What is a Lump Sum in Workers’ Compensation Cases?
A lump sum is a contract between you, your employer, and your employer’s workers’ compensation insurer. This is a one time payment that is meant to replace your weekly compensation checks. In some cases, this one time payment can also replace other workers’ compensation benefits. Ultimately, the judge that listens to your case will decide whether or not a lump sum payment for your claim is the best option.
Should I Lump Sum My Case?
There are pros and cons of a lump sum payment, as opposed to receiving regular benefits. Each case is different, but it is important to note that accepting a lump sum payment means that you give up your rights to any future weekly benefits. If the insurance company has agreed that they are responsible for payments, or a judge has ordered the insurer to pay benefits, the insurer must pay your causally connected future medical benefits and vocational rehabilitation. However, insurance companies have the right to dispute future medical bills before and after your lump sum payment.
If you are deciding whether or not to lump sum your case, consider these question:
* Do you have unresolved medical problems resulting from your injury or illness?
* Are you able to return to work?
* How will this settlement affect future medical bills related to your injury or illness?
* What is your income?
* What are your expenses?
* Will this settlement affect your retirement/pension rights if you don’t return to work?
* Do you have a third party claim as a part of your workers’ compensation claim? If yes, it is important to speak to a workers’ compensation attorney to guide you and inform you on how this claim can affect your lump sum settlement
If I Sign a Lump Sum Agreement, Does That Mean That I am Also Terminated From My Job?
Your employer cannot tell you that signing a lump sum agreement will cause the termination of your employment. Signing a lump sum agreement cannot prevent the following:
* Keeping your employment with the employer at whose job you were injured
* Obtaining employment with another employer
* Receiving benefits that your employer owes you
* Submitting any future workers’ compensation claims for additional work-related injuries or contracted illnesses
* Bringing any future claims of breach of contract or wrongful discharge.
An employee that accepts a lump sum is presumed incapable of returning to work for one month for every $1,500 included in the lump sum. Under M.G.L.c. 152, the employee has no re-employment rights during this presumption period. Employees that do not return to their previous employer can return to the workforce immediately. An employer, insurer, or an attorney that tries to persuade you to sign a release that states something to the contrary can be subject to a $10,000 fine. Any release that includes this information will be null and void.
Does My Employer Need to Approve My Lump Sum?
For most cases, your employer does need to approve a lump sum proposal. If your employer does have approval authority, the lump sum proposal cannot proceed without their approval. Even if your employer does not approve the lump sum proposal, you will continue to receive your weekly workers’ compensation benefits.
Does Vocational Rehabilitation services affect my Lump Sum?
If you are currently receiving Vocational Rehabilitation services, your lump sum can only be approved when one of the following requirements are satisfied:
* You have returned to work for 6 months or more
* You have completed the approved vocational rehabilitation program
* You have received the written consent from the Office of Education and Vocational Rehabilitation (OEVR)
* A judge overrides any of these requirements after appropriate notice and hearing. You need to enter the rehabilitation program within 104 weeks from the day your lump sum was approved. If you do not enter a rehabilitation program within that time, you forfeit your rights to enter the program.
Does a Lump Sum Close My Case?
Yes: a lump sum settlement will replace all future compensation payments for that specific injury or illness.
Does a Lump Sum Settlement Affect Any Other Claims I Have?
A lump sum does not affect any other claim, action, or proceeding on any other separate and distinct injury or illness. The lump sum does not affect other claims, whether or not the injury or illness precedes or arises after your settlement date, and regardless of who the employer or insurer are.