While there are many benefits to settling your workers’ compensation case, you will also likely be giving up significant rights. Because settlements are often final, it’s wise to consult with an Arkansas workers’ comp lawyer before you sign any agreements. (To learn how much that might cost you, see our article on attorneys’ fees in Arkansas workers’ comp cases.) Below, we explain the rules on workers’ comp settlements in Arkansas.
A settlement is a voluntary agreement between you and the insurance company to resolve your workers’ compensation case. In exchange for an agreed-upon sum of money, you give up some or all of your rights in your workers’ compensation case. In Arkansas, a final settlement is different than a request for a lump sum payout of benefits. Both are described below.
If your claim was denied or there is a dispute over your benefits, you and the insurance company can agree to settle your case with a joint petition. In these situations, a “full and final” settlement is common. This means that you agree to give up all rights in your workers’ comp case in exchange for a lump sum. The lump sum is all you will ever get for your injury; if your condition gets worse after you settle, you usually cannot reopen your case to ask for more money.
Not all final settlements are paid in a lump sum. In some cases, especially those involving permanent and total disability, you and the insurance company might agree to have benefits paid in installments over a period of years, rather than in a lump sum.
In most cases, a final settlement means that you give up your right to future medical care for your injury. However, in some cases, the insurance company might agree to leave future medical care open—for example, if you have severe injuries that require a significant amount of future treatment.
If the insurance company has accepted your claim and is voluntarily paying you, you can request a lump sum payout of your benefits. If the Workers’ Compensation Commission approves your request, you will receive the present value of your total benefits. This means your benefits will be added up and then reduced by 10%, compounded annually. Your life expectancy will also be factored into your lump sum calculation.
Unlike a joint petition settlement, a petition for a lump sum payout of your benefits does not close out your workers’ comp case for good. Your medical care will continue to be covered, and you can petition for additional benefits if your condition worsens.
All workers’ comp settlements must be approved by the Arkansas Workers’ Compensation Commission. However, the process is different for joint petition settlements and petitions for lump sum payouts.
The parties must submit a document called a “joint petition” to the commission, detailing the terms of the settlement and why it is in the worker’s best interests. A workers’ comp judge will hold a hearing and ask the parties questions in order to determine whether the settlement should be approved.
If you want a lump sum payout of your weekly benefits, you must file a Claimant’s Lump Sum Request (Form L) with the Arkansas Workers’ Compensation Commission. The insurance company must also fill out a portion of the form, stating whether it agrees to your request. If both of you agree to the lump sum payout, the commission may approve it without a hearing. However, if the insurance company disagrees, a judge will hold a hearing before making a decision.
The judge will not approve your request if your employer can show that the lump sum payout would substantially threaten its ability to continue operations.
The amount of the settlement varies widely based on the severity of your injury, your ability to work, and your pre-injury wages. Conflicting evidence in your case—for example, as to whether your injury is work-related or whether you are permanently disabled—will also impact your claim’s settlement value.
To get a general idea of how much you might be entitled to, see our article on Arkansas workers’ comp benefits. However, a claim’s settlement value depends on many factors, which can only be evaluated by a workers’ comp lawyer familiar with your case.
It’s important to understand the full the extent of your injuries before you settle your claim. For that reason, it’s almost always best to wait until you have reached maximum medical improvement. This is when your doctor finds that your condition has stabilized and assesses whether you have any permanent disability.You should also consult with an Arkansas workers’ comp lawyer before you agree to a settlement, as it can be difficult to know whether you’re getting a fair deal and whether the settlement protects all of your interests. This is especially important for a joint petition settlement, which is final and generally cannot be undone.