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Full vs. Structured Payments for Workers’ Comp Payments in Colorado

October 29, 2019 by Katie McClure

Injured man filing for work injury claim.

Most Colorado employees have the right to receive workers’ compensation benefits if they get hurt while on the job. In many cases, workers receive these benefits through a settlement. The settlement can come in the form of lump sum, or full payment, or it could come in the form of a structured series of payments. It depends on the circumstances of the case.

If you have been hurt at work and wonder what type of settlement you could be eligible to receive, get in touch with an experienced workers’ compensation attorney at The Sawaya Law Firm. Since 1977, we have work closely with workplace injury victims in Denver and throughout Colorado. We can review your case in a free, no-risk consultation.

What Is the Difference Between Full and Structured Workers’ Compensation Payments?

Full and structured workers’ compensation payments are different in many ways. A full payment is an arrangement in which an injured employee collects one lump sum payout in compensation for an injury. Structured payments, on the other hand, are payments made over a period of time. A worker typically receives the payments on a weekly or monthly basis. 

When a worker accepts a lump sum settlement offer, the worker agrees to forego seeking any future payments from the employer and/or its workers’ compensation insurer in exchange for receiving benefits “up front.” A lump sum payment should reflect the cost of the benefits that an insurer would have paid if the claim were not settled, including medical benefits, wage losses and, perhaps, permanent disability benefits as well. 

Structured settlements, on the other hand, take the form of guaranteed payments at specific intervals. The payments may continue for a particular time period, or they may last through the injured worker’s life. In these cases, the insurance carrier will still pay the entire settlement amount up front. However, the settlement will basically be “sold” to another financial company, which will be responsible for paying out specific amounts at regular, agreed-upon intervals. Almost everything about a structured settlement can be negotiated by the parties ahead of time, including: 

  • How often payments will be made 
  • The amount of the payments
  • Whether payments will cease upon the worker’s death or continue to be paid to the worker’s heirs.

How Can I Receive Full Workers’ Compensation Benefits?

Most workers who decide to settle with their employers once they have reached maximum medical improvement (MMI) will opt for a lump sum payment. However, this type of settlement is possible only when both parties are willing to negotiate as all settlement arrangements are completely voluntary. 

The best way for a worker to go about collecting full workers’ compensation benefits is to: 

  • Report an injury to the employer as early as possible
  • Carefully complete any necessary paperwork
  • Seek medical attention from an employer’s list of approved providers
  • Strictly comply with the doctor’s orders regarding treatment and returning to work (if at all)
  • Working with an experienced workers’ compensation attorney.

Taking these steps is often enough to convince an employer that an injury is valid and compensable, and that reaching a settlement for a lump sum payment will serve all of the parties’ best interests. 

If an employer is unwilling to negotiate or unfairly denies a worker’s claim, the worker has the option of appealing the decision to the Colorado Department of Labor and Employment. The appeals process starts by filing an Application for Expedited Hearing within 45 days of receiving notice of the denial. Claimants who can prove that a denial was improper could receive full benefits from the employer through an administrative order. 

How Much Money Does Full Workers’ Compensation Benefits Provide?

Generally, when an insurer accepts responsibility for an injured worker’s permanent disability benefits, and at least six months have passed since the date of the accident, the worker can request a lump sum payment. However, if a worker takes this step, the worker will receive only the present value of his or her benefits.

Additionally, Colorado law limits the amount that a person can receive in a lump sum workers’ comp settlement. This amount is adjusted for inflation every year. So, in 2019, a worker who was injured after January 1, 2014 can collect a maximum lump sum payment of only $94,330.19. If the worker has multiple dependents, the sum could increase to $188,658.

Ultimately, settlement values are based on a number of factors, including the total amount of benefits that a person could receive as well as any weaknesses in a claim. Because these issues may complicate the settlement process, a worker will benefit from working with an experienced Colorado workers’ compensation lawyer.

Are Structured Workers’ Compensation Benefits Better?

Choosing a structured workers’ compensation settlement provides a number of benefits. For instance, structured settlements are almost always guaranteed for life. So, they can provide a definite source of income for the foreseeable future. Unlike a lump sum payment, structured payments are not taxable. Additionally, an employer’s decision to pay an annuity provider up front can expedite the settlement process. 

Still, structured settlements are not right for everyone. An injured worker should use great care to assess a number of important factors when deciding whether to accept a full or structured payment for workers’ compensation benefits. In most cases, it is best to speak with an attorney who is familiar with Colorado workers’ compensation law and can help you to choose the option that is best for you and your loved ones.

Schedule a Free Consultation with an Experienced Workers’ Comp Lawyer 

If you were hurt at work and have questions about your right to workers’ compensation benefits in Colorado, contact a member of our dedicated work injury legal team at The Sawaya Law Firm through any one of our five offices located in Denver, Greeley and Colorado Springs. Our initial consultations are always free of charge, and you will owe us no costs or fees unless we secure benefits for you.   


Katie joined The Sawaya Law Firm in 2005, where she focuses her practice on workers’ compensation, Social Security disability and veterans’ benefits law. Since 2009, Katie has served as a managing partner in which she manages the firm’s Social Security Disability Department and co-manages the Workers’ Compensation Department. She is a graduate of Colorado State University, where she majored in Speech Communications and served as a cheerleader, and the University of Denver College of Law. She holds a black belt in martial arts (Kung Fu San Soo) and formerly cheered for the Denver Nuggets. Today, in her free time, Katie enjoys playing piano, practicing yoga and traveling with her family.

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