I get calls from people wondering about the benefits and downfalls of settling their workers’ compensation claim versus keeping their lifetime medical benefits. So, I wanted to share this information and, hopefully, help some of you out there by making you aware of the differences between keeping your lifetime medical benefits or settling your workers’ compensation claim.
Either way, there are good and bad things about both options when you’ve had to file a claim over a job injury. It really depends on the risks and benefits unique in each situation. Be informed so you can have a clear understanding of the peaks and pitfalls of each option. Being informed is the best way for you to make a decision about what is right for you. Every workers’ comp claim is different, and the same option is not going to be the right one for everyone.
- A lump sum settlement is a payout that comes in one large payment.
- Lifetime medical benefits is when the insurance company pays for your medical care. You do not have to worry about co-pays or deductibles.
- There are pros and cons of accepting a lump sum settlement or lifetime medical benefits.
- For a lump sum settlement, you no longer have to wait for approval from the workers’ compensation insurance company because they no longer involved, but you may have to resign from your job and you will lose your right to any future benefits if complications occur later.
- For lifetime medical benefits, the insurance company handles all of your medical bills, but you will have to prove that your required treatment is reasonable, necessary, and related to your work injury.
Lump-Sum Settlement of a Workers’ Compensation Claim
Pros of a Lump Sum Settlement:
- No more waiting for approval – Once you settle the claim, you are in the driver’s seat; no more waiting for approval from the workers’ compensation insurance company because they are no longer involved! You decide what treatment you do or do not want.
- You get to see any doctor you want – After the claim is settled, you are in charge of your medical care. Don’t like your doctor? No problem, find a new one who you are comfortable with. Get a second opinion. You are the sole decision-maker in your medical care after you settle the claim.
- You get a lump sum of money- Instead of the workers’ compensation insurance company paying the doctor for medical care, they pay you that money. Use it for medical care or any other thing you want. You have total freedom of choice.
- In some cases, you can work out a structured settlement agreement that will provide you with a certain amount of money paid out during regular periods of time rather than taking everything at once. This can make it easier to manage the money and what you will use it for.
Cons of a Lump Sum Settlement:
- Giving up Lifetime Medical benefits – When you settle your workers’ compensation claim for a lump sum, you give up your lifetime medical benefits in return for a lump sum of money. From that point forward, the cost of medical care becomes your own responsibility.
- Liens on settlement – Medicare, Social Security, child support and Medicaid can have liens on the settlement money. Medicare goes so far as to say it has an interest in the workers’ compensation settlement if there is a reasonable expectation of you receiving Medicare benefits within 30 months after settling your workers’ compensation claim. This can make the settlement process long and drawn out because approval from one or more entities may be required. You most definitely need to talk to an attorney if you are in this situation and are interested in taking a settlement. The paperwork needs to be carefully worded to protect your interests.
- Resignation – Resignation of your employment is typically required as part of the settlement terms. However, if you dislike your job or if you are injured to the point that you can never return to your pre-injury employment, this may not be an issue for you. This is an insurance issue, not an employment issue. The insurance company doesn’t want to pay you a lump sum of money for your hurt back and then you hurt your back at work the very next day and they are stuck with a new workers’ compensation injury claim.
- Settlements are final – Once you settle a claim, there is no going back to add this or that. You need to make sure you get it right on the first try! All workers’ compensation benefits will end and the amount of money you receive will be final. Future medical care, and, more importantly, future medical expenses will become your responsibility.
- If you’ve been left with a permanent partial disability or a permanent disability, most law firms and medical professionals will recommend that you don’t consider a lump sum payment until you have reached what is known as maximum medical improvement. This means that your condition will not improve any further with more treatment. This way you have the lowest chance that something like a surprise surgery will come up in the future after you’ve given up coverage.
Lifetime Medical Benefits
Pros of Lifetime Medical Benefits:
- The insurance company pays for your medical care- you don’t have co-pays and deductibles to worry about. You don’t have to stay employed with the original employer. The insurance basically covers all of your future medical treatment and future medical costs.
Cons of Lifetime Medical Benefits:
- The burden of proof is on you forever– Just because the doctor says you need a specific treatment or diagnostic test does not mean that the insurance company will approve it. This means that even though you have the “lifetime” medical benefit, even if you have an Award Order stating so, you still have to show that the current treatment requested is reasonable, necessary, and related to the workplace injury at every turn. The insurance company does not assume anything.
- Medical providers generally require the insurance company to pre-approve your treatment – Medical providers have been burned by workers’ compensation insurance companies too many times. Having lifetime medical benefits does not mean that you can just go to the doctor whenever you want. The insurance carrier still has to pre-approve everything and they can (and will) deny anything that they believe does not meet the standard of reasonable, necessary, and related to the workplace injury. This process slows down medical treatment.
- You may not get lost wages when you are out of work for surgery– Lifetime medical benefits does not always mean that you are entitled to lost wages. If the doctor takes you out of work for a medical procedure, you may be off of work without pay. You may even lose your job if you are out of work too long. This is a case by case situation depending on your Award Orders for lost wages. Sadly, this happens more often than you might think. I get calls from people who have surgery 5 years after their injury and are not eligible for lost wages because too much time has lapsed since they last collected lost wages pursuant to an Award Order.
- Litigation – If the insurance carrier denies treatment, you will likely be going to a hearing so the Virginia Workers’ Compensation Commission can determine whether the requested treatment should or should not be covered under your claim. This is expensive, time-consuming, and delays treatment for injured workers. However, it is within the insurance carrier’s right to take a treatment issue before the Commission for a ruling. It is very common to go to a hearing 3 or 4 or more times with disputed medical treatment and tests. Like I said earlier, the burden of proof is on you!
Protecting Your Claim
If you’ve been injured in an accident at your place of employment, you may already know to file a work-related injury claim, but complications often arise in the small print and details of dealing with Workers Compensation in Virginia.
- File an accident report with your supervisor immediately. After you’ve received medical attention, the very first priority in your mind should be to notify your employer that there was an accident and an injury. Although you legally have up to 90 days to file the accident report, the sooner the better, and if you miss the deadline, you have no claim to Workers’ Compensation in Virginia.
- Your employer should file a First Report of Injury within 7 days after the accident. If your employer fails to file this paperwork, contact a Workers’ Compensation attorney.
- Follow all of your doctor’s instructions to the letter. Failure to do so will be used against you by your employer and/or the workers’ compensation insurance adjuster.
- You’re entitled to treatment, medication, and travel expenses to and from your medical appointments. If your employer doesn’t cover these expenses or refuses to do so, contact a Workers’ Compensation attorney immediately.
Remember, if you’ve been injured, you have rights through a work-related injury claim under the law. Contact an attorney who has handled Workers’ Comp in Virginia to learn more about that you can do to fortify your Workers’ Compensation case.
If you are dealing with a work injury or if you would like more information on the Virginia workers’ compensation system, order my book, “The Ultimate Guide to Workers’ Compensation in Virginia,” or call our office today at (866) 515-1654 for a confidential free consultation.