Workers’ Compensation Lump Sum Payments

When you get Workers’ Comp benefits, the payments typically come in the form of a check every week or every other week.  These payments typically cover just a part of your Workers’ Comp coverage, with other payments made directly to healthcare providers.  However, a lump sum payment or settlement can change all of that.

When you receive a lump sum settlement for Workers’ Compensation, you get all of the benefits that you would have received over time paid all at once.  This can be incredibly helpful when it comes to wage-loss benefits, but it is much trickier to manage when it comes to healthcare costs.  Keep in mind that any settlement you take needs to be calculated to have enough to cover everything you would have received over time, and that accepting a lump sum payment comes with plenty of risks you should discuss with a lawyer first.

Call our Certified Pittsburgh Workers’ Compensation lawyers at Cardamone Law today for a free case assessment by calling (267) 651-7945.

Lump Sum vs. Weekly/Bi-Weekly Benefits for Workers’ Comp

If you were hurt at work and file a Workers’ Compensation claim, you will usually receive a few different areas of benefits, with the payments coming through to you in different ways.  Some are paid directly to you on a weekly/bi-weekly basis, while other benefits – like healthcare costs – might be billed directly between the hospital and the insurance carrier.  When you get a lump sum settlement, you should work with our Bucks County Workers’ Compensation attorneys to ensure it has enough money in it to cover everything it needs to.

Benefits You Receive

Workers’ Compensation usually has three main areas of benefits for injured workers: wage-loss benefits, medical benefits, and specific loss benefits.

Wage-Loss Benefits

Wage-loss benefits are paid to cover a portion of your lost wages, typically 2/3.  If you cannot work at all, this will be 2/3 of your average weekly wage; if you can still work to some extent, then this will be 2/3 of the difference between your pre-injury and post-injury earnings.  If you have income under certain thresholds, this amount will often be more than 2/3.  There is also a maximum cap on these weekly benefits, too.

Wage-loss benefits are usually paid in the form of a weekly or bi-weekly check directly to you, sticking closely to your normal pay schedule.

Medical Benefits

Medical benefits cover medical care costs, including doctor’s visits, medication, surgery costs, and more.  These benefits are paid in whatever amount is needed to cover the care, which can often be quite expensive.

Usually, these payments do not go directly to you but rather directly to the doctor, hospital, or other care provider that treated you.  These providers can often bill your employer’s Workers’ Comp directly, which means that you might not have a good idea of the actual amount of these benefits unless you keep an eye on the bills and payments yourself.

Specific Loss Benefits

Lastly, workers with permanent injuries that include lost function or loss of a body part can receive “specific loss” benefits.  These assign a value to each injury listed in the Workers’ Comp Act, listed as a number of weeks’ worth of benefits. Specific loss benefits can also be awarded for the permanent loss of hearing or vision or for serious, permanent, unsightly disfigurement (e.g., burns or scarring) of the head, face, or neck.

These specific loss awards are often paid separately from the weekly check or the medical benefits, but how and when you receive these payments might be a bit complex, depending on the circumstances of your case.

How Lump Sums Work

When you receive a lump-sum payment for your benefits, the insurance carrier takes all of the money you would have received over time for the benefits listed above and pays it to you all at once.  There might be some additional math involved to account for inflation over time and some technicalities like that, but the main point is that you get everything now in one payment.

What this means, from your point of view, is that you have the cash now but that you take on the responsibility of rationing out that money to cover the rest of your medical services and your lost wages.

Is a Lump Sum Payment Good for Pennsylvania Workers’ Compensation Benefits?

Whether a lump sum is good or not is going to be a very case-specific question.  Some people are better off with a lump sum while others are not, but there are some factors you can take into account to check what’s best in your case:

Future Medical Care

If you have already received a lot of the medical care you need to get, then you can often safely accept a lump sum.  In this kind of situation, there won’t be more payments for medical care, and you can just calculate the rest of the weekly benefits and get a lump sum to cover that.

Problems arise if you still have medical care left to receive or if your condition might get worse.  This makes it harder to predict what your medical care will cost going forward, and you might not get enough in your settlement.  If your ongoing care has set needs, like a doctor’s appointment every 6 months, that can be easier to calculate.  Compare this with something like cancer; cancer may or may not come back, and we don’t know today what care you will need if it does return years later.

Your Condition is Ongoing

If you are going to have a disability that you are going to face for the rest of your life, getting a settlement might be easier on you in the future.  If the settlement is final and the insurance carrier is done with your case, they will have no need to challenge you every few years to see if you are still disabled, versus an insurance carrier who has been making weekly payments to you for years might take steps to try to cut off or end your benefits early.  Again, if you might need surprise surgeries or your condition might worsen over time, a lump sum might not be ideal.

Other Benefits

If you receive other benefits that take into account your current savings or your ongoing income, you might want to consider avoiding a lump sum.  For example, SSI benefits and Medicaid are need-based, meaning that if you suddenly get a large amount of money, you might have “too much” income and suddenly lose those benefits.

Can You Settle a Workers’ Comp Case for a Lump Sum?

Call an experienced workers’ comp lawyer like myself to handle this. You will net more money with an experienced workers’ compensation lawyer handling the negotiations- even accounting for the 20% fee.

Most insurers will want to talk settlement. Do not do this by yourself- they will take advantage of you and offer you less than fair value 90% of the time.

Remember: there are two aspects of your case- wage loss and medical benefits. Both issues need careful consideration.

Call Our Pennsylvania Workers’ Compensation Specialists Today

If you need help negotiating a settlement and understanding what your Workers’ Comp benefits should be worth, contact Cardamone Law’s Philadelphia Workers’ Compensation attorneys today at (267) 651-7945.