Why Choose a Settlement Rather Than Weekly Payments?There are some definite benefits of pursuing a settlement in your workers’ compensation. First, a settlement can provide a lump sum of money. Some settlement arrangements offer injured workers cash all at once, rather than waiting for a weekly check. This can be important to employees and their families who have specific needs right now. Additionally, a settlement offer is guaranteed money. Weekly benefits can be terminated at any time depending on your situation. If you and your attorney feel it is likely that your benefits may be terminated sooner than you desire, a settlement can ensure compensation. This can be especially important for those whose insurer or employer is disputing the ongoing need for the employee to be away from work.
Types of Workers’ Compensation Settlements in IowaThere are a number of ways a settlement can be reached in an Iowa workers’ compensation claim. There are different types of settlements, as well as different ways these settlements are paid. The types of settlements include:
- Agreement settlement. This resolves the amount and extent of compensation due. It must be approved by the Workers’ Compensation Commission, and it does not affect the worker’s rights with respect to future compensation regarding the settled injury.
- Compromise settlement. When there is a dispute over whether the injured worker is entitled to benefits, a compromise settlement can be reached. It also must be approved the Workers’ Compensation Commission, though it does terminate any future compensation for the settled injury. It may still be possible to obtain medical benefits, however, at the discretion of the commissioner.
- Contingent settlement. Any type of settlement can be made contingent upon a specific event, such as when Medicare approval is needed. If the event does not occur, the settlement may be vacated.
Settlement Payments Can be Made in Installments or Lump SumsIn Iowa, settlement agreements are typically paid out in installments, similar to the weekly benefit payments. However, there are cases where it is possible to obtain a lump-sum settlement. To be eligible for these lump-sum payments, it must be shown that the worker has a specific need for a lump-sum payment, and also that it’s in the best interest of the worker to be awarded the lump-sum payment. When approved by the Workers’ Compensation Commission, an injured worker may be paid:
- Full commutation. This is a one-time payment made to the injured worker encompassing all future benefits. It must be approved by the commission, and it will terminate any future benefits related to the settled injury, including medical benefits.
- Partial commutation. This is a lump-sum payment for part of the future benefits. It also must be approved by the commission; it terminates a worker’s rights to disability compensation, but it does not end a worker’s rights to medical benefits.
Should You Settle a Workers’ Compensation Claim?
While settlements do have significant benefits in certain situations, they can be complex and have far reaching consequences. Tax liability, financial planning, and other issues can all affect the returns of a settlement. Injured workers and their families should consider their options very carefully. An experienced workers’ compensation attorney can help you understand your rights and make the best decision for your future. It is important to remember that settlements are final. An injured worker cannot go back and undo what has already been done. At Pothitakis Law Firm, our experienced workers' compensation attorneys have helped many injured workers understand their options and worked to ensure they receive the maximum amount of compensation in the most effective manner. Take a moment to request a free copy of our book, 7 Things You Must Know If You Get Hurt at Work, to learn more about your rights in Iowa.