Nevada workers’ compensation laws place significant limits on settlements. Unlike many other states, Nevada does not allow “full and final” lump sum settlements across the board. However, lump sum settlements are allowed for certain types of benefits.
If your claim has been accepted or you have received an award from a workers’ comp judge, you can request a lump sum payout of your permanent partial disability (PPD) benefits. These benefits are paid to workers with permanent impairments but who are still able to work in some capacity. (To learn more about these and other benefits, read our article on Nevada’s workers’ comp benefits.)
Typically, PPD benefits are paid in installments until a worker reaches the age of 70. However, you are entitled to collect at least a partial lump sum payment of your PPD benefits, based on your disability rating and date of injury.
Any portion of an award paid in a lump sum will be reduced to its present value. This is based on the concept that a dollar received today is more valuable than receiving it at some point in the future. Nevada uses a 6% discount rate.
If you choose to receive your PPD benefits in a lump sum, you are agreeing to a final settlement of all factual and legal issues in your case—including any dispute over your disability rating. You are also agreeing to give up all rights in your workers' comp case, except the following:
In Nevada, some injured workers are eligible for vocational rehabilitation services, such as job retraining, schooling, or help looking for work. Some workers are also eligible for biweekly maintenance payments while they are receiving these services. Depending on a worker’s disability rating, between nine and 18 months of vocational rehab are available..
You and the insurance company can agree to a lump sum payment in exchange for you giving up your right to these vocational rehabilitation benefits. The exact amount of the lump sum payment will depend on negotiations between you and the insurance company.
However, under Nevada law, the lump sum cannot be less than 40% of the maximum vocational rehabilitation maintenance benefits you are entitled to. For example, suppose you are eligible for 12 months of vocational rehab and would receive $800 each month in maintenance benefits during that time period. The minimum lump sum payment allowed would be $3,840 ($800 x 12 months = $9,600; $9,600 x 0.4 = $3,840).
Once your vocational rehab lump sum agreement is final, you cannot reopen your claim and ask for additional vocational rehab services or benefits, even if your condition worsens.
All lump sum payment agreements must be filed with the Nevada Workers’ Compensation Section (WCS). Once you sign an election to receive a lump sum of your PPD award, you have 20 days to change your mind. Similarly, once you sign an agreement for a lump sum payment of vocational rehabilitation, you have 20 days to revoke the agreement.
Because a lump sum payment can end important rights, you should consult with a Nevada workers’ comp lawyer before agreeing to one. This is especially true if you have a dispute with the insurance company over your permanent disability rating or you will need significant job retraining. A lawyer can help you assess whether a lump sum payment is in your best interests. (To learn how much this might cost, see our article on Nevada workers’ comp attorneys’ fees.)