Many workers like the idea of receiving a lump sum settlement payment instead of having to deal with the complicated process of filing a workers’ comp claim and often, subsequent appeal. While avoiding these processes may seem like a good idea, it may not be in your best interest to do so. It truly depends on what you are receiving and what you are being asked to give up.
Understanding What a Workers’ Compensation Settlement Is
A settlement is an agreed-upon sum of money, paid either in a lump sum or in monthly, annual, or another type of installment plan. If you accept a settlement, you are in effect, settling your workers’ comp claim by giving up certain other benefits. New Jersey allows for two types of settlements – Section 20 and Section 22 settlements.
Section 20 Settlements:
If the workers’ compensation insurance company denies or disputes any part of your claim, you are eligible for a Section 20 settlement. This settlement is considered to be a full and final settlement which closes your claim.
You will give up your right to all workers’ comp benefits, and you will not be able to reopen your claim to request additional benefits – including for future medical care if your condition worsens. Many insurance carriers will push for these lump sum settlements. However, this may be in the best interest of the insurance company, but not the injured worker.
Section 22 Settlements:
Section 22 settlements can be used to resolve any workers’ comp claim, including those accepted by the insurance company. When you use this instrument to settle your claim, both you and the insurance company agree on a specific permanent disability rating. As part of the settlement agreement, the insurance company consents to pay your permanent disability benefits to you in installments. These installments will be based on New Jersey’s schedule of benefits.
Unlike Section 20 settlements, agreeing to a Section 22 settlement does not preclude your ability to receive future medical care or your right to reopen your workers’ comp claim to ask for additional disability benefits. However, you must reopen the claim at least two years before the last payment is due under the original settlement agreement.
When a Claim Can be Settled
New Jersey allows claimants to settle a claim at any time, unlike some other states. Nevertheless, it is often recommended that you wait until you reach what is referred to as maximum medical improvement (MMI) before settling your claim. MMI occurs when your doctor considers your condition to be stable, meaning you are unlikely to improve with additional treatment. Settling before this point means you may lose out on valuable benefits, including permanent disability benefits.
Reaching Out to a Knowledgeable Attorney
Calculating the settlement value of a New Jersey workers’ compensation claim is a complex and tedious process. Ensuring the amount is fair will depend on several factors. These include the severity of the injury, pre-injury wages, whether you will be able to return to work, and whether you will require ongoing medical care. Finally, any conflicting evidence will also need to be considered (for instance, any suggestion that your injury is not related to your employment).
While every claim is different, you should seriously consider reaching out to a workers’ compensation lawyer in Newark, or another area in New Jersey, prior to accepting a settlement offer. Unfortunately, many workers accept inadequate settlements when they don’t have the benefit of legal counsel.
The New Jersey Division of Workers’ Compensation must review every settlement before it can be finalized. Both Section 20 and Section 22 settlements require a series of forms to be filled out, and for Section 20 Settlements, you will be required to attend a settlement hearing. These processes can be easier to complete with a knowledgeable attorney by your side. It is illegal for an employer to offer payment in lieu of providing workers’ compensation benefits such as temporary disability pay and medical treatment.
If you have suffered an injury while you were at work, our dedicated legal team at Kreizer Law can assist you with your workers’ compensation claim. We invite you to reach out to us with any questions you may have or to book your free case evaluation – call or contact us online today.