How do workers’ comp settlements work?
Answer
Workers’ compensation settlements, uh, take primarily two different forms. The first type of settlement is called a denial and dismissal. These typically occur in cases that are highly contested—cases where both sides agree that rather than have the injury officially recognized and memorialized, you’re going to settle the case for some amount of money to have it dismissed, denied, and not considered workers’ comp. This often happens when it’s a close call as to whether someone was even an employee, or whether the medical evidence genuinely shows disability, or when there is some other dispute about whether the case qualifies for benefits. In those situations, going forward with a petition and having a judge decide it carries the risk that you could lose and get nothing. Or, you could settle for an agreed amount, and in exchange the case is denied and dismissed. These denial-and-dismissal settlements tend to be smaller—though not always—because they involve more uncertainty. Still, they are an important part of the system because they allow you to receive compensation for something you might otherwise get nothing for.
The second type of settlement is called a commutation, or a lump sum settlement. This typically has more value. It applies to someone who is officially entitled to workers’ comp benefits, has been receiving them for some time, and has been getting medical treatment. Both sides may determine that it is in everyone’s best interest to settle—sometimes because you can’t stay on partial disability benefits for more than six years, sometimes because the future is unpredictable, or sometimes simply because a lump sum now is better than uncertain weekly checks later. In a commutation, you receive a lump sum of money, but you also sign away your right to all future workers’ compensation benefits. Your weekly checks stop, and even medical treatment related to your injury will no longer be paid by the insurer. Any future medical costs become your responsibility. These settlements must be reviewed and approved by the Workers’ Compensation Court, and they involve significant paperwork because they effectively end your case forever. Occasionally, someone may settle by commutation but “leave the medicals open,” meaning the weekly checks stop in exchange for the lump sum, but the insurance company continues paying for medical treatment going forward.
If you’re considering settlement options, our RI workers comp lawyers can help you understand which structure fits your situation. You can also review our RI workers’ comp benefits for broader settlement guidance. Related areas like ongoing medical coverage options or future care protection may help clarify the implications of these settlement types.
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