What Types of Settlements Are Offered?
Workers’ compensation is a type of insurance that provides benefits to employees who are injured or become ill as a result of their job. In the event of a workplace injury or illness, an employee may be entitled to different types of settlements through workers’ compensation. These can include lump-sum settlements, structured settlements, medical benefit settlements, vocational rehabilitation settlements, and death benefit settlements. The type of settlement an employee may receive will depend on the circumstances of their injury or illness, as well as the laws and regulations of their state. Employees need to understand their rights and options when it comes to workers’ compensation settlements, here’s a deeper dive into what some of those settlements are.
Lump-Sum Settlements
A lump-sum settlement is a one-time payment made to an employee who has been injured on the job and is receiving workers’ compensation benefits. It is an agreement between the employee and the workers’ compensation insurance company, in which the employee agrees to receive a single payment in exchange for giving up any future rights to receive benefits related to the injury.
The amount of the settlement is typically determined based on the severity of the employee’s injury, the amount of lost wages, and any future medical expenses that may be incurred. The insurance company will conduct an evaluation of the employee’s case to determine a fair settlement amount.
Once the settlement amount is agreed upon, the employee will receive a lump-sum payment, which represents the total value of their workers’ compensation claim. This payment is typically tax-free and can be used to cover any expenses related to the injury, including medical bills, lost wages, and other costs.
Important note: Lump-sum settlements can have both advantages and disadvantages. While they provide employees with a significant amount of money upfront, they also require the employee to give up any future rights to receive workers’ compensation benefits related to the injury. Additionally, the settlement amount may be less than what the employee would receive if they continued to receive ongoing workers’ compensation benefits. Employees should carefully consider their options before agreeing to a lump-sum settlement, as it can be difficult to negotiate with insurance companies, and the decision to accept a settlement is final.
Structured Settlements
Structured settlements are a type of compensation that an employee can receive in a workers’ compensation case. Unlike lump-sum settlements, structured settlements involve a series of payments over time, rather than a single payment.
These types of settlements are typically negotiated between the employee and the employer’s insurance company, and the payments are made on a predetermined schedule. The amount and timing of the payments are based on the severity of the injury, the extent of the employee’s disability, and any future medical expenses that may be incurred.
Structured settlements are designed to provide the employee with a steady stream of income over a period of time, rather than a lump sum payment. This can be beneficial for employees who are unable to work due to their injury or illness, as it provides them with a consistent source of income to cover their expenses.
In addition to the regular payments, structured settlements may also include a lump-sum payment at certain intervals, such as every five years, to help cover larger expenses.
One advantage of structured settlements is that they provide employees with a predictable source of income, which can help them better plan for the future. Additionally, the payments are typically tax-free.
Important note: Structured settlements may not be the best option for everyone. They can be complex to negotiate, and the employee may not receive as much compensation as they would with a lump-sum settlement.
Medical Benefit Settlements
Medical benefit settlements are a type of compensation that an employee can receive in a workers’ compensation case. They are designed to provide compensation specifically for medical expenses related to the employee’s injury or illness.
In a medical benefit settlement, the employer or the employer’s insurance company will agree to pay for the employee’s medical expenses related to the injury or illness, either for a set period of time or for the duration of the employee’s life. This can include expenses such as doctor’s visits, surgeries, prescription medications, physical therapy, and other medical treatments.
The amount of the medical benefit settlement is typically based on the severity of the injury or illness, the cost of medical treatments, and the employee’s future medical needs. In some cases, the employee may also receive compensation for lost wages or other expenses related to the injury or illness.
Medical benefit settlements can be beneficial for employees who require ongoing medical treatment for their injury or illness. They provide the employee with the peace of mind of knowing that their medical expenses will be covered, which can help alleviate some of the financial stress that often comes with a workplace injury.
Important note: Medical benefit settlements may not provide compensation for other types of damages, such as pain and suffering or lost wages. In some cases, employees may be able to negotiate additional compensation for these damages.
Vocational Rehabilitation Settlements
Vocational rehabilitation settlements are a type of compensation that an employee can receive in a workers’ compensation case. They are designed to provide support for employees who are unable to return to their previous job due to an injury or illness, by helping them to obtain training and education in a new field or profession.
In a vocational rehabilitation settlement, the employer or the employer’s insurance company will typically provide the employee with funding to cover the cost of vocational rehabilitation services, which may include job training, career counseling, and educational expenses.
The goal of vocational rehabilitation is to help the employee obtain the skills and training needed to return to the workforce in a new capacity, and to increase their earning potential. This can be particularly beneficial for employees who are unable to return to their previous job due to their injury or illness, as it provides them with a path forward to a new career.
The amount of the vocational rehabilitation settlement is typically based on the cost of the vocational rehabilitation services, as well as the employee’s future earning potential in their new profession.
Important note: Vocational rehabilitation settlements may not provide compensation for other types of damages, such as pain and suffering or lost wages. In some cases, employees may be able to negotiate additional compensation for these damages.
Death Benefit Settlements
Death benefit settlements are a type of compensation that is provided to the dependents of an employee who has died as a result of a workplace injury or illness. These settlements are designed to provide financial support to the surviving family members, including spouses, children, and other dependents.
In a death benefit settlement, the employer or the employer’s insurance company will typically provide the surviving family members with a lump-sum payment to cover the cost of funeral and burial expenses, as well as ongoing financial support. The amount of the settlement is typically based on the employee’s salary at the time of their death, as well as the number of dependents who are eligible to receive benefits.
In addition to the lump-sum payment, death benefit settlements may also provide ongoing financial support to the surviving family members. This can include a regular payment to cover living expenses, such as rent, utilities, and other bills.
The amount of the ongoing payments is typically based on the employee’s salary at the time of their death, as well as the number of dependents who are eligible to receive benefits. In some cases, the ongoing payments may continue for the duration of the dependent’s life, or until they are no longer eligible to receive benefits.
Important note: Death benefit settlements may not provide compensation for other types of damages, such as pain and suffering or lost wages. In some cases, dependents may be able to negotiate additional compensation for these damages.
Conclusion
It’s highly recommended that employees consult with a workers’ compensation attorney to help them determine which type of settlement is right for them and their circumstances. It also ensures that they receive fair compensation for their injuries, illnesses or losses. All this information and further questions can be better covered more in-depth with conversations with our attorneys here at Solov and Teitell!
