Throughout your workers’ compensation case, you will probably have one or more opportunities to settle your claim. Workers settle their workers’ compensation claims for a variety of reasons.
Sometimes, an injury has stabilized, and the worker no longer wants to deal with the insurance company. Other times, the worker decides that taking a disputed case to trial is too risky and accepts a lump sum instead. (For more information, see our article about the risks and benefits of settlement.)
Accepting a settlement offer in your New York workers’ compensation case is a big decision. Before signing a settlement agreement, you should consider what you will be getting and what you will be giving up.
When Should I Settle My New York Workers’ Compensation Claim?
Unlike some states, you may be able to settle your New York workers’ comp claim before you are fully healed from your injury. In New York, like in all other states, settlements are voluntary. No one can force you, or the insurance company, to settle; both parties must agree to the terms of the settlement.
However, as a practical matter, most workers wait to settle until their medical conditions are stable and not expected to improve any further. This is called maximum medical improvement (MMI). It is risky to settle before MMI because it might not be clear whether you will need additional medical treatment or whether your condition will be permanent. Without knowing the full extent of your injuries, it can be very difficult to accurately value your claim.
Types of Workers’ Compensation Settlements in New York
You can settle your New York workers’ comp claim through either through a stipulation or a Section 32 settlement. Both types of settlement must be submitted to the Workers’ Compensation Board for approval.
Stipulation Agreements
In a stipulation agreement, you and the insurance company have agreed to certain facts and findings. For example, you and insurance company may agree that you have a scheduled loss of use. If the Board approves your stipulation agreement, the insurance company will pay the agreed upon benefits. Stipulation agreements can be changed with Board approval.
Section 32 Settlements
A Section 32 settlement involves a full and final settlement of your workers’ compensation claim. Most Section 32 settlements require you to release all claims against your employer arising out of your work injury—including the right to any additional medical treatment, wage loss benefits, and vocational rehabilitation services.
Occasionally, a Section 32 settlement will be more limited. For example, a limited settlement might end your wage loss and vocational rehabilitation claims, but allow you to continue receiving medical benefits in the future. However, these limited settlements are rare. Most insurance companies are not willing to leave claims partially open; they would much rather close a workers’ compensation claim and end their obligation to pay benefits.
Most settlements are paid in a lump sum. However, some Section 32 settlements are paid over time (called structured settlements).
Typically, structured settlements are used in catastrophic claims or when a worker needs long-term care. They give a worker steady income through scheduled payments (weekly, monthly or annually). Many structured settlements also include an up-front payment to help with medical bills and other expenses. (For more information, see our general article about workers’ compensation settlements.)
How Much Is My Workers' Comp Claim Worth in New York?
Every workers’ compensation claim is different, and there is no simple formula for valuing a claim. Due to the complexity of New York workers’ compensation law, most workers hire lawyers to help them evaluate settlement offers and negotiate with the insurance company.
When evaluating a settlement offer, you should consider several factors, including:
- how much you might be owed in permanent disability benefits
- the potential cost of your future medical bills
- any temporary disability payments that the insurance company failed to pay
- any unpaid medical bills to date, and
- any penalties that the insurance company owes you for failing to pay your benefits on time.
(For more on how to value your claim, see How Much Can I Get for My Workers’ Compensation Case in New York?)
You should also consider the weaknesses in your claim if it is being disputed. When you take a case to trial, there is always a chance that you will lose. If there is a major dispute about whether you’re entitled to benefits, and it is unlikely that you will win your case at trial, you may want to compromise and accept a lower lump sum settlement instead.
Who Starts Workers' Comp Settlement Negotiations?
Because you are the one with the claim, you (or your attorney) will typically start the process by giving the insurance company a settlement demand. The insurance company will respond to your demand by accepting it, rejecting it, or making a new offer in response. This negotiation process can continue until you agree on a settlement amount.
Conciliation is another opportunity to try to settle your case. Conciliation is an informal conference where you and the insurance company will present your sides of the dispute to a senior Board attorney (called a conciliator). The conciliator will guide you through negotiations and try to help you reach an agreement.
Getting a Workers' Comp Settlement Approved in New York
Once you and the insurance company have agreed to a settlement, the Workers’ Compensation Board must approve it. If your case is being settled by a stipulation, you will present the Board with either a written agreement (Form C-300.5) or testify to the stipulation’s terms before a judge.
If you have agreed to a Section 32 settlement, the process is more involved. First, you will submit a written settlement agreement and a Form C-32 to the Board. These documents and forms set out the terms of your settlement and how your settlement money will be distributed.
Attorneys’ fees, unpaid medical bills, and unpaid child support payments may be subtracted from your settlement, for example.
Additionally, if you are a Medicaid or Medicare recipient, you may have to set aside a portion of your settlement money to pay for future medical treatment related to your work injury. (For more information, see What Will Be Taken Out of My Workers’ Compensation Award or Settlement?)
The Board will then do a preliminary review of your settlement. If the terms of the settlement seem acceptable, a hearing will be scheduled. At the settlement hearing, the judge must decide whether you understand the terms of your settlement and whether it is fair and reasonable.
After the settlement hearing, there is a ten-day waiting period. Once the waiting period ends, the workers’ compensation judge will issue a written approval letter. Your Section 32 settlement becomes full and final once the approval letter (or “final decision”) is signed. You should receive your settlement money roughly ten days after the approval letter is issued.
What Happens If I Change My Mind About Settlement?
A stipulation can always be modified with Board approval. You must have evidence that supports modification, such as medical records that show your condition has changed.
You can cancel a Section 32 settlement at any time before approval by the Workers’ Comp Board, even if the settlement paperwork has already been filed. However, once a Section 32 settlement hearing has been held, you only have ten days to cancel the settlement. During this ten-day waiting period, either you or the insurance company may request disapproval of the settlement in writing.
Once your settlement is approved by the judge, it is final and you cannot change your mind. Do not sign settlement paperwork if you have concerns about the terms of the settlement. You should also consult with a lawyer before signing the settlement paperwork.
Getting Legal Help with a New York Workers' Comp Settlement
Workers’ comp settlements require a great deal of legal knowledge and skill—you must be able to give your claim a monetary value, negotiate with the insurance company, complete settlement forms, and comply with other state and federal laws. While you are not required to hire a workers’ comp lawyer to settle your claim, it’s probably in your best interest to do so.
As noted above, a settlement usually means that you’re agreeing to give up all rights to collect additional workers’ compensation benefits related to your injury. At the very least, you should have a workers’ comp lawyer review any settlement agreement that you are thinking of signing.