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 Iowa workers’ comp lawyer before you sign any agreements. (To learn how much that might cost you, see our article on attorneys’ fees in Iowa workers’ comp cases.) Below, we explain the different types of settlements and how they’re approved in Iowa.
A settlement is a way to resolve your workers’ comp case without a formal hearing. It’s a voluntary agreement between you and the insurance company, specifying the amount of money you will receive for your workers’ comp case. In most cases, you are agreeing to give up some or all of your workers’ comp rights in exchange for this sum.
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 Iowa 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.
In Iowa, there are two main types of workers’ comp settlements: agreement settlements and compromise settlements. However, there are other possible arrangements, such as a combination of the two.
An agreement settlement is used when the insurance company has accepted your claim and agrees that you are owed a certain amount in workers’ comp benefits. This type of settlement does not close out your workers’ comp case. You will continue to receive weekly benefits based on the amount stated in the agreement, and you can continue to seek medical treatment through workers’ comp. And, if your condition worsens, you can seek additional benefits within three years of the last payment made under the agreement.
In certain cases, you can request for your benefits to be paid in a lump sum (called a “commutation”). However, this is the exception rather than the rule, and the insurance company and the workers’ compensation commissioner must approve.
Compromise settlements are used when you have a disputed workers’ compensation case—for example, if the insurance company denied your claim or disputes the degree of your permanent disability. These settlements are “full and final,” meaning that they close out your case for good. In other words, you are agreeing to give up all rights in your workers’ comp case in exchange for the agreed-upon sum of money. Your medical care will no longer be covered by workers’ comp, and you can’t ask for additional money if your condition worsens in the future. Payments are typically made in a lump sum.
All settlements must be approved by the Iowa Workers’ Compensation Commissioner. You and the insurance company will need to sign either an Agreement for Settlement form or a Compromise Settlement form and send it to Iowa Division of Workers’ Compensation.
The commissioner will review the terms of the settlement to make sure they are reasonable, supported by the evidence, and knowingly agreed to by the employee. If you have a lawyer, the commissioner will assume your lawyer looked out for your interests and will approve the settlement without much scrutiny.
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 Iowa 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 is final and generally cannot be undone.