Only a small portion of California workers’ compensation cases end up going to a hearing before a workers’ comp judge. Most workers’ comp cases in the state are resolved through settlement. You will likely have multiple opportunities to negotiate with your employer—or more likely its insurance company—throughout the course of your claim.
Whether you accept a settlement offer depends on several factors, including the amount of the offer, the severity of your injury, your financial situation, and your desire to close out your workers’ compensation case. If the offer is good enough and you need the money now, it might be worth accepting a lower sum to avoid the hassle of a workers’ comp hearing. On the other hand, if the insurance company disputes the severity of your disability and you have reliable medical evidence supporting your claim, it may be worth it to try to convince a workers’ comp judge to award you more.
Wait at least until have reached maximum medical improvement (MMI) before considering a settlement offer. Before that point, you won’t know how much your case is worth. Once you reach MMI, your doctor will tell you if you have a permanent disability that would result in a permanent disability award. (For more information, see Can I Get Permanent Disability Benefits in My Workers’ Compensation Case in California?)
In California, there are two ways to settle your workers’ compensation case. The first, more common method is called a “Compromise and Release.” The second type of settlement is called a “Stipulated Findings and Award.”
With a compromise and release, you are agreeing to close out your workers’ compensation case for good in exchange for a lump sum payment. This means any future medical care related to your injury will not be covered by workers’ comp, and you won’t be able to reopen your case if your condition worsens. However, you will receive a larger payment up front and you won’t have to take your chances at a hearing.
Before agreeing to this type of settlement, make sure that your condition is stable and that you won’t need any more treatment or that the lump sum payment includes the cost of future medical bills. A compromise and release is final. As long as you signed the agreement voluntarily, workers’ comp judges usually won’t let you take it back—even if you end up needing more money later.
The other type of settlement is a Stipulated Findings and Award. With this type of settlement, you and the insurance company agree on your disability rating and the amount of your benefits. You will receive biweekly payments rather than a lump sum—unless you can show a financial need for part or all of your benefits to be paid up front. Your future medical treatment will be covered by workers’ comp, but you will still need to seek treatment from doctors who are approved through workers’ comp. Another benefit of this type of settlement is that your case can be reopened if your condition worsens within five years of your injury.
Any settlement that you agree to will need to be approved by a California workers’ compensation judge. You, or your lawyer if you have one, will file paperwork with the California Workers’ Compensation Appeals Board detailing the terms of the agreement. A workers’ comp judge will usually hold an informal hearing to make sure you understand the agreement and that the terms are fair. If the judge approves the settlement, which is often the case, you will receive your lump sum payment within 30 days.
Unless your injury was minor and you healed completely, you should consult with a lawyer before settling your case. This is especially true if you are considering a compromise and release, which will take away your right to seek additional benefits or medical treatment. A lawyer can tell you how much your case is likely worth, evaluate settlement offers, and negotiate with the insurance company for a higher sum. A lawyer can also make sure that the settlement agreement doesn’t ask you to waive any rights that you shouldn’t give up. To learn more, see our article on what a good lawyer can do for you in your workers’ comp case.