If you have been injured at work and are entitled to workers’ compensation benefits, you may be offered the opportunity to receive a one-time, lump-sum payment rather than ongoing weekly payments over a specified time period. This opportunity is part of the New York State Workers’ Compensation Law called Section 32.
Accepting this type of settlement may be more beneficial than taking weekly payments, but that is not always the case. You’ll need to do a careful analysis of your future lost-wage and medical benefits to determine if it is right for you.
One consideration, for example: Since 2007, there has been a cap on the amount of time a worker with a permanent partial disability can collect workers’ compensation benefits. This cap may factor into your determination about whether a Section 32 agreement will be in your best interest. There are a number of other factors that should also be carefully considered.
Medical coverage is an important consideration
Individuals who are eligible for workers' compensation and who have not opted for a Section 32 settlement receive compensation for medical care that is related to the their injury or illness. Electing to accept a settlement, however, usually means the insurance carrier will not be liable for your medical coverage—although is an area that may be negotiated.
If you need on-going treatment for your workers’ compensation injury after accepting a Section 32 agreement, and the total value of your settlement is greater than $25,000, you will probably need a Medicare set-aside arrangement. Your Medicare set aside will allocate a portion of your settlement to pay for future medical care related to your injury. Once depleted, Medicare may be available to pay for treatment for the injury, but it will not cover all of the injury-related medical expenses that workers’ compensation covers.
Taking a settlement is optional
Section 32 settlements are entirely voluntary. You should never feel forced to accept this option. Because a Section 32 settlement is a negotiated agreement between the injured person and the insurance carrier paying the benefits, you and your workers’ comp attorney, if you have one, will have the opportunity to discuss the terms and try to get the best agreement for you. Also, not every insurance carrier is interested in settling, so this is another factor to consider.
Making a well-informed decision is critical
Once a settlement agreement is reached by the injured person and the insurance carrier, it needs to be approved by a workers' compensation judge. After this has happened and the lump-sum payment has been accepted, your workers’ compensation case is considered closed because a compromise and release settlement has been made. At that point, the insurance carrier has no further responsibility to you, and you cannot reopen the case.
Who can help?
Because each workers’ compensation is different, and there is only one opportunity to negotiate your optimal Section 32 agreement, it pays to have an experienced attorney on your side. Lipsitz Green Scime Cambria's workers' compensation attorneys have a long and rich history of successfully battling for injured workers, including in Section 32 negotiations. The firm, which is based in Buffalo, New York, has the know-how and compassion to guide injured parties through the complex workers' compensation and Social Security disability systems.
This article does not purport to give legal advice and is for informational purposes only.