You turned down the settlement offer by the workers’ comp insurance company. It wasn’t enough money. It barely covered your lost wages and medical but nothing for the future, and you have a lot of other bills that you want to pay off and get out of the hole. You have a decent case and your chances of winning are better than the insurance company’s chances, so you’re thinking you’ll have a better chance getting the judge to order the insurance company to pay you a lump sum settlement. But, wait, unfortunately, the judge can’t order the insurance company to pay you a nice, lump sum settlement. Lump-sum settlement is only by agreement of the parties – you and the insurance company. The only authority the judge has is to decide whether your case is not compensable or compensable. If it’s compensable or a covered case, the judge will order payment of lost wages and medical benefits accordingly. A workers’ comp judge can’t award a lump sum settlement. However, you may be owed a past due amount of lost wage benefits. For example, you have been disabled and out of work for 12 weeks from 01/11/2017 to 04/05/2017 and entitled to $500 per week or $6,000 in past-due lost wage benefits. The employer and its insurer may be entitled to a credit of $330 per week for payment of unemployment benefits for those 12 weeks or $3,960 with a remaining past-due amount of $2040 still owed. Your medical bills were $5,000 and the settlement offer was $7,500. At a hearing, the judge is authorized to order payment of past-due lost wage benefits, minus any credit due employer and it’s insurer, or $2,040, and direct the insurer to pay your medical providers directly. The insurer will conform the medical bills to Fee schedule and pay less than the full amount. The judge orders a lump sum of $2346 payable to you ($2,040 in lost wages and 15% or $306 in late penalties). The judge’s order also provides for continuing lost wage benefits. However, these benefits are subject to suspension if the employer offers suitable light duty or the authorized doctor releases you to regular duty.
Keep in mind that any amounts payable to an injured worker and ordered by a workers’ comp judge are generally accrued past-due lost wages and not a lump sum of benefits. However, there is a provision to request an advance of future weekly benefits to prevent dire financial hardship. Generally, in our experience, the State Board has awarded lump sum advances of $1,000 to $4,000 for household medical bills and car repairs and in a rare instance $7,800 to save a client’s home. Certain prerequisites must be met including that 1) you must have received at least 26 weeks of weekly lost wage benefits; 2) there must be a proper application for the lump sum payment containing certain verified information and documentation; and 3) proper basis must exist to the satisfaction of the state board the lump sum is either in your best interests to prevent extreme financial hardship or is essential to your rehabilitation.
You are required to repay the lump sum with interest at 7% per year to be paid by shortening the period during which permanent partial disability benefits are paid in the future or by reducing your existing lost wage benefits until the advance is paid.