At some point during their workers’ compensation cases, most injured workers consider settlement. Depending on the amount offered, a settlement might be in your best interests if you need immediate cash to pay your bills or if there’s a chance you’ll lose at a workers’ comp hearing. However, a settlement also means giving up important rights. Before you submit a settlement petition to the Virginia Workers’ Compensation Commission, make sure you understand the terms of the agreement.
In Virginia, most workers’ comp settlements are full and final. This means you give up the right to all medical care and future workers’ comp benefits related to your injury, in exchange for a lump sum. Once a full and final settlement is finalized, you cannot reopen the claim and ask for more money. This is true even if your condition worsens unexpectedly.
On occasion, the insurance company will agree to a more limited settlement. For example, you might give up your right to disability benefits, but continue to receive medical treatment. However, these limited settlements are relatively rare.
Most workers receive a lump sum settlement. However, insurance companies occasionally agree to structured settlements, especially for workers with catastrophic injuries and require long-term care. In a structured settlement, you receive periodic payments (typically paid every month or year).
You can settle your workers’ comp claim at any time. However, it can be difficult to properly value your claim while you are still healing. That’s why most workers wait to settle their claims until they reach maximum medical improvement: when your doctor finds that your condition is stable and will no longer improve with treatment. If you settle before that point, you might miss out on valuable benefits, such as the cost of an expensive surgery.
Typically, you and the insurance company will negotiate back and forth before arriving at a final settlement amount. (Insurance companies rarely offer a fair settlement value right away.) However, before you start negotiations, you should understand the value of your workers’ comp claim—otherwise, you might accept far less than you’re entitled to.
To understand your workers’ comp claim’s settlement value, you should calculate the total lifetime value of your benefits. (To learn more about these benefits, read our article on how much you can get in Virginia workers’ comp.) Then, consider the potential problems with your claim—such as conflicting medical evidence regarding your permanent disability. While this can give you a general idea of what a fair settlement might be, you should consult with a lawyer before agreeing to an offer. Settlement values are difficult to properly evaluate, and lawyers have years of experience evaluating how much a claim is worth.
While you generally won’t have to pay taxes on your workers’ comp settlement, certain expenses might be deducted from your check, including:
To learn more about these deductions, read our article discussing how much of your workers’ comp settlement you will get to keep.
The Virginia Workers’ Compensation Commission must approve all workers’ comp settlements. Once you and the insurance company agree on the terms of a settlement, you will complete a series of documents, including:
If you don’t have a lawyer, you must provide the commission with additional information concerning your income, education, and medical treatment.
Typically, the commission does not hold a settlement hearing. Instead, it will review your documents and decide whether the settlement is in your best interest. In practice, the commission approves most settlements, especially when the worker is represented by a lawyer.
Settlements are always voluntary, meaning that the insurance company cannot make you accept a settlement in the first place. However, once the commission approves your settlement, it is very difficult to cancel the agreement. In Virginia, you have a 30-day appeal period during which you can ask the commission to cancel your settlement. However, unless you can show that there was fraud or that both you and the insurance company were acting on mistaken information, the commission will uphold your settlement. Because this is a difficult standard to meet, most settlements are upheld.
For this reason, you should never agree to a settlement unless you are completely comfortable with its terms and conditions. And, if you are unrepresented, you should seriously consider speaking with a Virginia workers’ comp lawyer before you settle. A lawyer will guide you through the settlement process and ensure that it is in your best interests.