Types of Settlements in Minnesota Workers’ Compensation Claims

Each day I take a few minutes to review the statistics for my blog to find out how many people are visiting and what type of search terms they are using to find us.  The overwhelming number of searches that bring people here involve questions regarding settlements.  I have previously written posts entitled:

When Do You Get a Work Comp Settlement in Minnesota, and

How Much Can I Receive for Minnesota Work Comp Settlement

Based upon what I have seen readers searching for, this seemed like a good time to write another post discussing the types of settlements you might receive in a Minnesota work comp claim.  I won’t go into details from the other posts regarding the timing of a settlement and how claims are valued for settlement purposes.  In this post, I will discuss the most common types of settlements that I have seen in my practice, handling work comp claims in northern Minnesota over the past 29 years.

To- Date  Settlement

A "to-date" settlement is just what it suggests.  It represents a settlement of disputed claims only through the date of the settlement agreement.  The dispute might involve medical issues, wage loss benefits, vocational rehabilitation issues or any combination of work comp benefits.  The claims might be disputed because the insurance company has denied primary liability or the dispute might revolve around differing opinions between treating physicians or the insurance company doctor. There are always plenty of things for an insurance company to fight about.

Regardless of the dispute, the parties agree to settle the claim only through the date that the agreement is reached.  The settlement may involve payment of some amount of disputed wage loss benefits or it might simply be an agreement to provide medical care or approve surgery.  A Stipulation for Settlement will be prepared, signed by the parties and submitted to a compensation judge for approval.  Once approved, the disputed issues are settled but no future claims are compromised, limited or surrendered.

In my experience, these types of settlements don’t occur all that often, primarily because the insurance company usually wants to close all claims completely when they make a settlement.  However, under certain circumstances a to-date settlement might be in everyone’s best interest.

Full, Final and Complete  Settlement with Future Medical Claims Left Open

This is probably the most common type of settlement.  Again, the dispute between you and the insurance company might involve one or many issues.  Perhaps the insurance company is attempting to discontinue your wage loss benefits, has denied your claim for vocational retraining or simply wants to pay you a lump sum to close your file and be done with you.  In its most common form, this type of settlement means that, for an agreed-upon lump sum payment, you have closed out, or given up, all future claims for any type of work comp benefits relating to your injury, except medical coverage or treatment.  If you can agree with the insurance company on a dollar amount and the appropriate terms, a Stipulation for Settlement is prepared, signed and submitted to a judge for approval.  The judge can refuse to approve the settlement for a number of reasons, although such refusal is extremely rare, particularly where both parties are represented by experienced attorneys.

It is also important to note that when we say you are closing out all claims, we are only speaking about claims related to the specific work injury you are presently claiming.  You cannot close out future claims related to injuries you haven’t had yet or don’t know about.

Full, Final and Complete  Settlement with Some Future Medical Claims Left Open, Some Closed

In this type of settlement, you would settle your claim on a lump sum basis and only limited future medical coverage would remain open with respect to the claimed injury.  Under the terms of this type of settlement, the parties will negotiate a closeout of certain, specific, future medical coverages.  A common example would be the insurance company’s request for a closeout of future acupuncture or acupressure expenses, health club memberships, massage therapy or other types of passive treatment.  The insurance company does not want to end up paying for this type of treatment after a settlement or, worse, fighting over this treatment with you and your lawyer and having to pay for the treatment and your lawyer's attorney fees.

You would still be covered by the work comp insurance company for all other future medical treatment, such as doctor appointments, physical therapy, surgery, injections, MRIs, etc.  Basically, anything that is not specifically closed out remains available to you, subject to the work comp laws.  The insurance company can still challenge future medical bills and make you prove that the treatment is reasonable, necessary and related to your work injury.  Leaving future medical coverage “open” doesn’t  necessarily mean the insurance company has to pay every medical bill you ever submit for the rest of your life without challenge.

Some other common future medical benefits which are sometimes closed out are chiropractic expenses, pain clinic programs, psychological or psychiatric coverage.  All of these types of treatment or therapy are ordinarily covered under the work comp law and would be theoretically available to you after a settlement if you don't specifically agree to close them out.  The insurance company cannot force you to close these future claims out, but often makes this a term of the settlement they are proposing.  In other words, they won’t pay the settlement money unless you agree to these terms.  Whether or not to close out any future medical benefits as part of a settlement is a decision you and your lawyer will have to make based upon all of the facts and circumstances of your particular claim and medical condition.

Full, Final and Complete  Settlement with All Future Medical Claims Closed

This is a rare type of settlement and most often occurs where the insurance company has denied the entire claim right from the beginning.  In other words, the insurance company has denied “primary liability”, and has raised one of many possible defenses to the claim.  They may be claiming that the injury is not covered by work comp, didn’t  happen on the job, is a pre-existing condition or was caused by your intoxication or horseplay.  For whatever reason, the insurer will not accept the claim or pay any benefits voluntarily.  Depending upon the medical or other evidence, the insurance company may still be willing to pay a settlement in order to avoid the risk of trial.  You may be willing to do the same.

Under those circumstances, an agreement might be reached for a lump sum payment which closes out all work comp claims relating to the injury, including future medical.  Like any other settlement, it must be approved by a compensation judge.  However, where there is a denial of primary liability and a possibility that you could end up with nothing if the case went to a trial, a compensation judge is generally going to approve such a settlement.

Structured  Settlements

While not very common, sometimes an insurance company will offer a structured settlement instead of a single lump sum. This more often occurs where the injured worker is a younger person and has a potentially large claim into the future.  The terms  would be the same as one of the settlements listed above, but instead of a single lump sum, the payment might be in the form of a structured settlement or an annuity, paid out over time in regular installments.

Summary

Every case is different and these are just the most common types of work comp settlements that I have negotiated over the years.  There are other, less common types of settlements, which might be negotiated depending on the circumstances of a particular case.  If you have a work injury claim and the insurance company wants to make a settlement, please take the time to contact an experienced attorney before you make a settlement. The insurance company hires attorneys and claims adjusters to protect their interests.  Why wouldn’t you do the same?