Settling Your Workers' Comp Case in New Mexico

Understand the consequences of a workers’ comp settlement in New Mexico.

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

What Is a Workers’ Compensation Settlement?

New Mexico’s general policy is that periodic payments are in the best interest of the worker. However, lump sum settlements are generally allowed in the following three situations.

Return to Work

Employees with accepted claims who are entitled to weekly benefits can request a lump sum payout if they:

  • have returned to work for at least six months, and
  • are earning at least 80% of their pre-injury wages.

Your request must be approved by the New Mexico Workers’ Compensation Administration. If your request is approved, you will receive your total benefits in a one-time payment. However, your benefits will be reduced to their present value. New Mexico uses a 5% discount, compounded annually.

This is a partial settlements only. It 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.

Pay Off Debts

Employees with accepted claims may also ask the administration for a lump-sum payment of benefits if they:

  • have reached maximum medical improvement, and
  • need money to pay off debts that have accrued while they’ve been disabled by an injury.

However, you will typically receive only a partial lump-sum payment to cover your debts. The remainder of your benefits will continue in installments, and you will still be eligible for future medical care.

Full and Final Settlement

An employee can also enter into a “full and final settlement” with the agreement of the insurance company. This generally happens with disputed claims—for example, if you are appealing a denied claim or the extent of your permanent disability is in dispute. In a full and final settlement, the insurance company agrees to make a one-time payment to close out your workers’ comp case for good. In most cases, you will be required to give up your right to all future benefits. However, in some cases, the insurance company might agree to continue future medical treatment related to the injury. Because lump sum settlements are final, you cannot reopen your case later and ask for additional benefits, even if your condition gets worse.

Does a Settlement Need to Be Approved?

The New Mexico Workers’ Compensation Administration must approve all settlements. For any lump-sum settlement, you will need to submit a Petition for Lump Sum Payment to the administration. However, for full and final settlements, the insurance company will also need to sign off on the petition.

For full and final settlements, a workers’ comp judge will hold a hearing. The judge will review the terms of the agreement and make sure that:

  • you understand the terms of the settlement, including what rights you are giving up, and
  • the agreement is fair and provides substantial justice to you and your employer.

Once a full and final settlement is approved, it is binding and typically cannot be undone.

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 New Mexico 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.

Do I Need a Lawyer?

You aren’t required to have a lawyer in order to settle. However, it’s always a good idea to consult with a workers’ comp lawyer before agreeing to any settlement. Without a lawyer’s insight, 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 true for a full and final settlement.

Talk to a Lawyer

Need professional help? Start here.

How it Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you

Get the compensation you deserve.

We've helped 265 clients find attorneys today.

How It Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you