Can I Get a Lump-Sum Settlement for Workers’ Compensation Benefits?

Once an injured or ill worker reaches maximum medical improvement, a worker can consider a lump sum settlement. Maximum medical improvement is the time when additional medical treatments are not likely to improve your health – though additional treatments can keep your health stable. Workers should not seek to settle their work injury claim before they reach maximum medical improvement, because you should know the full severity of your health problems before settling a claim.

In workers’ compensation claims in Tennessee, injured workers are entitled to:

• Payment for all necessary and reasonable medical bills. If you require medical treatment to improve your health and to keep your injury or disorder from getting worse, workers’ compensation can pay for it. Certain experimental or other ineligible treatments may not be covered, however.
• Payment for temporary total disability. Workers generally receive 66 2/3% of their gross weekly wage for up to 450 weeks, if necessary, or until the employee returns to work.
• Payment for permanent partial disability. Under the law, you can receive up to 450 weeks of benefits in total regardless of whether you return to work. Further, “If an employee has returned to work with any employer making the same or greater rate of pay on the date of injury or if the employee is not working and the loss of employment is due to voluntary resignation, retirement, or termination for misconduct, then the employee is not entitled to any increased benefits at the conclusion of the compensation period.”
• Payment for permanent total disability. If you are permanently impaired as a result of your injury – such as losing a hand or developing a terminal illness – you may be entitled to permanent disability compensation. Even if you can return to work, you still may be entitled to permanent disability benefits.
• Payment for vocational benefits. When applicable, you can be retrained to do a different job for your company if your injury leaves you unable to do your previous work. Workers’ compensation pays for this retraining.

A lump-sum settlement is essentially a one-time payment to resolve all of your claims, including past claims that haven’t been paid, and all the future income, medical benefits, and vocational benefits you are entitled to receive. The parties to the lump-sum settlement are the injured worker and the employer. Medicare may need to approve the settlement to protect their interest in a case. Lump sum settlements should also be approved by the Tennessee workers’ compensation office or judge.

If you know that there are no further medical expenses for your injury, a lump-sum settlement may be right for you. If you have returned to work, you may wish to receive a settlement rather than a check each month.

What happens when a work injury is fatal?

If your loved one dies while in the course and scope of his or her job duties, the spouse can claim burial expenses of up to $10,000, and 50% of his or her average weekly wage for up to 450 weeks. These benefits can also be paid in one lump sum. (A one-time settlement of $20,000 will be paid to the estate if there are no dependents.)

What are the benefits to getting a lump-sum settlement for benefits?

If you will not require ongoing medical care, are nearing retirement, or are overwhelmed with bills, a lump-sum settlement may be best for you. You don’t have to pay taxes on your workers’ compensation settlement, so it won’t affect your returns in a negative way.

The disadvantages of commutation for your workers’ compensation benefits

There are two strong reasons why a lump-sum settlement may not be advisable:

• If medical complications develop, you can’t ask for more money. If your injury or illness is severe, and may require additional care or treatment later on, you may be denied additional compensation if the settlement agreement closes your right to future medical treatment. So, whatever your settlement is, it is permanent. You cannot receive more. If a new treatment comes out for your injury, you will be on your own to pay for it.
• You work better on a budget. If you don’t accept the lump-sum settlement, you should be paid on a regular (often a weekly, bimonthly, or monthly) basis. If you accept the money and spend it unwisely, you can’t go back and ask for a do-over – even if you have new medical bills.

If you have questions about your workers’ compensation options, Rocky McElhaney Law Firm is here to help. Our team has represented injured workers throughout the state of Tennessee in settlement negotiations as well as appeals. Contact us in Nashville, Hendersonville, or Clarksville today to learn more. Please call 615.425.2500, or fill out the contact form. Your initial consultation is free.