Lump Sum Settlements
If a work-related injury leaves someone with a lasting mental or physical impairment, they may be unable to return to work in the same capacity. Those who are permanently disabled may have options when it comes to benefits, though. Once the employer’s Workers’ Compensation insurance company determines the amount, the employee can agree to the amount or decide to challenge it. It is possible to negotiate and receive a settlement, but this may involve going to court.
Lump sum settlements are paid in a one-time, agreed-upon amount and can include funds for outstanding medical expenses and the cost for future medical care. Another choice is structured settlements, paid out to the employee over a specified time period. There are pros and cons to both types of settlements. Depending on the state, if the employee settles instead of receiving standard weekly disability payments, they may be giving up some benefits.
Advantages of Settling
If time is a concern, settling can be faster and less stressful. The process of setting up a hearing can be difficult. Going to court also presents the risk of a judge awarding the employee less benefits than the insurer originally offered. Some insurers agree to pay the employee additional benefits for the cost of future medical care. This can happen if the employer’s physician believes there is a chance for surgery or other significant treatment down the road. The employee may not need this after time has passed, but they will still have those benefits.
Disadvantages of Settling
If an employee accepts additional benefits for future care at a settlement, it is possible that the costs for this care will exceed the monies paid. Another risk is the temptation to spend the money too soon, leaving the employee without enough funds to compensate for lost wages, medical costs, and other bills.
Other cons of accepting settlements are the possibility of it reducing other future medical benefits. Workers that settle will not be able to receive weekly benefits for that injury again.
Workers’ Compensation Settlements in New Jersey
In New Jersey, there are two categories of Workers’ Compensation settlements: Section 20 and Section 22. The following are details about each type of settlement:
- Used when the insurance company disputes or denies the Workers’ Compensation claim
- A final lump sum payment is provided
- Employee relinquishes all rights for future benefits pertaining to this claim; it cannot be reopened
- Can be used on accepted Workers’ Compensation claims
- Employer and insurer agree on a permanent disability rating
- Insurer consents to pay employee’s benefits in installments, based on the New Jersey benefits schedule
- Employee does not relinquish the right for future medical care, and the case may be reopened
Timing and Details
To reopen a Section 22 claim, the employee has two years after the last settlement payment was made. New Jersey also does not set time limits for settling these claims, and it is often recommended that the employee wait until they have achieved maximum medical improvement. Holding off until the condition is stable can keep the employee’s future options open.
Cherry Hill Workers’ Compensation Lawyers at DiTomaso Law Help Injured Workers with Workers’ Compensation Settlements
If you need trusted legal guidance with a Workers’ Compensation settlement, choose the experienced Cherry Hill Workers’ Compensation lawyers at DiTomaso Law. We will fight to obtain the benefits you need so you can focus on your recovery. Call us at 856-414-0010 or contact us online for a free consultation. Located in Cherry Hill, New Jersey, we serve clients throughout South Jersey, including Mount Holly, Camden County, and Vineland.