The vast majority of Oregon workers’ compensation claims settle at some point. Workers settle for many reasons, including wanting to be done with the workers’ comp process, needing money to pay bills, and the risk of losing at a workers’ comp hearing. In Oregon, the process of settling your workers’ comp claim varies, depending on whether the insurance company is paying you any benefits.
In Oregon, there are two types of workers’ comp settlements: claims disposition agreements and disputed claims settlements. Typically, both types of settlement involve a lump sum payment. However, insurance companies will occasionally agree to a structured settlement, in which you receive periodic payments every month, year, or other period of time.
A settlement is different from a request to have your workers’ comp benefits, such as a permanent partial award, paid in a lump sum. If you received a lump sum award after filing an Application for Approval of Lump-sum Payment of Award (Form 1174), this is not a full and final settlement of your claim.
You may use a claims disposition agreement (CDA) to resolve a claim that the insurance company has accepted and is voluntarily paying. According to the Oregon Workers’ Compensation Division, most workers’ comp claims resolve by a CDA. A CDA cannot terminate your right to future medical treatment or to the Preferred Worker Program (a program encouraging employers to hire disabled workers). However, you will release your claims for future:
(To learn more about these benefits, read our article on Oregon workers’ comp benefits.)
If the insurance company denies your workers’ comp claim, you may resolve your dispute with a disputed claims settlement (DCS). Unlike a claims disposition agreement, you give up your right to all workers’ comp benefits in a DCS. In other words, the insurance company will not continue to pay for any benefits, including medical coverage.
The Workers’ Compensation Division must approve settlements. Typically, you will need to submit a series of documents outlining the terms and conditions of your settlement. The judge will approve your settlement unless it is unreasonable or based on an intentional misrepresentation of the facts of your claim.
If you have a workers’ comp lawyer, your lawyer will review a series of settlement documents with you. Once you understand the CDA’s terms and sign the necessary documents, your lawyer will submit it to a judge for review. If you are unrepresented, you can demand an in-person hearing.
With a CDA, there is a 30-day “cooling off” period. Once the Division receives your settlement paperwork, you have 30 days to request its cancellation. If you have a lawyer, you can waive your right to this 30-day approval period.
Most disputed claims settlements do not require a hearing. Instead, you will submit a series of documents to the Division. If you don't have a lawyer, the insurance company must notify you of your right to a lawyer or to use of Oregon’s Ombudsman Service (a government agency that gives free workers’ comp advice).
Once a judge approves your DCS, it becomes final; you cannot change your mind and reopen your case. For this reason, you should never agree to a settlement unless you are fully comfortable with its terms and conditions. You also should seriously consider hiring a workers’ comp lawyer before settling your claim. (To learn about how much this might cost, see our article on attorneys’ fees in Oregon workers’ comp cases.)
Workers’ comp settlements are not based on a set formula. Instead, lawyers and insurance companies consider a series of factors when evaluating a claim’s worth. These factors may include:
Once you and the insurance company agree on a settlement amount, certain costs might be deducted from your settlement, including attorneys’ fees, legal costs, and a sum of money to cover future medical expenses if you are eligible for Medicare. (To learn more about these deductions, read our article discussing how much of your settlement you will get to keep.)
If the insurance company accepts your claim and voluntarily pays benefits you can settle your claim at any time in Oregon. If your claim has been denied, you must first complete the first level of an appeal (a reconsideration) before settlement. (To learn more, read our article discussing Oregon workers’ comp claims.)
However, most workers wait to settle their claims until they reach maximum medical improvement or “MMI” (when your condition is stable and additional improvement isn’t expected). Before MMI, it is difficult to assess the full value of your claim and you might undervalue your benefits. For example, to know how much you are entitled to in permanent disability or vocational benefits, you need to know how serious your injury is and how it will impact your ability to work.