In Minnesota, not every workers’ comp case is resolved through settlement. There is no legal requirement for either the injured worker or the insurance company to agree to a settlement. However, settlement often happens when the claim involves a dispute between the injured worker and the employer. In exchange for releasing the insurance company of responsibilities under Minnesota’s workers’ comp laws, the injured worker gets a lump sum of money.
In Minnesota, your settlement will either be “to-date” or “full and final.” In either type, it’s important to know exactly what rights you are giving up in exchange for the settlement money.
A “to-date” settlement ends a dispute on a limited number of issues, but only up to the date of the settlement. It does not close out your case entirely. The settlement can end disputes on any issues, like medical care owed or benefits owed.
For example, let’s say you were injured two months ago and believe that you are owed $2,000 in worker’s comp benefits so far. However, the insurance company believes that you’re only entitled to $500. In a to-date settlement, you and the insurance company could agree that you will be paid $1,000 to resolve the dispute. However, the settlement applies only to that two-month timeframe before the settlement date.
A full and final settlement closes out your rights under Minnesota worker’s comp law, typically in exchange for a lump sum. The only benefit that might remain open in a full and final settlement is future medical care.
In some cases, the insurance company will agree to leave your right to future medical care full intact. In other cases, most commonly in disputed claims, the settlement will close out your right to future medical care completely. In still other cases, the settlement might keep open some of your medical rights. For example, the settlement contract might specifically state that you are entitled to future office visits with your orthopedic physician, but not to physical therapy.
Once the parties reach an agreement on settlement, one of the attorneys will draft a document called a “Stipulation of Settlement.” If you don’t have an attorney, the attorney for the insurance company will prepare the document. The stipulation will outline all the important terms of settlement, such as the settlement amount, the amounts that will be paid to your medical providers, attorneys’ fees that will be deducted from your settlement, and more.
All parties to the settlement must sign off on the settlement, including intervenors. An intervenor is any person or company with an interest in your settlement. For example, doctors and hospitals with unpaid balances may be intervenors in your case.
Once everyone signs off, the settlement documents will be submitted to a compensation judge at the Office of Administrative Hearings. If both sides are represented by an attorney, the settlement documents are automatically approved by the judge, unless you’re closing out your rights to future medical care or vocational rehabilitation. In those cases, the judge will need to review and approve the agreement. If you do not have an attorney, the settlement documents will also need to be reviewed and approved by the judge.
Once the settlement documents are approved, the insurance company must cut the settlement check within 14 days. If you have an attorney, the check should be sent to your attorney’s office. Your attorney will then deposit the check in the firm’s client trust fund account, deduct the attorneys’ fees and other costs, and then send the check to you. For more information about your lawyer’s cut in your worker’s comp case, read our article on attorneys' fees in Minnesota.
Under Minnesota law, once a worker’s comp settlement is approved, it can only be set aside and reopened in rare circumstances. For example, if the settlement was the result of fraud or mistake of both parties, you’ll have grounds to reopen the case. A case can also be reopened if there is newly discovered evidence or a substantial change in the employee’s medical condition. However, the court is generally opposed to reopening a case.
Because reopening a full and final settlement is nearly impossible, you should know the terms of your settlement inside and out before signing off on the agreement. A well-qualified Minnesota workers’ comp attorney can help you navigate the complexities of the law and determine which type of settlement is best for you. A lawyer can also coach you on your legal rights well before you reach settlement, starting from the day you get injured. For more information about hiring an attorney, read our article on how a worker’s compensation attorney can help you.