1. High future medical costs and no insurance to cover them.
A primary consideration in deciding whether or not to accept the settlement of your Workers’ Compensation claim involves your projected future medical costs. If it is likely that you will need surgery, expensive medications, or other medical care following the date of your settlement it may not make sense to finalize your case. This is because almost all Workers’ Compensation settlements involve a complete buy-out for both lost wages and future medical expenses. Once your case is settled, the insurance carrier is no longer liable for future medical expenses.
No insurance company that will offer “full value” on future medical expenses. This means that the settlement offer is usually, if not always, a compromise figure. The bottom line is that if there are extensive medical needs, the settlement amount will likely not cover them.
It is possible, although extremely rare, for a Workers’ Compensation carrier to offer settlements with “open medical.” This means that they buy-out the indemnity or lost wage portion of the claim but keep the medical open. This is the best-case scenario for many claimants but extremely rare for the insurance company to agree to such a settlement.
When considering settlement, serious thought must be given to how future medical costs will be covered.
2. Unresolved Reimbursement Issues
One of common delays and/or barriers to settling your Workers’ Compensation claim involves Section 15-8 (d) of the New York State Workers’ Compensation Law. In short, this section allows the insurance carrier to seek reimbursement from a State agency for payments that they make on your claim. Their entitlement to reimbursement depends on whether they can prove that a significant pre-existing condition existed, among other things.
Whether or not the insurance carrier has met its burden under this section of the Workers’ Compensation Law and is entitled to reimbursement is a source of much litigation in Workers’ Compensation cases. Insurance carriers generally will not settle a compensation claim until a final ruling has been made on whether they qualify for this reimbursement. If they do qualify then the State agency, known as the Special Funds Conservation Committee, must also give authority and approval to the settlement amount. While Section 15-8(d) no longer applies to new accidents, the provisions of this law still affect many of the cases being settled today. The claimant and his attorney can do very little to speed up the process. Instead, they must wait until the issue is resolved before serious settlement negotiations can go forward. This process can take months into years and is most frustrating for the injured worker trying to finalize his claim.
3. The Need For Ongoing Medical Care
When a case is settled under Section 32 almost all insurance companies want to close the entire out including both lost wages and future medical expenses. This means that they want you to give up your right for future medical treatment as a result of your injury.
If you have concluded treatment and don’t expect significant medical costs in the future; it may make sense to enter into a Section 32 settlement. However, if you are concerned that you may need surgery, expensive medications or other costly medical care a Section 32 settlement may not be best for you.
The amount of the settlement offer dictates whether or not it makes sense to go forward with the settlement. Regardless, all claimants should be aware that once a case is settled there are no circumstances where the insurance carrier will change their mind and start paying for future medical costs.
In rare instances, insurance companies will settle only the indemnity portion of the claim and keep the medical file open. Unfortunately, most insurance carriers will not agree to a Section 32 settlement with open medical.
Do not confuse a Section 32 settlement with a schedule loss of use award. A schedule loss of use award always included open medical even if a one-time payment is being made.