Taking a Workers’ Comp Settlement in North Carolina: Should You, or Should You Not?

Taking a Workers’ Comp Settlement in North Carolina: Should You, or Should You Not?

If you have been injured on the job, then your employer may offer you a workers’ compensation settlement.  These settlements can take two alternate methods:  1) A “Form Settlement” based on your disability ratings, or 2) A lump sum buyout called a “Clincher Agreement.”  Settlements may be offered because insurance carriers want to keep costs down and avoid the risk of getting ordered by the Industrial Commission to pay benefits over many years time. One benefit to you in taking a settlement is that you can guarantee a certain result to your claim.  But should you take this settlement?

Workers’ Compensation settlements are not always what they seem. They may sound like a good idea at first, but after taking some time to consider all aspects of them, many people decide against accepting the offer. This article discusses all of the pros and cons so that you can make an informed decision about whether or not these types of settlement are right for you.

An injured North Carolina worker has several important decisions to make, but one that is often critical and requires consultation with an attorney experienced in workers’ compensation law. This can be especially true when discussing settlement amounts or other aspects related to your case outside formal proceedings like mediations where fees may apply-it’s best not to make these arrangements without knowing all the facts!  Sometimes a mediation can be just the appropriate and timely thing, and other times it can be a complete waste of time, emotional angst, and expense.

Clincher Agreement

The North Carolina workers’ compensation system is unique and provides many different outcomes. However, one of the more common ones that you may encounter is called a “clincher agreement.” A clincher agreement can be defined as being a full and final settlement where one lump sum is paid to cover all present and future medical treatment needs. It will also provide wage replacement benefits until the date of settlement, so it’s not just any old payout scenario but something worth looking into if one is ever faced with such an unfortunate situation!  It is rare in a clincher settlement where the employee is able to keep their job.  Also, many times the Employee will lose his/her health insurance when taking this type of settlement, so it is important to for the Employee to focus efforts on coordinating public health programs alongside private healthcare providers to prepare for future medical treatment.

Protecting Employees

North Carolina’s workers’ compensation system is designed to protect employees if they are injured on the job. However, some people may think that settling a case means you’re giving up your right to receive benefits. It can be more beneficial for the injured worker if they fight through their injury instead of accepting short-term financial relief from employers/insurers who don’t want responsibility or liability associated with harmful acts like reckless hiring practices.

One type of settlement is called a form settlement.  This is where the employee is paid an amount of money based on three factors:  1) the Employee’s Compensation Rate, which is 2/3 of their AWW, 2) the part of the body injured, and 3) the PPD rating given by the authorized treating physician.  Under this type of form settlement, the Employee almost always keeps his job and returns to work for the Employer.  The insurance carrier is responsible for future medical treatment to the injured part of the body for a future period of time as defined on the form.

Maximum Medical Improvement

The decision of whether to accept a North Carolina workers’ comp clincher settlement requires careful analysis. For this reason, great care must be taken in settling an injured worker’s compensation claim before the completion and the end-of healing period called Maximum Medical Improvement “MMI.” It is difficult to accurately evaluate either the value of the claim or future medical needs before MMI and permanent work restrictions are assigned.

When an employee is injured in their work, they should factor both temporary total disability and temporary partial disability payments into a fair settlement amount. This evaluation should also include any assigned rating and how long the Employee expects to receive future payouts for either type. For example, when settling an injury claim, one thing to consider is how many indemnity payments will remain in the future after the employee has received their current wage replacement benefits.

Settlement Proceeds

It’s essential to know how Social Security will treat your settlement funds. If they don’t calculate it correctly, the disability payments you receive could be dramatically decreased or even denied entirely! There are several ways for them to do this.  It is important to consult with an experienced lawyer BEFORE you sign your Clincher Agreement!!!  If the Social Security offset language is not appropriately drafted, you could end up LOSING your settlement to Social Security in the form of missed SSD monthly payments.

If you consider a settlement in North Carolina workers’ comp cases, this is an important decision which requires careful consideration. There’s no calculator for determining how much money you could get from this kind of case, so it needs more thought than just crunching numbers and percentages.

Please talk to the experienced attorneys and staff at Morrison Law Firm PLLC. PERRY KNOWS!  Call us at 252-243-1003.

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