A settlement is a payment by the insurance company to an injured worker in exchange for the injured worker giving up the right to all future workers’ compensation benefits. The settlement may be paid in a single lump sum or structured over a period of time.
A case that settles before liability is established is commonly called a “denial and dismissal” type of settlement. This type of settlement is used in cases of disputed claims. In exchange for the payment of money, the injured worker agrees that his/her claim shall be denied and dismissed. The insurance company is not responsible for the payment of any medical bills in this type of settlement. The money paid in such a settlement is not considered a workers’ compensation benefit and is therefore not subject to TDI or welfare liens.
A case that settles after liability is established is called a commutation. In exchange for the payment of money, the injured worker agrees that the insurance company will have no further responsibility for the injury. All medical bills for services rendered up to the date of the settlement hearing will be the responsibility of the insurance company.
An injured worker is not entitled to a settlement. A case will settle only if the injured worker and the insurance company can agree on an amount. An injured worker cannot force an insurance company to settle and an insurance company cannot force an injured worker to settle. The Court does not get involved in settlement negotiations. The Court only gets involved after an agreement is reached and the matter is referred to the Court for approval.