If the insurance company has approached you or your lawyer about potentially settling part of your workers’ compensation case, you may wonder if there are different types of Minnesota workers comp settlements. People often think that a settlement must resolve an entire case, but in Minnesota you can partially settle for only some benefits.
Do All Workers’ Comp Cases End in a Settlement?
Workers’ compensation cases reach a settlement in most cases in which there are disputes or an attorney is involved. However, sometimes this is not the case. There is no guarantee of a settlement in a MN workers’ comp case. Often, a settlement occurs at some point because the parties come to an agreement to settle in exchange for a monetary resolution. It is similar to any legal dispute process in which the parties choose to end their dispute with a compromise.
MN Workers Comp Settlements
A settlement is an agreement between you and the insurance company, or you and the employer if it is self-insured. You agree to give up your right to certain workers’ comp benefits, and in exchange the insurer/employer agrees to pay you a lump sum of money. Once you sign the written Stipulation for Settlement and get it approved by a judge, you get paid and you stop fighting for the benefits.
You do not have to settle for all your benefits claims at once. For example, you could:
- Settle your wage loss benefits claim but not the medical benefits claim
- Settle your medical benefits claim but not the wage loss benefits claim
- Settle a claim for a specific benefit, such as costs of a surgical procedure
- Settle all outstanding medical bills but retain your future medical treatment claim
There are many different ways to structure a settlement besides those listed, and all depend on your particular circumstances. The insurance company may have good reasons for wanting to settle some claims but not others. You may be very far apart on a potential settlement amount for some benefits, but in agreement for others.
Workers’ compensation settlements also may include amounts paid for interest and penalties, if the insurance company paid you late or incorrectly. Your settlement may include your right to vocational rehabilitation services. Finally, your settlement may set aside a portion for attorneys’ fees and costs. Usually your attorney receives a percentage of the benefits he or she helps you obtain.
What Do You Give up by Signing a Workers’ Comp Settlement?
It is important to understand which benefits you give up by signing a settlement. When you or your lawyer are negotiating the settlement, make sure you ask whether you will be able to receive medical treatment in the future for your injury. Future treatment could be limited to a particular type of treatment or a particular body part only. After you receive the Stipulation for Settlement, read it carefully to ensure it reflects the discussions you had and your understanding.
After you sign a Stipulation for Settlement and get it approved by the workers’ compensation judge, the settlement binds you. You cannot change it or undo it except in certain very rare cases. As a result, you should take care in agreeing to a settlement, especially if you do not have a lawyer to advise you.
Are Workers’ Compensation Settlements Taxable?
There is no requirement to pay income taxes on a workers’ compensation settlement or other weekly benefits. Since they are considered compensation for personal injury under federal tax law, they are non-taxable. Also, under Minnesota workers’ comp laws, a settlement is non-taxable.
Settlements that involved personal injury cases, including those stemming from civil lawsuits are generally not taxed since the funds are accounted as compensation for the injury sustained.
Review Any Workers’ Comp Settlement Carefully
If the insurance company offers you a settlement, consider your options carefully. An experienced MN workers’ compensation attorney can help you determine if the settlement is fair and advantageous to you in the short and long run.
Some things to consider when evaluating a workers’ compensation settlement include:
- A settlement requires a careful evaluation of your budget and future financial needs.
- A settlement is often negotiated and completed in serious injury cases that involve long term disability.
- A settlement may not provide sufficient financial help to cover ongoing expenses that you and your family may incur as a result of the injury.
It is important to keep your options open and consider all possibilities when evaluating a proposed workers’ compensation settlement.
Do you want to pursue settlement of your workers’ compensation case? Joe Osterbauer, Esq. and the Osterbauer Law Firm stand up for injured Minnesota workers’ rights. Joe’s 27 years of workers’ compensation experience and his team’s speedy service combine to get clients the results they need. To schedule a free consultation, visit Osterbauer Law Firm online or call Joe’s office at (612) 334-3434.