount is Fair

Another item to realize is that million-dollar awards are fictional. Because of realistic caps, you’ll need to consider whether the indemnity benefit that’s being offered is a fair settlement. What will I use this money for? Will it help me get to the next stage of my life?

Most people end up receiving a cap of approximately five years. The injured worker might look at that cap and figure out that five years at a $400 rate is $104,000. The cap will not be paid upfront as a lump sum payment of $104,000. It will be discounted based on the value of today’s dollar.

How Inflation Can Impact Settlement Talks

The value of a dollar today is worth more than the value of a dollar in the future. The future value of a sum of money today is calculated by multiplying the amount of cash by a function of the expected rate of return over the expected time period.

In plain English, this means the insurance company will not settle the full $104,000 value. They may offer $72,800 or around 70%, which would be considered a fair value. You also want to make sure the indemnity benefit is accounted for in the settlement. If the insurance company states $75,000 full and final settlement, you will only be receiving an additional $3,200 to pay for future treatment.

Workers’ Compensation Benefits Impact On Other Benefits

While other benefits you receive do not affect your workers’ compensation benefits, workers’ compensation benefits can impact the other benefits you receive, such as social security disability.

The effect on your other benefits is not consistent. Some workers’ social security disability will be affected, and others will not.

Remember that insurance companies and Medicare are not going to pay for care and treatment of injuries covered by your workers’ compensation benefits.

For more information on Workers’ Compensation Issues In New York, an initial consultation is your next best step. Get the information and legal answers you are seeking by contacting us today.

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