Everything You Need to Know About a Vermont Workers’ Compensation Settlement

Every workers’ compensation claim is different, but many injured workers reach a similar point when an insurance adjuster calls with an offer for a permanent partial disability settlement or a full and final settlement of the claim.

At that point, people will often reach out to us with questions like these:

• Why is the insurance company offering to settle my workers’ compensation claim?
• Should I accept a workers’ compensation settlement?
• How do I know if a workers’ compensation settlement is fair to me?

In this post, our Vermont workers’ compensation lawyers answer five questions to help you decide how and when to settle your claim.

The bottom line is this: never sign a settlement agreement until you know if it’s in your best interests. Always talk to a lawyer before signing. A settlement is final. This means that once it is signed, you cannot change the terms later, an3 you cannot necessarily undo it if something is wrong. A settlement can affect other benefits you may be entitled to, and you could lose other benefits without knowing it.

What Kind of Workers’ Compensation Settlement Is Being Offered?

If the insurance adjuster is offering to settle, it’s important to understand what kind of settlement they are talking about. In a workers’ compensation claim, there are usually two kinds to consider: a permanency settlement or a full and final settlement of your claim.

Permanency Settlement

If the adjuster sends you a Form 22, they are offering a permanent partial disability (PPD) settlement. This is what people generally mean when they say they got a workers’ compensation “settlement.” It is usually offered if you have recovered from your injury but are left with a partial disability, such as a limp, loss of range of motion, or lingering pain. Sometimes you have lingering pain, but you do not have a high permanent impairment rating.

In a PPD settlement, the insurance company offers to pay you money to compensate you for lost wages over your lifetime. They decide how much money to pay by using a formula based on your injury type and an impairment rating given by a doctor. It is impossible for you to know if the rating the insurer gets for you is correct, since the doctor hired to do the impairment rating works for the insurance company. The adjuster may not tell you that you have a right to get another opinion from a doctor that you choose.

If you are offered a PPD settlement, it’s important to know:

• A PPD settlement does not close your workers’ compensation claim. Your claim remains open, and you are still entitled to get medical benefits. The insurance company must continue to pay for future medical treatment related to your injury.
• In Vermont, you can choose a second doctor to do a medical evaluation for your impairment rating. The Department of Labor’s website has a list of doctors who do these evaluations, but the list does not tell you which doctors are good for the insurer and which are good for the injured worker. Alternatively, BFS can help you choose a good doctor who will be accurate and generous in the rating they give you.
• If the insurance company does not agree with the rating you are given, they can send you to a doctor they choose. In this case, the insurer must pay for both examinations. It is very important to get a fair and accurate permanency evaluation since an incorrect one can cost you thousands of dollars in permanency benefits.
• Before signing an agreement, you should put in language to pro-rate your benefits. Otherwise, if you later collect Social Security disability benefits, this settlement could cause you to lose those disability benefits. We know how to work around this, but if you sign an agreement without the special language, you typically cannot go back and fix it later.

Full and Final Settlement

If the insurance adjuster offers “full and final” settlement, they mean to permanently close your entire workers’ compensation claim and pay you a one-time settlement amount. As part of the agreement, you usually must give up your right to future benefits. This includes medical coverage, which otherwise continues for your lifetime if you don’t settle.

If you are offered full and final settlement, it’s important to know:

• If you give up medical benefits, you will not be covered if your injury gets worse over time or if you need ongoing medical treatment or prescription medications. For this reason, we recommend that you talk to a lawyer before signing a full and final settlement.
  
• The insurance company’s offer may sound generous until you compare it to the cost of future treatment over a lifetime. BFS can help you estimate the value of what you are being asked to give up and negotiate a fair outcome that covers your future medical costs. We can also talk to you about other ways to pay for future care.

When Will I Be Offered a Settlement Agreement?

Insurance companies can offer to settle at any time. PPD settlements can be offered when an injured worker has a permanent disability and has recovered as much as they are able to. In insurance terms, they have “reached medical end.” Full and final settlements may be offered to workers with injuries that are catastrophic or claims that last many years. Sometimes a settlement offer can arrive when you haven’t been paid any benefits for years. Not everyone is offered a settlement.

How Do I Know If a Settlement is Fair?

A good way to find out if a settlement is fair is to have it reviewed by a lawyer who understands the Vermont workers’ compensation system. An experienced workers’ compensation lawyer will be able to tell you whether the agreement is fair to you or whether it favors the insurance company.

It’s in the insurance company’s interests to offer you just enough money to make it hard to turn down. We can tell you over the phone if the settlement amount is in the right range, based on your injuries and the medical treatment you’ve had. We do not charge for this service. Many attorneys, including BFS, offer free consultations with no obligation to sign up as a client.

The Vermont Department of Labor must review your settlement agreement to be sure it is in your best interests, but they do not represent you and they will not tell you that something is not a good deal for you. And, after they approve it, it becomes final and can’t be undone except in extremely rare situations. Get someone to help you review your options before you settle.

When Will my Settlement Money Arrive?

Once you settle your case and the Department of Labor approves it, your check should arrive within a week or two. Money received from a workers’ compensation settlement is not taxable (you can read more about workers’ compensation and taxes in our blog, "Are My Vermont Workers’ Compensation Benefits Taxed?".

Should I Sign a Settlement Agreement?

Whether a settlement agreement is right for you depends on your unique injury and situation. Our attorneys are familiar with what things to look out for and what your rights are, so that you can make a good decision about what is right for you. It’s important to read a workers’ compensation settlement offer carefully and take steps to make sure your interests are taken care of now and in the future.

Biggam Fox Skinner is here to help you do that. Talk to our workers’ compensation lawyers for free by calling 802-229-5146 today or filling out a contact form on our website.