There is a lot of confusion and misinformation given by insurance companies and employers when it comes to a work comp insurance settlement. First of all, the only way to "settle" a work comp insurance claim is to agree to a payment of money and sign settlement documents that are submitted to the Iowa Workers' Compensation Agency for approval. If those settlement documents are approved, then you have a settlement.
More commonly, you will receive a letter from the insurance company stating that you have an impairment rating percentage (also known as a functional impairment rating) and based upon the rating, they will pay you a certain sum of money. Sometimes, they will not even send a letter, but rather just send a check which may or may not contain information about the rating and payment of PPD (permanent partial disability).
If you are wondering:
Can I cash this check?
Am I agreeing that this is all I am owed?
Is this my "settlement"?
What if I don’t agree with their numbers?
Will I owe taxes on this money?
The quickest way to get an answer to your questions is to give us a call at (641) 792-3595. We offer work comp insurance claim evaluations at no cost or risk to you. If you call our office and one of our work injury attorneys is not immediately available, then as to schedule a phone conference the same day. We will answer your questions and give you advice about the impairment rating and check that you received. If you are not ready to call us yet, then the general answer is that cashing the check-in a work comp case is not a settlement or an agreement that you have been paid all that you are owed. There are some exceptions to this, and it is best to call an attorney and send the paperwork that you received in order for us to give you the best advice possible.
Trying to settle a case on your own
Some injured workers will try to settle the case on their own which is almost always a bad idea for a number of reasons including:
1. The insurance company and their lawyers are not looking out for your best interests in the settlement documents. For example, if the proper social security offset language is not put in the settlement documents you may lose thousands of dollars in Social Security benefits. Another example is if you agree to a settlement that may pay you a lump-sum of money, then you are likely closing both your medical file and your weekly benefits. Therefore, if your employer fires you the day after the settlement is approved and you have closed your file then you are likely out of luck in your work comp. claim.
2. There is no standard "settlement" for injuries to your back, spine, head, etc. There are literally dozens of factors to determine how much your case is worth. You need the experience of an Iowa work comp. attorney who has seen hundreds of cases over the past few decades.
3. You do not know the details of Iowa law and maybe giving away tens of thousands of dollars. For example, if you have a scheduled member injury (hand, arm, leg, foot or eye) and previously had a condition to another scheduled member (note: the first injury does not have to be work-related as it could have been something you were born with) then you may qualify for benefits under the Iowa Second Injury Fund. However, if you do not settle your case correctly, you will be prohibited from bringing a claim against the Fund which can provide you with significant compensation.
4. Medicare's interests have to properly be taken in to account in every settlement or you can end up needing medical care in the future that both Medicare and the work comp insurance company will deny.
Generally, settlements are broken down between open and closed file settlements. (Note: It is rarely a good idea for an injured worker to try to negotiate a closed file on their own without legal help.)
AGFS (agreement for settlement)
This is a settlement where the parties reach an agreement upon the amount of disability to be paid to the injured worker. Depending upon the amount, some of the money will be paid lump-sum while the rest is paid weekly. If the worker is still employed with the employer where he was injured, then specific accommodation language should be used in order to preserve your right to review-reopening later on. An AGFS leaves your medical open and if done properly protects your case should the employer decide to terminate you because of your work injury later on. Your medical will remain open for the rest of your life so long as the treatment is needed because of your work injury.
AGFS with full commutation
This is a settlement that your employer and insurance company want you to agree to because it closes both your indemnity (meaning money paid for your injuries) and your medical care and treatment. This means if you are terminated a day later, a week later, a year later, etc. that you are prohibited from seeking additional work comp benefits because you closed your file. In a full commutation, all of the benefits are paid in a lump-sum, but you are giving up a lot in exchange.
This is a settlement that also closes by your medical care and money to be paid in exchange for a lump-sum payment. With this settlement, Social Security offset language can be used, but there are very specific requirements in order to preserve future Social Security benefits. Failing to use the correct language can cost you thousands of dollars. This is a settlement that is usually used when an injured worker also agrees to leave their job and waive any and all claims against their employer.
These are rarely used when an injured worker is representing themselves. These settlements can close the indemnity portion of the case while leaving medical open for future medical care and treatment. Once again, there are specific requirements that must be included in the settlement documents in order to preserve Social Security benefits, Medicare, etc.
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