Can I settle my workers’ compensation claim?
Ohio Revised Code Section 4123.65 authorizes the settlement of Ohio workers’ compensation claims. So yes, the law in Ohio does permit the settlement of workers’ compensation claims.
When can I settle my workers’ compensation claim?
There is no time-frame or waiting period for filing a settlement application. However, there are numerous considerations regarding when the settlement process should be commenced. Several of these considerations are the following:
- Is the injured worker still receiving medical treatment? If so, settlement is generally not recommended. When the injured worker is medically stable and recovered, settlement might be feasible.
- Will future medical treatment and prescription drugs be required? If it is likely that future treatment will be required, the settlement value will be higher, but the future treatment will not be covered. If the injured worker wishes to settle in this circumstance, the sooner that the process is started, the more likely that the settlement amount will be higher.
- Is the claim still within the employer’s experience (meaning the payments made under the claim still affect the employer’s workers’ compensation premiums)? If so, the employer’s approval is required. In such cases, most employers will not agree to a fair settlement amount, and the injured worker must wait until the claim exits the employer’s experience (approximately five years after the date of injury). If the employer is self-insured (many very large employers are self-insured), the claim never exits their claims experience and therefore self-insured employers must approve all settlements.
- In most cases, if the injured worker wishes to settle a claim against an employer, then he/she must agree to settle all other open claims against the same employer. Therefore, if any claim against that employer is still within the employer’s claims experience, the injured worker normally must wait until all claims have exited the employer’s experience before settlement is possible. The law does not require this, but nearly all employers require it.
- If the injured worker is still employed by the employer for which the injured worker was employed on the date of injury, then the employer will normally require a resignation as a condition of settlement, even if the claim is no longer in the employer’s experience. In this situation, settlement is normally not feasible until the injured worker is no longer employed by that employer.
- A settlement application must be filed prior to the statute of limitations date. For all claims with dates of injury on or after 08/25/2006 the statutory open period is five years from the date of last payment of compensation or medical benefits under the claim. This means that if there is a five year period during which no compensation or medical bills are paid, the claim will expire. For claims with earlier dates of injury (from 12/11/1967 to 08/24/2006), the open period is six years for claims for payment of medical bills only, and ten years for claims in which compensation was paid. In nearly all situations, the closer a claim is to the statute of limitations date, the lower the settlement value will be.
What are the requirements to settle an Ohio Workers’ compensation claim?
An application for settlement must be filed with the BWC (state fund claims) or Industrial Commission (self-insured claims). This document must include the settlement agreement, be signed by the injured worker and the employer (with some exceptions), and clearly set forth the circumstances by reason of which the proposed settlement is deemed desirable and that the parties agree to the terms of the settlement. The settlement application forms (C-240 for state fund claims and SI-42 for self-insured claims) are available on the BWC’s website (www.bwc.ohio.gov).
There are three exceptions to the requirement for the employer’s signature:
- The employer is no longer doing business in Ohio;
- The claim is no longer within the employer’s claims experience and the injured worker is no longer employed by the employer; or,
- The employer failed comply with Ohio Revised Code Section 4123.35 (to maintain workers’ compensation coverage).
In state fund cases, the application will be reviewed by a team BWC settlement claims service specialists. After a thorough review and negotiation, a non-appealable order will be published by the BWC approving or denying the application. If the settlement is granted, payment cannot be made until a thirty-day “cooling-off” period has expired. During this cooling-off period, any party can withdraw consent to the settlement. When the BWC disapproves a settlement, it is usually because the parties could not agree on the amount or the employer has objected (even though outside the employer’s experience).
In self-insured cases, the settlement agreement is filed with the Industrial Commission and reviewed by a Staff Hearing Officer. An order will not be issued unless the Commission rejects the settlement on the basis that it is a gross miscarriage of justice or clearly unfair. If no order is published within the thirty-days cooling off period commencing on the date the settlement agreement is filed, it will be deemed approved and payment can be released by the self-insured employer.
Key considerations for all settlements:
- Settlement ends the claim. Nothing more will be paid.
- Settlement is voluntary. No one can force a settlement.
- Settlement is a compromise. The injured worker will not receive the full value of the claim.
- Settlement value is what the BWC (or self-insured employer) is willing to approve and not the full value of your claim.
- Settlement value is higher with medically active claims and lower in inactive claims.
- There is no “pain and suffering” in the settlement of a workers’ compensation claim.
- Settlement value normally decreases with time.
- The settlement process may take anywhere from two months to one year – normally it is a three to six month process.
- If the injured worker will be eligible for Medicare within thirty months, the settlement process will take longer. In such a case, Medicare is not responsible to pay for medical treatment that would have been covered by the claim. If the injured worker is eligible for Medicare currently or will be eligible within thirty months, or if the injured worker is receiving Social Security Disability, the injured worker should not settle his/her claim without the advice of a qualified workers’ compensation attorney. This is an extremely complex area and fraught with numerous legal pitfalls. Much caution is therefore essential in the settlement of these claims.
- Even when employer’s signature is not required, the employer can still block the settlement.
- A legal representative should never settle a claim without the injured worker’s prior approval.
- When a settlement is approved and an order published, there is a mandatory thirty-day cooling off period during which you may withdraw from the settlement. Payment cannot be made until the expiration of this cooling off period. This mandatory waiting period is for your protection and cannot be waived.
- If the injured worker has an attorney there will normally be a one-third contingent fee on the gross amount of the settlement. This is the customary fee and generally considered to be reasonable in most situations. This fee may be higher if the claim is settled during a court appeal process.
Should the injured worker consult an attorney prior to settling a workers’ compensation claim?
The answer is absolutely YES. If an injured worker is unrepresented and the employer makes a settlement offer, the amount of the offer will probably be unfair. In my nearly forty years of representing injured workers, I have never seen a fair settlement paid to an unrepresented injured worker in any claim involving a significant injury. Nearly all workers’ compensation attorneys will offer a free office consultation to a new client. If the settlement offer is fair, the lawyer will let the client know. In minor claims, it might make sense to accept the offer. However, in claims involving serious injuries, lost time from work, and permanent impairment, the injured worker should definitely retain legal counsel. At a minimum, the injured worker should take advantage of a free consultation with an attorney before signing a settlement agreement.