Settling Your Workers' Compensation Case in Washington

An overview of the settlement process in Washington workers' comp.

Workers’ comp settlements are not as common in Washington as in other states. Only older workers with accepted claims may settle, and they must obtain approval from the Department of Labor & Industries (L&I). If you qualify for settlement, you will be giving up important rights. Learn more about Washington workers’ comp settlements below.

Does Washington Allow Workers’ Comp Settlements?

In Washington, there are significant limits on workers’ comp settlements. Unlike in most states, you cannot settle your entire workers’ comp claim in exchange for a lump sum payment. Instead, only certain eligible workers can enter into a structured settlement.

In a structured settlement, you receive periodic payments over time. Typically, you will receive a larger initial payment immediately after your settlement is finalized. Then, L&I (or your self-insured employer) will make installment payments according to your settlement agreement. In Washington, you cannot receive settlement payments more frequently than every two weeks.

When you accept a structured settlement, you give up your right to most future benefit payments, including wage loss and permanent disability benefits. However, you cannot give up your right to medical treatment. And, you can reopen a settled claim if you discover a new injury or illness relating to the claim.

Who Is Eligible to Settle a Workers’ Comp Claim?

You are eligible for a Washington workers’ comp settlement only if:

  • you are at least 50 years old
  • L&I (or a self-insured employer) has accepted your claim, and
  • your claim is at least 180 days old.

A structured settlement can help you pay your bills, as you will receive a larger initial payment up front. However, there are downsides as well. If you need help deciding whether to settle, contact a Washington workers’ comp lawyer.

How Much Will I Get in a Settlement?

Washington workers’ comp law places caps on the amount of your installment payments in a structured settlement:

  • your initial payment cannot exceed 600% of the state’s average monthly wage, and
  • your periodic payments must be at least 25%, but no more than 150%, of the state’s average monthly wage.

However, the exact amount that you receive will depend on the amount of your monthly benefits and the value of the rights you are giving up. Valuing a settlement is not an easy task. If you need help calculating your claim’s value, contact a Washington workers’ comp lawyer for help. Under Washington law, your lawyer cannot charge attorneys’ fees of more than 15% of your structured settlement. (To learn more, read our article about Washington attorneys’ fees.)

How Do I Apply for a Settlement?

The settlement process varies, depending on whether your employer is self-insured or has workers’ comp insurance through L&I.

L&I Settlements

Most employers purchase workers’ comp insurance from L&I. If you are interested in settling your claim with L&I, you should file an Application for Structured Settlement (F240-002-000) and an Income and Expense Form (F240-007-000). You can submit these forms online or in writing. L&I will review your application and your reasons for requesting settlement. If it believes that settlement is appropriate in your claim, L&I will contact you to negotiate the terms of a structured settlement.

Once you come to an agreement, L&I will draft a settlement agreement. You will sign this agreement and present it to the Board of Industrial Insurance Appeals (BIIA) for final approval.

Self-Insured Settlements

Self-insured employers do not purchase workers’ comp insurance from L&I. Instead, they directly pay and manage their employees’ workers’ comp claims. (Typically, only large, financially stable companies are self-insured.) To confirm your employer’s self-insured status, you can check L&I’s self-insured employer lists.

If your employer is self-insured, you should initiate settlement negotiations directly with your employer (instead of contacting L&I). Once you and your employer agree on the terms of your structured settlement, you will sign a settlement agreement and submit it to the BIIA for approval.

Can I Change my Mind?

In Washington, you have 30 days from the time BIIA approves your settlement to change your mind. During this revocation period, you can cancel the settlement for any reason. However, once 30 days have passed, your settlement is final and you cannot reopen your settled claim.

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