Under North Carolina Workers’ Compensation law, eligible injured workers have the right to medical treatment and disability compensation from their employers and/or insurance carriers. If you suffered an injury in the workplace, you are entitled to compensation, including medical costs, lost wages and disability compensation. In addition, families of deceased workers can claim funeral expenses compensation.
Employers hiring three or more full or part-time workers must buy Workers’ Compensation coverage from private companies.
When an injury on the job occurs, one way to receive compensation is by filing your claim with the Industrial Commission. Other way to be compensated is to accept a Workers’ Compensation settlement.
There are two ways of settling your compensation claim: the form settlement and the clincher agreement.
Your employer and the insurance carrier are particularly interested in getting you to sign a clincher agreement.
Instead of calculating your compensation amount based on your disability rating, the insurance company may offer you a clincher agreement, meaning you get your complete compensation now for future medical costs. They are “buying out” your claim.
Therefore, a clincher agreement is a contract between the employee, the employer, and the insurance company. The agreement provides that the worker is being compensated for any costs that may result from future medical treatment, including lost wages and other benefits.
The agreement enabling the worker to receive a lump sum cash payment is subject to approval by the North Carolina Industrial Commission. The Commission Rule 502 states the list of requirements the insurance company must meet for an agreement to get a green light. Among other conditions, the insurance company must continue payments of the benefits to the worker until paying the agreed-upon amount. The purpose of the approval procedure is the protection of the worker.
Although clincher agreement terms may look appealing at first sight, you must be wondering if there is a catch. Well, there is. Otherwise, the insurance carrier would not have offered you upfront payment of all future medical costs exceeding your expectations.
You have to waive any future claim against the employer that may arise for any reason whatsoever. When you sign a clincher agreement, you lose the right to claim compensation for any cost that may occur in the future regarding the injury you suffered on the job, including any health benefits you might receive. In addition, must of these settlements require resignation from your job because clincher agreements rarely allow the employee to keep their job.
That depends on you. But before you make a decision, you need to understand that after signing a clincher agreement, you are your own. No matter what the future brings, what will job market be like and how your health condition will evolve, you are not entitled to claim any benefits from your employer.
From the point of view of the insurance company, the choice is clear. After you put your signature on the agreement, they close the file. Instead of paying medical costs and benefits for many years to come, their lawyers will gladly draft an agreement granting you a lump sum payment in exchange for you releasing future liability against the employer.
If you consider settling your claim through a clincher agreement, please consult with an experienced compensation attorney before making any decision.
At Morrison Law Firm PLLC, we will look at your case from all angles to ensure the proposed agreement is the best option for you.