Many injured workers who settle their workers’ compensation claims struggle with how to ensure they’ll have enough money throughout their lives. There are many issues to consider in addition to continuing medical care – paying monthly bills, funding a child’s education, and unexpected expenses that may arise. There may also be concerns about complying with various government programs, such as Medicare and future tax implications.

Partnering with an expert settlement consultant is a must for any injured worker thinking of settling his workers’ compensation claim. There are many issues to consider and personal decisions to be made. A competent, experienced professional who spends time getting to know the injured worker and his loved ones can provide invaluable insight and guidance in the process.

Decisions, Decisions

Many people expecting a large sum of money opt for a large cash windfall over a long-term plan.  Sadly, despite their best efforts to preserve it, many of these individuals find the money is soon depleted. Statistics show this happens all too often.

Injured workers who settle their workers’ compensation claims are no different. But those who have the benefit of working with an expert can realize the myriad options involved in a settlement regarding how, when and what amount of money they can collect to meet their specific needs.

As an example, we’ll take a hypothetical case.

John is 57 years old and has been receiving workers’ compensation benefits for 7 years after being severely injured in a work-related accident. John is tired and frustrated with the workers’ compensation system and would like more control over his medical decisions. However, he has significant worries about the settlement amount. He doesn’t know how much would be appropriate to cover his lifetime medical costs and is concerned that he will run out of money too soon. He also has several outstanding debts that must be repaid soon. And he has a family and is worried he won’t have money to address their needs, now and in the future.

Finally, there is the issue of Medicare. He’s been told his medical care would need to be funded through a special fund to ensure Medicare is not forced to pay for treatment that should be covered through workers’ compensation. He doesn’t quite understand that or what his obligations would be.

The Solution

John and injured workers like him could have much improved, empowered lives — if they had an experienced, capable settlement consultant available to help. Such an expert could spend time with John and his family and sort out their various needs:

• Money to pay off immediate expenses
• Medicare and its requirements
• College education funding for his children
• Wedding expenses for his eldest daughter and her boyfriend
• Funds to eventually help care for his aging parents

What John and many others may not understand are the various legal changes over the years that have made a long-term settlement plan much more appealing. For example, the government allows structured settlement payments to be income tax-free if they are the result of a physical injury, sickness or wrongful death. Congress has established specialized annuity contracts to meet the special needs of injured people, and to address the concern that too many people spend their money quickly. The idea is to incentivize injured workers and their families to take their settlement money in a series of guaranteed future payments.

Contrary to what some may believe, there is also the option to take some of the money upfront, and/or as a future lump sum payment. There are no constraints on how the money is paid. For example, it can be

• Monthly
• Quarterly
• Semi-annually
• Annually
• Any combination

The amount paid is also adjustable. There could be a set amount for a few years, then increasing payments to handle anticipated future needs. The money can also be paid out over the person’s lifetime, or set up to continue being paid to heirs upon the person’s death.

In the case of ‘John,’ the settlement could be set up to receive money upfront to pay off his debts, then a stream of steady payments and influxes of larger sums at various points in the future to take care of his family’s needs. A competent settlement consultant can also put John in touch with other professionals such as:

• Lifetime medical care management.
• Lien resolution
• Financial planning.
• Tax consequences.
• Government benefit programs.
• Legal issues.
• Retirement planning.
• Insurance concerns.

Summary

Life is complicated and planning for a lifetime of medical management and financial stewardship from a workers’ compensation settlement is overwhelming and difficult. Working with a settlement consultant who understands the fears, needs, and concerns of the injured worker can both save significant settlement costs and bring peace of mind that lasts a lifetime.

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 founder & lead trainer of Amaxx Workers’ Comp Training Center.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

The only good file is a closed file! That is the mantra of any seasoned workers’ compensation claims professional.  Getting to the state of happiness requires skill, some luck and a lot of exceptional legal drafting when memorializing any settlement agreement.  Failure to do this can result in delay and added costs to a workers’ compensation program.

Outlining the Nature of the Dispute

The requirements for workers’ compensation settlement agreements vary in each jurisdiction.  Never forget to understand the essential requirements and include them in your settlement agreement.  Failure to do so will only cause future problems.  A general survey of state workers’ compensation laws note the following basic requirements:

• Materials Facts: Any settlement agreement should have a statement of admitted material facts.

• Matters in Dispute: The disagreements between the parties should also be stated.  It is important to allow the compensation judge or commissioner reviewing the document to know what matters are to be decided by the settlement agreement.

• Positions of All Interested Parties: The claims and contentions of each party must be stated in the settlement document.  These statements outline what is in

A settlement agreement should also specifically outline what is being settled and how the issues are resolved.  The main item in this area is a lump sum or annuity payment to an injured worker and various agreements regarding medical providers and other interested parties. A settlement consultant should be brought in to explain the options and benefits of receiving the money via periodic payments compared to a single lump sum.

If any issues remain in dispute, it is important to detail those matters. Statute or rule also govern payments under a settlement agreement.  Failure to make timely payments can result in an assessment of penalties.

Types of Settlement Agreements

The types of settlements available under a workers’ compensation system vary in each jurisdiction.  In some instances, the parties are not able to close out future medicals.  In other instances, this is the norm.

• Full, Final and Complete – Including Future Medicals: Under this type of settlement, all workers’ compensation benefits are forever closed out.  If you want something closed out, be sure it is clearly stated in the settlement document.

• Full, Final and Complete – Future Medicals Open: This is a settlement where all indemnity benefits (TTD, TPD, PPD, and PTD) are closed out. Medical benefits are typically only closed out through the date of settlement or some other specified period of time.  The employee remains eligible for future medical care and treatment provided it is reasonable, necessary and causally related to the work injury.

• Partial or “To-date” Settlements: This is a type of settlement where only certain benefits are closed out, or all workers’ compensation claims are resolved through the date of settlement.  Again, it is important to specify with precision what benefits are being closed out and through what date of the closure.

A competent workers’ compensation attorney should be part of this conversation.

Never Forget the Basics!

Regardless of jurisdiction, there are several guiding principles to keep in mind:

• A workers’ compensation settlement may never really be final. Most workers’ compensation acts allow for rescission of the settlement or for it to be vacated should it be determined there was a mutual mistake of fact, fraud or significant unanticipated change in the employee’s medical condition.

• All settlements are presumed to be fair, reasonable and in conformity with the workers’ compensation act. Extra scrutiny can apply in instances where the employee is not represented by an attorney.

• A workers’ compensation settlement must be memorialized in writing and approved by a compensation judge or industrial commission. Failing to receive this stamp of approval can render your settlement agreement meaningless.

Conclusions

Like any legal document, a settlement agreement needs to be carefully drafted and written with precision.  Failure to do so can cause unnecessary (and unanticipated) future expenses.

“Sloppy, imprecise drafting can lead to legal wrangling. A single word in reciting the terms of a settlement, for example, can bring about intense litigation over interpretation. In drafting settlement agreements, lawyers should, quoting novelist Vladimir Nabokov’s advice to writers, ‘have the precision of a poet,’ leaving out the poet’s creativity, originality or artistic flourishes. Had the lawyers here been more studious and careful in choosing a single word (‘plus’), this case undoubtedly would not have been necessary.”  Paluch v. UPS, 2014 Ill. App. LEXIS 283 (Ill. Ct. App. 1st 2014)

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 founder & lead trainer of Amaxx Workers’ Comp Training Center .

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Using mediation as a tool to reduce workers’ compensation program costs is a growing trend across the country.  There are a number of reasons for its increased use.  This includes the fact it involves all parties, allows the employer and employee to have a voice in claim settlement and for creative remedies that would otherwise not be available in a judicial setting.

How Does Mediation Work?

There is no set formula for a successful mediation.  It will typically involve an agreed upon neutral third-party who evaluates the case and moves the adverse parties toward settlement.  More successful mediations are held in-person and can include a mix of joint sessions or when the parties are separated into different private rooms.  Whenever a mediation is conducted, it is important for all interested parties to be present and free from distractions.

Preparing for Successful Mediation

There are a number of steps that parties interested in settlement should take in order to prepare for mediation.  Important steps should include:

• Accurately review the claim to determine exposures and properly set reserves. Obtaining proper settlement authority and discussing settlement options is a must for defense counsel;

• Determine if the case is ready for mediation and whether settlement could include bigger issues such as the closure of all future medicals;

• Identify all potential intervention interests and place them on notice, if necessary. Failure to include a necessary party may be fatal to an otherwise great settlement;

• Have realistic settlement expectations – and also understand what the expectations of the other party might be.

Securing the expertise of a settlement consultant can be a valuable tool prior to mediation. Prior to settlement, they can work closely with the injured worker to gain deep insight into his needs and desires and help all parties attain a successful settlement.

It is also important to prepare a confidential case analysis letter for the mediator.  This is an opportunity to help the neutral third-party understand not only the strengths and weaknesses of your case, but how you view the claims of the employee.  This correspondence should also include expert medical and vocational reports.  By providing this information to the mediator in advance, you can spend less time providing background information while actually at the mediation and more time moving the case toward settlement.

Information provided to the mediator directly related to the mediation and settlement of a claim is generally considered confidential and not admissible in court at a later date.  Be sure to fully understand the confidentially rules applicable to your jurisdiction before submitting information.

Getting to Yes: Tips for Settlements

It is important to keep an open mind when preparing for a workers’ compensation mediation.  Failing to do so will only lead to further frustration and lack of settlement.  Here are some tips to reach a settlement at mediation:

• Prepare a Strategy: This includes playing “devil’s advocate” and discussing the pros and cons of various defenses.  A complete case evaluation should also take place and have a firm understanding of what the opening offer should be, likely counter-offers and the bottom line.

• Keep Interested Parties Posted: In many instances, cases fail to settle at mediation because the parties have not placed interested medical providers on notice of their potential intervention claims.

• Come Prepared for Settlement: Cases often settle at mediation and then languish as defense counsel and the attorney for the injured party exchange multiple drafts of settlement agreements. Proactive stakeholders should bring a laptop computer and portable printer, if available.  This allows the attorneys to have a copy of the settlement documents in hand, ready to review and reach a true final settlement.

Conclusions

Stakeholders interested in reducing workers’ compensation costs should examine the use of mediation as an opportunity to make their programs effective and efficient.  This can include the use of mediation as a tool to streamline the settlement process.

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 founder & lead trainer of Amaxx Workers’ Comp Training Center .

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Which unappealing situation would you prefer?

A. You must seek permission to see any medical provider; then, you may have to wait and/or travel far distances to visit the physician. Any medications, surgeries, or procedures must first be approved, and there’s a good chance some will be denied.

B. You have to navigate a complex healthcare system yourself — meaning you’re on your own to find the right specialists and ensure they charge according to your state’s ‘fee schedule.’ You pay full retail prices for doctor visits and all medications and treatments. You must fully comply with the myriad Medicare requirements or risk ultimately losing that benefit. You are extremely worried you won’t have enough money to pay for your medical care, your mortgage and send your child to college. Short of paying excessive fees for expert advice, there is no one to guide you.

Complex Issues Can Prevent Settlement

Neither scenario is appealing; yet, those are the choices facing many injured workers with long-standing, complex workers’ compensation claims. While many would like to settle and finally leave the workers’ comp system; issues such as lien resolution, financial planning, legal issues, and insurance concerns are just some of the challenging hurdles which are seemingly too difficult to overcome.

Fortunately, a solution to these challenges can often be found that meets the injured worker’s unique needs, along with those of the attorneys, employer, payers, and others involved.  Finding the right people to work with can get claims off payers’ books and ensure the injured worker’s financial and medical needs are taken care of throughout his lifetime.

The Settlement Consultant

A settlement consultant is a settlement expert with knowledge and access to various settlement tools to address the most challenging workers’ compensation claim issues. For example, a consultant that works with insurance planners can provide comparative information on insurance products, such as disability or long-term care insurance. Having the benefit of an expert in Medicare Set-Asides available can ensure compliance and reporting issues are addressed, so future benefits are not put at risk.

These experts can be brought into the process early on, so the settlement is set up appropriately. Rather than just running quotes, the settlement consultant should act as the general contractor in identifying, bringing and managing the best experts to the table to address the issues preventing a positive outcome for all parties in the case.

Settlement Consultant as General Contractor

If you were building a house, you would need workers to lay the foundation and put up the walls, electrical and plumbing specialists, roofers, and HVAC professionals. You might want a home theater with the latest equipment and would need an expert for consultation and installation. Maybe you’d opt for a decorative pond on the property, and would need someone experienced in grading the land.

You would want a general contractor to oversee the entire project and make sure things were done according to your specifications and timeframe.

A settlement consultant should function as a general contractor who coordinates all the moving parts to the settlement. Just like the best general contractors, a settlement consultant should be able to identify and coordinate all the right players needed to create a truly win-win settlement.

Among the qualifications of the best settlement consultants are:

1. Vast experience and deep connections. The best settlement consultants have vast experience and deep connections with many vendors. They can find the right ones for each injured worker.

2. Whole-person approach. Superior consultants look beyond the amount of the settlement. They work closely with the injured worker, to ascertain not only his medical needs, but other considerations; such as unique legal issues to be resolved, insurance concerns; retirement needs, and college funding for children or grandchildren.

3. Ability to uncover lifetime needs. The most qualified settlement consultants spend time getting to know the injured worker and identifying his needs; then bringing in experts to address them.

4. No cost to the injured worker. The consultant’s services should also be completely fee transparent, and come at no cost to the injured worker.

Use Settlement Consultant Early

A settlement consultant should be brought into the case as early as possible, even before the worker has agreed to settle the claim. By forming a relationship with the injured worker and understanding his needs, the consultant can present a variety of customized solutions to focus on his particular situation and help reach an optimal settlement

Conclusion

Settling a workers’ compensation claim can be a nerve-wracking experience for an injured worker, especially one who has been in the system for an extended period of time. Working with a truly qualified settlement consultant can help settle the claim and empower the injured worker to lead the life they deserve.

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 founder & lead trainer of Amaxx Workers’ Comp Training Center .

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

The use of mediation as a means of effective alternative dispute resolution in workers’ compensation is gaining momentum across the United States.  Given the highly litigious nature of many workers’ compensation claims, mediation promotes the involvement in all interested stakeholders and allows parties to resolve their claims in a timely manner.

Members of the claims management team who fail to prepare for mediation will not see its benefits.  Anyone seeking to promote efficiency and reduce workers’ compensation costs must take proactive action in order to make the most of a mediation session.

Effective Use of the Mediation Process

Alternative dispute resolution in workers’ compensation systems can be used even if it is not required or endorsed by a state industrial commission.  The process starts when the employee and employer/insurer agree to use a neutral third party to help resolve their dispute.  When agreeing to do so, it is important to invest time and effort in reaching a settlement.  Terminating the mediation session at the first sign of tension is never helpful.

Preparing for medication is key.  All interested stakeholders must take the following steps:

• Evaluate the claim and set realistic expectations for settlement. While issues such as “pain and suffering” are important to any injury-related case, this is something that does not add value to the underlying claim;

• All interested stakeholders must be present and willing to work hard toward settlement. This includes being physically present at the mediation settlement and willing to sometimes work through lunch or late into the day.  Be prepared for downtime and keeping occupied and focused; and

• Include interested parties and settlement services in the mediation session. Effectively settling a workers’ compensation claim involves many complex issues and considerations. Leverage the following services to prior to and during mediation:

– Defense attorney: Attorneys must play an active role in managing the emotional nature of settlement negotiations, and are a key relationship to leverage early in the claim.

– Settlement Consultant: A settlement consultant can assist the parties to understand the different options available, help identify the true wants and needs of both sides, and provide a negotiation tool to help bridge the gap of negotiations and bring about a successful resolution to the case.

– Professional Administrator: A professional administration handles many of the administrative tasks on behalf of the injured worker once they’ve settled their Workers’ Compensation claim and can provide piece of mind to address many of the injured worker’s fears and concerns prior to settlement.

Be Prepared; Be Willing to Compromise

Preparing for mediation is key for all involved parties.  Steps members of the claims management team must take include:

• Receiving an updated case analysis from your settlement team. Request that this be provided in advance so one can receive clarification, properly set reserves and provide adequate settlement authority;

• Communicate with defense counsel and settlement services well in advance of mediation and develop a strategy. Make sure a confidential mediation statement is also sent to the mediator in advance.  This statement should outline the claims, defenses, and evaluation of the case.  It may also be helpful to provide a statement as to how you see the issues being resolve; and

• Be realistic and willing to compromise. In a settlement via mediation, all parties are able to have a role in resolving a case and be heard.  It is important that there be a willingness to find a happy medium – a “win” for everyone.

Effectively Working with the Mediator

It is important to work with your settlement team to select the right mediator.  This is because each mediator has their own style.

The style of a mediator may also be important depending on the unique facts of a case.  Some of these could include matters involving a pro se claimant, a claimant who is a recent immigrant (cultural sensitivity is an important consideration), someone who is older (or younger) or one who has had many prior workers’ compensation cases.

It is also important to be open and honest with a mediator.  If there is information a party does not want to be disclosed to the other side, make sure you are clear when sharing this information.  Never lie and do not be evasive.

Conclusions

Mediation is a great tool to use when settling workers’ compensation cases. In many instances, it provides for fast and effective resolution to reduce program costs.  When using this tool, it is important to prepare for and be willing to compromise.  It is also important to work with the mediator in an effective manner.

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 founder & lead trainer of Amaxx Workers’ Comp Training Center.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.