When a worker is injured on the job, he can file for Alaska workers’ compensation benefits for medical care and wage replacement compensation. Typically, this compensation is awarded on a weekly basis. The injured worker receives a check on an ongoing basis until the worker is fully healed and back on the job. This may last for a period of weeks, months, or even years. While this system can be effective, there are times when it is in the best interest of the injured worker to settle their work injury claim rather than receive small payments. But what exactly does that mean? And is it the right thing for your situation?
What Is a Workers’ Compensation Settlement?
In general, a settlement is an agreement between two parties to resolve a legal matter. For injured workers, it occurs when the worker accepts a lump sum (or sums) of money and ends the receipt of weekly payments. A settlement can provide an employee the same benefits as the weekly payments—medical care and wage replacement compensation—and hopefully end any hassle with managing the smaller, more frequent payments. There are two main types of settlements:
- Lump sum. A lump sum settlement is exactly what it sounds like. The injured worker receives one large sum of money at one time and will not receive any more compensation in the future for the same injury.
- Structured. In a structured settlement, the lump sum is divided into smaller payments and paid out over a period of time agreed upon in the settlement. This can be handed out over the course of a year, ten years, or some other arranged time frame.
Factors to Consider When Contemplating a Settlement
While this may sound like an easy arrangement, settling a workers’ compensation claim is not appropriate for every situation. A settlement is legally binding and final. Once the agreement is signed, it is not typically possible to revisit the claim or make changes. So, it is important to consider:
- The nature of the injuries. It is critical to fully understand all injuries before considering a settlement. Permanent injuries and injuries that will require complex, ongoing medical care can be extremely expensive. The outlook for and treatment of these injuries can change over time, and injured workers may need some flexibility in the type and amount of compensation necessary to properly address their conditions.
- Expectations for recovery. At times, it is impossible for care providers to say exactly what the future will hold with respect to a worker’s medical care and prognosis. The question of future surgeries, therapies, or other interventions should be considered. These treatments can be very expensive, and it’s important to have either ongoing benefits or enough compensation to cover this care. On the other hand, if a worker’s expectation for recovery is fairly solid, it may be a good option to settle the claim.
- Likelihood of receiving continued benefits. A settlement is a guaranteed benefit once awarded. Weekly payments are evaluated periodically as the claim continues. In some cases, it can be possible to settle a claim with the insurance company before the weekly benefits run out or if there are concerns that the benefits may be denied in court.
- Money management skills. For some, receiving a lump sum of money can be tricky. It may be very tempting to spend the money right away. As a consequence, the money may not be there later when it is needed to cover medical care or wages lost due to missed future work. It’s important to consider your own self-control and money management skills when thinking about a settlement.
- Effect on other benefits. In some situations, the injured worker or his family may also be receiving other types of work injury-related or government benefits. A settlement may affect eligibility for these benefits and/or how much compensation can be received from other areas. Understanding the overall impact of a settlement will help injured workers make the best decision for their individual situations.
An Experienced Attorney Can Help Injured Workers Understand Their Rights
A settlement may only be allowed at certain stages of a claim—in Alaska, the injured worker must reach “medical stability” before a settlement is permitted—and it may not always be in the best interest of the injured worker and his family. However, there are times when these agreements can help employees move forward from their injuries most effectively. At The Law Office of Ben Crittenden, attorney Ben Crittenden has helped many injured workers obtain all the compensation they deserve. He is here to help injured Alaskans understand their rights and gain a complete picture of all their options. If a settlement is right for you, Ben can help negotiate with the insurance company to ensure the injured worker obtains all the compensation he deserves. Too often, injured workers and their families are short-changed by these insurance companies and forced into quick settlements that are too low or not appropriate for their unique situation. These agreements are final, and an inappropriate settlement can have negative effects on an injured worker for years to come.
Ben has been there before with other clients, and he understands the games insurance companies may play. He is a knowledgeable, effective advocate for injured workers, and he can help you and your family obtain the best possible outcome. Call Ben today in his Anchorage office or fill out the contact form on this page to get in touch directly with Ben.