If you have an Indiana workers’ compensation claim, you’ll probably consider settlement at some point. While settling a workers’ comp case can be advantageous, it also involves significant risks. Before signing on the dotted line, it’s important to understand exactly what rights you are giving up.
In Indiana, workers can resolve disputed claims with a full and final settlement (also called a “Section 15” settlement). In exchange for a lump sum payment, you typically give up your right to all workers’ comp benefits, including medical treatment, disability payments, and vocational rehabilitation. In other words, the lump sum is the only money you will ever receive for your injury, even if your condition unexpectedly worsens in the future. (To learn more about what you might be giving up, see our article on Indiana workers’ comp benefits.)
This type of settlement usually involves a lump sum. However, in certain cases, you and the insurance company might agree to a structured settlement instead. In a structured settlement, you receive your payment in installments over a period of time. This could be beneficial, for example, if you have catastrophic injuries and won’t be able to work again.
If your claim is accepted and there is no dispute, you and the insurance company can enter into an Agreement to Compensation of Employee and Employer. The agreement will specify the types of benefits you are entitled to and how much you will receive. Benefits are paid on a weekly or biweekly basis. However, you can request a lump sum payment of certain benefits, as explained below.
This is not a full and final settlement. You are not giving up your right to medical treatment or vocational rehabilitation, and if your condition unexpectedly takes a turn for the worse, you can request additional compensation within a certain time frame.
If you’re receiving permanent disability benefits, you can ask the Indiana Workers’ Compensation Board for the benefits to be paid in a lump sum (sometimes called a “commutation”). For total disability, you must wait at least six months from the date of your disability before requesting a lump sum payment. For partial disability, there is no time restriction. The board will approve your request if it is in the best interests of all parties.
If your request is approved, your total benefits will be reduced to their present value. This is based on the premise that a dollar received today is more valuable than a dollar received at some point in the future. Indiana uses a discount rate of 3% per year.
You must wait at least seven days from your date of injury before settling your workers’ comp claim. Practically speaking, though, most workers wait until they have reached maximum medical improvement (MMI). You reach MMI when your doctor finds that your condition is not likely to improve with further treatment. Before then, it will be difficult to know how severe your injury is or how it will impact your ability to function and work. These issues will have a direct impact on how much you are entitled to through workers’ comp.
The Indiana Workers’ Compensation Board must approve all settlements. You and the insurance company will sign the appropriate forms and submit them to the board. The board will review the documents and decide whether to approve the settlement. Unlike in many other states, you typically won’t need to attend a hearing.
It’s a good idea to consult with an Indiana workers’ comp lawyer before entering a settlement agreement. A lawyer can advise you on the value of your case and whether a particular settlement offer is in your best interests. This is especially important for a Section 15 settlement, which usually requires you to give up all rights in your workers’ comp case. To learn how much an attorney might cost you, see our article about Indiana workers’ comp attorneys’ fees.