Settling Your Workers' Comp Case in Hawaii

Understand the consequences of a workers’ comp settlement in Hawaii.

While there are many benefits to settling your workers’ compensation case, you will also likely be giving up significant rights. Because settlements are typically final, it’s wise to consult with a Hawaii workers’ comp lawyer before you sign any agreements. (To learn how much that might cost you, see our article on attorneys’ fees in Hawaii workers’ comp cases.) Below, we explain the settlement process in Hawaii.

What Is a Workers’ Compensation Settlement?

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.

Lump sum settlements are common in Hawaii. A lump sum settlement is where the insurance company makes a one-time payment to close out your workers’ comp case for good. This often requires you to give up your right to all future benefits, including medical coverage. And, if your condition gets worse, you cannot reopen your case and ask for more benefits. These settlements are also called “compromise settlements” or “washes” in Hawaii.

In some cases, especially those involving permanent and total disability, the insurance company may agree to an alternative arrangement. For example, the insurance company might agree to make periodic payments instead of a lump sum and continue to cover future medical care.

What Is a Request for Lump Sum Payment?

If your claim is accepted and you are receiving benefits, you can ask the Hawaii Department of Labor and Industrial Relations to approve a lump sum payout of your benefits. The department will only approve the lump sum payment if it’s in your best interests and would not impose an undue hardship on your employer. Your benefits will be reduced to their present value, using a 4% discount rate and taking into account your life expectancy and other factors.

A lump sum payment will discharge the insurance company’s liability for the disability benefits being paid out. However, it does not close out any other rights, including your right to future medical care. Lump sum payouts are not available for permanent total disability awards.

Does a Settlement Need to Be Approved?

The Hawaii Department of Labor and Industrial Relations must approve all workers’ compensation settlements. A hearing officer will typically meet with the parties to review the terms of the settlement agreement and make sure it’s in the best interest of the worker.

What Is a Good Settlement Amount?

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 Hawaii 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.

When Should I Consider Settlement?

It’s important to understand the full the extent of your injuries before you settle your claim. For that reason, settlements generally happen after the worker reaches 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 a Hawaii 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 compromise settlement, which generally cannot be undone.

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