By: Ken David, Esq.
It is that time of year when you want to close your files and claimants want some holiday money. With that in mind, let’s review some core aspects of settlements.
- There are two types of final settlement: Liability and No Liability. You can always structure a
settlement as Liability. To settle on a No Liability basis, you either
must have denied the entire claim or only paid medical (no indemnity). You
can actually settle an “accepted” medical only claim on a no liability
basis because if you have not paid indemnity, it is legally not
- Work comp settlement vs. Resignation/Releases: You can only settle the workers’ comp claim in the
workers’ comp settlement document (known as a Stipulation). The Board will
reject any language referencing Resignation or Release of employment
claims. However, you can settle other issues on separate documents. Those
documents are settlements between the employer and the claimant and do not
involve the insurance company or TPA.
- Child support liens:
Child support liens must be resolved before submitting the Stipulation to
the Board. If less than the full amount of the lien is being paid, then
there must be documentation from Child Support Enforcement stating their
agreement to a compromise of the outstanding amount. Even if there is not
a lien on file with the Board, if the employer or insurer/TPA has notice
of a lien (or order), then it must be addressed.
- Medical bills:
Any outstanding medical bills should be resolved before the claim is
settled or as part of the terms of the settlement. You do not want to be
litigating, or even debating with the claimant, after the Board approves
the settlement about whether a bill associated with treatment was
authorized or not. When in doubt, be clear on who is responsible.
- Finality of settlement: Settlements are not final until the Board approves the
Stipulation. Either party can withdraw from the settlement until that
point. This feature in workers’ compensation is different than in other
areas of litigation where a verbal agreement on settlement is binding.