There are two basic types of settlement: Stipulation with Request for Award; and Compromise and Release.
Stipulation with Request for Award is an open medical settlement. There is a “stipulation” or agreement about the percentage of permanent disability; the temporary disability paid; and that the insurance company will provide medical care for specific body parts for as long as you need it. If you go back to work for the same employer this is the most frequent type of settlement. A Stipulation with Request for Award is usually paid off in small payments every two weeks. In cases where the permanent disability is 70% or more, you will get payments for life. A Stipulation with Request for Award may be “reopened” by filing a petition to reopen within five years from the date of injury. Ordinarily, a petition to reopen is filed where there “new and further” disability. A case may be reopened for a number of reasons including a general worsening or a need for new surgery and temporary disability.
A Compromise and Release is a global settlement of all issues including future medical care for a lump sum.
If you are on Social Security Disability and/or entitled to Medicare, there are special requirements for a Compromise and Release. Special care must be taken to protect your Social Security Disability payments. A lump sum workers’ comp settlement may cause you to lose your social security benefits because of offset rules. Complicated calculations and provisions in the settlement papers may avoid or minimize the offset.
Often you will be required to “set aside” a certain amount of money in a “Medicare Set-Aside” account, to be used for medical care for the work injury. If the money in the Medicare Set-Aside account is spent down appropriately for medical care, you may be able to get Medicare to provide medical treatment for the work injury.
Watch out for Permanent Disability Advances! Once your condition is permanent and stationary the insurance company will begin making permanent disability advances. These are part of your settlement. At the end of a case, the insurance company will request a credit against the settlement for the amount of the permanent disability advances.