Learn about the various types of workers’ compensation settlements in California and what you should think about before cashing out.
If your employer’s insurance company denies your workers’ compensation claim or does not approve all of the benefits you believe you are entitled to, you have the right to appeal that decision by filing a “application for adjudication of claim” (for more information, see how to file a California workers’ comp claim).
However, only a tiny percentage of disagreements get up in front of a workers’ compensation court. The majority of the time, insurance companies and wounded personnel settle their differences.
You’ll most likely have multiple chances to bargain with your employer—or, more likely, its insurance company—during the course of your case.
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Should I settle my California workers’ compensation case?
Accepting a settlement offer depends on a variety of considerations, including the amount of money given, the severity of your injuries and the ensuing lasting limits, the validity of your medical proof, your financial status, and your desire to wait it out further.
On the one hand, if the offer is good enough and you need the money right now, it may be worth taking a smaller sum to avoid the aggravation and expense involved in a workers’ compensation hearing.
On the other hand, if the insurance company claims that you’re less incapacitated than you believe, and you have credible medical proof to back up your claim, it may be worth your time to attempt to persuade a workers’ compensation court to give you additional payments.
You should at least wait until your medical condition has settled before contemplating a settlement offer (a stage called “maximum medical improvement” or “permanent and stationary”).
You won’t know how much your case is worth until then. Once your doctor determines that you will not recover any further, even with further treatment, the doctor will determine whether and to what degree your accident has produced permanent restrictions, resulting in a permanent disability award.
See our article on obtaining workers’ compensation permanent disability payments in California for additional information on how this procedure works.
Workers’ Compensation Settlements in California
There are two methods to resolve your workers’ compensation lawsuit in California: a “compromise and release” or a “stipulated findings and award.”
Release and Compromise
With a compromise and release, you agree to permanently end your workers’ compensation case in return for a lump sum payout. This implies that workers’ compensation will not cover any future medical treatment linked to your injury, and you will be unable to reopen your case if your condition worsens. In exchange for that uncertainty, you’ll get a greater payout up front and won’t have to risk a hearing.
A compromise has been reached, and the release is complete. Workers’ compensation courts normally won’t let you back out of the agreement if you signed it freely, even if you subsequently require extra money. So, before agreeing to this form of settlement, ensure that your condition is stable and that one of the following is true:
You will not need further treatment, or the lump sum payment will cover the expense of future medical expenditures.
Specified Findings and Award
You and the insurance company will agree on the degree of your permanent impairment and the amount of your compensation if you settle your case with prescribed findings and awards. Unless you can demonstrate a financial necessity for some or all of your benefits to be paid up front, you will receive monthly installments rather than a single amount. This form of agreement has two benefits:
The insurance company will pay for future medical care as needed, but you must follow California’s workers’ compensation laws to get medical treatment.
You may be eligible to reopen your case if your medical condition worsens within five years of your accident.
In California, who approves a workers’ compensation settlement?
Any settlement you reach will need the approval of a California workers’ compensation court. You will submit documents with the California Workers’ Compensation Appeals Board outlining the details of the agreement, or your lawyer will do so if you have one. Typically, a judge will convene an informal hearing to ensure that you understand the agreement and that the conditions are fair. If the settlement is approved by the court, you will receive your lump-sum payout within 30 days.
Do I Need a Workers’ Compensation Lawyer in California?
Unless your injury was minimal and you fully recovered, you should speak with a lawyer before settling your case. This is particularly true if you are contemplating a compromise and release that would limit your future ability to seek extra benefits or medical care.
A lawyer can tell you how much your case is likely to be worth, review settlement offers, and negotiate a higher payment with the insurance company.
A lawyer may help ensure that the settlement agreement does not require you to give up any rights that you should not. If you also have Social Security disability insurance, your attorney may save you money by ensuring that the settlement lowers the amount by which workers’ compensation benefits reduce Social Security payments.
