This is a very common question, perhaps the most common question that I receive during an initial visit with a new client. The answer, of course, is that it can depend on several factors. To best answer this question, we must start with the basic benefits that are applicable to any admitted claim for Workers’ Compensation. While not all benefits are applicable to all cases, there are three primary benefits worth discussing.
Medical Treatment under Workers’ Compensation Claims
The primary benefit under any Workers’ Compensation claim is medical treatment. There is no monetary cap on benefits. We see claims with medical benefits ranging from a few thousand dollars to several million dollars. The important thing to note is that medical benefits generally do not equate to money that you are owed by the insurance company, and even on an admitted claim, any medical benefit can be contested on the grounds of reasonableness, necessity, or relatedness. As a general rule, the injured worker has the burden of proof to show that any denied benefit passes that three pronged test. The only way to truly monetize medical benefits is to settle your claim. While an insurance company will never pay 100 cents on the dollar for a denied benefit or a future benefit that has yet to be utilized, this can often be the basis for a good portion of any cases settlement value. The more treatment that is being recommended by a doctor, the more an insurance company is likely to offer for that piece of the settlement puzzle.
Temporary Partial or Temporary Total Disability
The next benefit that merits discussion is lost wages, also known as Temporary Partial or Temporary Total Disability. While you are treating for an injury, the law provides that the insurance company must compensate you for any wage loss that is related to the injury in question. There must be a causal relationship between the wage loss and the injury itself. Practically speaking, this typically requires work restrictions from a doctor combined with your employer’s inability or unwillingness to accommodate those restrictions. If in fact you are owed lost wages, the insurance company will pay them at a rate of 2/3rds of your average wage at the time of injury. The money paid is not taxable, but it still generally amounts to a reduction in earnings while you are treating for your injuries. Lost wages stop following a full duty release by a doctor or if you are placed at Maximum Medical Improvement (MMI), a term of art that essentially means that continued medical treatment is unlikely to provide any further functional benefits. It is generally advised that an injured worker does not settle their case until they are at or very close to MMI in order to ensure that these first two benefits are maximized.
Potential Settlements for Workers’ Compensation Claims
Finally, the bulk of any compensation owed, or the value of any potential settlement at the end of a claim, is based on Permanent Impairment. Virtually any part of your body, including psychological issues, can receive an impairment rating, but there are two main types. The first type is an Extremity or Scheduled rating. These are ratings to your arms and legs. These do not very from person to person in terms of value, as each are worth about $620 a point. The second type of rating is known as a Whole Person rating. These are generally applied to anything attached to your spine, head, neck, back, cognitive, etc. The value of these ratings can vary wildly between different people, as both your average wage and an age factor are part of the formula. Generally speaking, the younger you are and the more money you make, the more a Whole Person rating is worth. We see Whole Person ratings range from less than $500 a point to more than $5,000 depending on these factors. While reasonable minds can disagree on the rating applied to a specific injury (this can often be the source of conflict at the end of a case), the value of said rating does not change assuming the other factors (age and wage) are known.
What is a Settlement Value Based On?
Generally speaking, as settlement value is based on the above three factors. There are monetary caps (currently around $90,000) for both lost wages and permanent impairment. Settlement usually involves a fundamental tradeoff: maximizing future medical care vs. maximizing financial compensation. The most common misconception is that non-economic benefits such as pain and suffering are included in the system, but unfortunately, there is no mechanism to recover such benefits. The primary bulk of your settlement value is your impairment rating. The primary factors that drive settlement value above your impairment ratings are estimated or contested future medical care and the possibility of increasing your underlying rating through the various channels available to contest your impairment rating, which typically include a second opinion from a Division Independent Medical Examiner or in a court room with an Administrative Law Judge. As both come with a high degree of uncertainty, an insurance company is typically willing to discuss settlement of a claim to resolve these types of issues.