Lump Sum Settlements in Boston Workers’ Compensation Cases
Pursuant to Section 48 of Title XXI, Chapter 152 of the Massachusetts Workers’ Compensation Act (WCA), the insurer and the employee may enter into an agreement to settle the case with a lump sum workers’ compensation award. Under Section 48 of the act, the employer must agree in writing to any workers’ compensation settlement. The reason there is a requirement that the employer consent is because the cost of the employer’s workers’ compensation policy could be affected by a settlement payment.Reasons for Taking a Lump Sum Award in Boston Workers’ Comp Cases
Before we get into the specifics of how to calculate a workers’ compensation lump sum award, let’s first talk about some reasons why it might be worth taking such as settlement in lieu of weekly or monthly workers’ compensation benefits. We will also talk about the reasons why it might not be good for the workers’ compensation case, as well as what employers refer to as “double dipping” in Boston workers’ compensation cases.Reasons for Taking a Lump Sum Settlement
In many cases, it makes sense to resolve a workers’ compensation claim through a lump sum settlement. Through a settlement, an injured worker often can obtain more money than if they received benefits weekly. For example, if you are close to reaching an endpoint with your medical treatment, you may be able to obtain a year’s worth of workers’ compensation benefits upfront. If you had remained on worker’s compensation and were released to return to work by your doctor after one month, your payments would have stopped. But through the settlement, you obtain an extra eleven months worth of payments. While it is not possible to obtain pain and suffering for a workplace accident, a lump sum settlement can often provide some extra compensation that the injured employee otherwise would not have received.
However, as our Boston workers’ compensation attorneys can explain, if you take the money now in a lump sum award, responsibility for managing that money and making it last will be on you, the injured worker. Your weekly checks would stop, and no future benefits for weekly compensation can be obtained.
To assist with this dilemma, some injured workers that settle their case prefer to receive less money upfront and would rather spread the money out over multiple years. There is nothing wrong with that and you would certainly not be alone in that thinking. You have likely been watching TV while you were home recovering during the day or late at night and may have seen commercials advertising assistance with structured settlements. Through a structured settlement, you are able to receive your settlement money through monthly or weekly installments. Later on, if you wish to cash out the structured settlement, you can contact companies such as those on TV and they will give you a lump sum payment in exchange for assigning the rest of your installment payments to the finance company. This is essentially the same concept as taking a lower lump sum award as you get some of your money now, and forfeit the remaining amount to the finance company. For some injured workers that have settled their case, this makes sense, but not as much for others.
Through a settlement, you can often ensure ongoing coverage of future medical treatment. If the settlement is on an “accepted liability basis,” the insurance company would remain responsible for any medical treatment that is reasonable, necessary, and related to the work accident for the remainder of the injured worker’s life. However, if a new incident further aggravates the injuries, or the treatment is unreasonable or unnecessary, the insurance company would be entitled to contest the treatment and deny providing payments for it. Settling a worker’s compensation case with future medical treatment included provides some security in case the injured worker ever loses their private health insurance and needs to receive treatment for their work accident. The settlement will help alleviate some concerns you would have about who will pay for the treatment.Reasons Against Taking a Lump Sum Settlement
There are various reasons why you should consider taking a lump sum award, and they are very helpful in many situations. There are some downsides, however.
If you settle your worker’s compensation case, you typically cannot return to work for the same employer. Under M.G.L. Chapter 152, Section 48, there is a presumption that you cannot work for one month for every $1,500.00 in the settlement. For example, if you settle your case for $15,000.00, you are presumed to be incapable of working for that employer for 10 months. Some injured workers do not want to lose their job, and as a result, the settlement would not be appropriate.
Another thing to understand is that even if your employer agrees to a lump sum settlement, and all parties are happy with the settlement, the Massachusetts Department of Industrial Accidents (DIA) must approve the agreement. The DIA requires the proposed settlement be reviewed by a conciliator to ensure the paperwork is complete, and/or an administrative judge (AJ). If a judge reviews the agreement, the judge must ensure that the agreement is in the best interest of the employee. While this may sound like a difficult standard, most agreements are found to be in the employee’s best interest. Issues sometimes arise where the employee is still receiving significant treatment and is settling the case, or when an attorney does not represent the employee. This is why it is critical to have a Boston workers’ compensation attorney assisting you through the process and protecting your rights.Double Dipping
If you are receiving total disability workers’ compensation benefits because you are unable to work due to an on-the-job injury, by law are not allowed, to work. If you work and collect total disability worker’s compensation benefits, the insurance company may be able to bring a claim for fraud against you, seeking reimbursement of the money they paid. Similarly, you cannot collect unemployment benefits while also collecting total disability workers’ compensation benefits. This could be considered double dipping and is expressly forbidden. There are circumstances where an injured worker can collect unemployment or work part-time while also receiving partial disability worker’s compensation benefits. To understand your situation best and what rights you have in regards to returning to work and benefit eligibility, you should speak with your experienced Boston legal team.Calculating Workers’ Compensation Lump Sum Benefits
After being injured at work and setting up a claim with the employer’s workers’ compensation insurance company, one of the first things that happens is your worker’s compensation weekly check amount must be calculated. The weekly wage is based upon an average of the wages you earned over the past year prior to the accident. This figure is referred to as your average weekly wage (AWW). If you are completely unable to work from any job, you can collect total disability benefits, which are calculated as 60% of your average weekly wage. If you are able to work but with restrictions, you are often able to collect partial disability benefits, which reflect 45% of your AWW. If a doctor determines you are unable to work permanently, you may be able to collect permanent and total disability benefits, which are calculated as 66% of your AWW.
A worker’s compensation settlement is a reflection of future time missed from work. For example, it may reflect a year of you being unable to work. Instead of receiving workers compensation checks every week for a year, you would receive them all at once through a lump sum payment. The amount of this settlement is dependent upon how much you were making prior to the accident, and whether the settlement is for total, partial, or permanent disability benefits. One key point to remember is that a worker’s compensation settlement does not include any payments for pain and suffering. Having an experienced workers’ compensation attorney on your side is critical to ensuring you receive as much money as possible in a lump sum settlement.
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