Determining when to settle a worker’s compensation claim, and for how much, is not always a simple task. Getting injured on the job is upsetting, and you may feel overwhelmed with all the information about the worker’s compensation system. However, it’s important to understand how settlements work, as they typically involve giving up significant rights.
A worker’s compensation settlement is a voluntary agreement between an employee and employer, or its insurance company, to close out a worker’s compensation case in exchange for a sum of money. Settlements in Montana are usually “full and final,” which means you give up your right all worker’s compensation benefits, including future medical care. The settlement funds are all you will ever receive for your injury, and you can’t reopen your case even if your condition gets worse after settlement. However, in certain cases, the insurance company might agree to a more limited settlement—for example, leaving your right to medical care open or allowing you to reopen your case if your condition worsens.
Generally, settlements in Montana are paid in a lump sum. However, Montana law limits lump sum payments for certain types of benefits in accepted claims. For example, permanent and total disability benefits will generally not be paid in a lump sum, unless the worker can show a specific financial need.
Most settlements in Montana are based on the extent of your permanent impairment from your work injury. A physician will determine the extent of your impairment after you reach maximum medical improvement (MMI)—when your condition is as good as it’s going to get. After you receive your impairment rating from a physician, your case is ripe for settlement. Until then, it will be extremely difficult to know how much you should ask for in a settlement.
The vast majority of cases settle without proceeding to a worker’s compensation hearing. Either you or the insurance company can initiate informal negotiations over the phone or through correspondence. If you can’t reach an agreement on your own, you can request mediation: an informal conference where a neutral third party will try to help you and the insurance company resolve the dispute. In Montana, mediation is required before you can request a hearing with the Workers’ Compensation Court.
Mediations are conducted by phone, and each party will be asked to present their arguments. The mediator will make a written recommendation, which is not binding on either party. If either party does not agree with the mediator’s recommendation, they can appeal the decision to the Montana Worker’s Compensation Court.
All settlements must be approved by the Montana Department of Worker’s Compensation. A workers’ comp judge will review your settlement documents and decide whether to approve it. If you don’t receive a decision within 14 days, your settlement is considered approved. Once your settlement is approved, the insurance company has 30 days to cut the settlement check. The insurance company can be liable for penalties if the settlement check is not sent in that timeframe.
If you have an attorney, the settlement check will be sent to his or her office. Your attorney will deduct attorneys’ fees and costs and other relevant items and send the remainder of the funds to you. (For more information on how much a lawyer will cost you, read our article on how much a worker’s comp attorney in Montana costs.)
The value of your claim depends on many factors, such as the nature and extent of your injuries, your ability to return to work and in what capacity, and your wages prior to the injury. You can get a general idea of how much you might be entitled to in benefits by reading our article on our article on workers’ compensation benefits in Montana. However, for advice on whether a particular settlement offer is a fair one, you should consult with a workers’ comp lawyer.
Settlement contracts are written in legal complex legal terms that are often confusing. Your settlement contract may need to include specific language about Medicare eligibility, social security income, and payment of outstanding medical bills. The contract will also include specific language about what rights you are agreeing to give up.
A good attorney will review your contract line by line, and make sure you understand what you’re signing off on. To learn what qualities you should be looking for in a lawyer, read our article on finding a great worker’s compensation attorney.