When a claim is open, oftentimes our goal in workers comp is to get that claim closed. Hello my name is Michael Stack and i’m the CEO of Amaxx and today i want to talk about settlement settling workers comp claims. And i want to talk about a specific strategy in tact in regards to using a structured settlement to aid in getting more claims closed successfully, getting a financial return, saving financial dollars and giving injured workers peace of mind and helping them get a better outcome in their settlement.
So let’s talk about very quickly there are many barriers to why claims don’t settle. I want to talk about two. One is disagreement of value. We’re going to write these up here on the top so disagreement of value and then the other one is emotion so disagreement of value and emotion are two of the biggest reasons why claims don’t settle. And under this emotion bucket there are psychosocial issues, there are family issues, there’s fear, there’s the fear of the unknown, there’s all kinds of things under this emotional bucket. There’s all kinds of things under this value bucket which is
- disagreement on the cost of future prescription drugs
- disagreement future costs of medical
- disagreement maybe on the indemnity value
- disagreement of life of expectancy
- disagreement on all kinds of things that would dictate not coming to terms on these two things
First thing you need to do is understand what’s actually going on here. What’s actually going on regards to emotion. What are the real issues that are being brought to the table and the way you do that is you listen. You actually listen and you ask these questions as far as being able to actually really understand and that takes a little bit of time. It takes a little bit of intentionality, takes a little bit of effort to actually really understand the emotion what’s really going on behind that and then you can vary or maybe not. Always vary but much easier address this value issue.
There’s a lot of things we can do then once we understand the emotion we can leverage a lot of different tactics. I want to talk about using a structured settlement. Once you understand the emotion then you can address the value. Let’s say we’re talking about a 500 000 settlement and there’s a difference in value a difference in understanding. Let me tell you very simply what you can do here, with this structure you can buy five hundred thousand dollars worth of value let’s say for three hundred and seventy five thousand so 500 000 worth of value you can purchase for 375 000 saving yourself 125 000 on the payer side. You say well how does that work, that how can i give my injured worker 500 000 worth of value but only cost me 375. if you ever think of those remember those savings bonds. When you were kid maybe you got these, i certainly did for my grandmother you’d get like a 20 savings bond and you know you maybe you were six or seven or eight how old you were and maybe your grandmother went to the bank and bought that twenty dollar savings bond let’s say for you know, ten dollars or twelve dollars or eleven dollars or eight dollars whatever the amount was and over time that savings bond grew to be twenty dollars but only let’s say it cost her you know 9.25 or whatever the amount was. Same idea applies here in regards to an annuity structured settlements are extremely valuable tool and tactic to bridge this gap in terms of value.
If you first understand the emotion because there’s a lot of flexibility you can do here in these structures. You say well, i need some money for my you know my daughter’s going to be getting married and i’m going to want to send the kid to college and we’ve got these other kind of things going on that we want to do with the settlement money. Okay great. let’s bake those into the process and let’s do that and let’s just be intentional so that that injured worker is then protected with an income stream for the rest of their life. My name is Michael Stack i’m the CEO of Amaxx and remember your work today in workers compensation can have a dramatic impact on your company’s bottom line but it will have a dramatic impact on someone’s life. So be great
Author Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is the founder & lead trainer of Amaxx Workers’ Comp Training Center, which offers the Certified Master of Workers’ Compensation national designation.
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