Can I Change My Decision to Accept a Workers Comp Settlement?
You Can Change Your Mind and Back Out of a Workers Compensation Settlement. But You Have a Limited Amount of Time to Do So and Have to Follow the Commission’s Rules.
For many injured employees the workers comp claims process ends in a compromise settlement agreement.
That means your employer and its insurance carrier promise to pay you a lump sum amount of money. And in exchange for that lump sum amount you agree to give up your right to additional workers compensation benefits, including wage replacement, permanent partial disability benefits, and the payment of future medical expenses related to your work injury. Though sometimes you can keep your award of lifetime medical benefits while settling the other parts of your claim.
The decision to end your workers comp case is an important one. And while it may seem like the right decision when you first accept a settlement offer, it is normal to have second thoughts in the days and weeks after you have agreed to settle your case. Especially if you accepted the settlement offer because of the stress of litigation, which often includes discovery, depositions, interrogatories, mediation, and a workers compensation hearing, or because you have not hired an attorney and do not want to take on the insurance company alone.
The purpose of this article is to discuss what you can do if you change your mind about a workers compensation settlement and want to back out of the agreement. Unlike many other types of contracts in Virginia, including personal injury and car accident settlements, you have options. But you must act quickly.
Keep reading to learn more. And if you have any questions about workers compensation, or are looking for a top rated work injury lawyer in Virginia, call me for a free consultation: (804) 251-1620 or (757) 810-5614. I’ve helped hundreds of employees get favorable results and renegotiate settlements. And I’m ready to help you.
Common Reasons that Injured Workers Have Second Thoughts About Settlement and Want to Renegotiate Their Deals
As I discuss later in this article, there is a point where it is too late to back out of a settlement. And that’s why it is so important that you get every possible dollar for your work injury now, before you reach that point.
Below is a list of some of the common reasons injured workers call me to ask if they should renegotiate a settlement offer they just accepted. See if any of them apply to you.
Additional Medical Treatment is Recommended
Unless there is a dispute about whether you suffered a compensable injury or occupational disease, I usually recommend waiting until you have reached maximum medical improvement (MMI) to settle your case. You have reached MMI when your treating physician says that your condition cannot be improved any further, and that the only medical attention you may need for your work injury is pain management and palliative care, such as acupuncture or chiropractic care.
I recommend this because it is easier to project your future medical expenses and negotiate a fair settlement at this point. If you accept a settlement before you know your level of permanent impairment and what treatment you will need for your work injuries for the rest of your life, such as a spinal fusion or joint replacement, then you may run out money much sooner than expected.
You Find Out that You Must Resign Voluntarily
In the past few years I’ve noticed more employers, workers compensation insurance carriers and claims administrators such as Travelers, The Hartford, Sedgwick, American Airlines, United Airlines, Target, Amazon, Kroger, and Gallagher Bassett refusing to settle claims unless you resign.
While this obstacle is usually easy to overcome if it is brought up early in the negotiation process, many defense attorneys and claim adjusters wait until you have agreed to a number to tell you that resignation is required to settle the case.
Depending on the facts of your case, such as whether you are employed currently in a full duty or light position, you may need more money for settlement to make sense. Or you may need to talk with an employment lawyer to see if you have additional claims under state or federal labor laws.
For more information, read my article titled Why Do I Have to Resign to Settle My Workers Comp Case?
Private Health Insurance Refuses to Pay for Medical Treatment Related to Your Work Injury
There are some situations where you can use private health insurance to pay for medical treatment for work-related injuries, even if your health insurance contract excludes workers compensation injuries from coverage.
For example, if the Workers Compensation Commission enters an order denying certain benefits related to your injury then Virginia’s Anti-Subrogation Statute, found at Code Section 38.2-3405, applies and you can use your private health insurance. This is why it is so important to draft the settlement documents carefully.
If, however, you file a workers comp claim and then receive an award of benefits, either by entry of Award Agreement forms or after a deputy commissioner issues a decision, then your private health insurance plan may refuse to cover treatment.
Unfortunately you may find out that your health insurance plan wants to retract payments it has made on your behalf for the work injury, or that it refuses to cover additional treatment, after you agree to a settlement. Depending on the settlement amount, you may need to renegotiate your deal.
You Find Out That Your Outstanding Medical Bills are Much More Than You Thought
If you agree to pay outstanding medical bills from your settlement, rather than having the workers comp insurer pay them, then it is important that you know the exact amount of those bills.
Unfortunately some medical providers and health insurers let months, or even years, pass before sending a bill. This is one reason it is important to keep copies of all your Explanation of Benefits (EOB) Statements.
If you receive an unexpected medical bill for treatment for your workplace injury after you have reached a deal with your employer and its workers comp insurer, then consider renegotiating the settlement amount.
You Apply or Qualify for Social Security Disability Insurance (SSDI) Benefits and Become Eligible for Medicare
If your work-related injuries cause permanent disability that prevents you from returning to work, then you may qualify for Social Security Disability benefits. It is possible to receive both Social Security Disability and workers comp payments at the same time.
Depending on where you are in the Social Security Disability application process, the amount of your workers comp settlement, and, if approved, the date the Social Security Administration (SSA) finds you disabled under its laws, then you may need to include a Workers Compensation Medicare Set Aside allocation in your settlement and submit that proposal to the Centers for Medicare and Medicaid Services (CMS) for approval. If you don’t, then Medicare may refuse to pay for additional treatment in the future.
I have represented several clients who negotiated a workers comp settlement just before their Social Security Disability hearing with an administrative law judge, where they were approved. In these instances I renegotiated the settlements to protect both my clients’ and Medicare’s interests.
The Workers Comp Insurer Wants to Include the Settlement as Part of Its Lien Against Your Third Party Case
If someone else’s negligence causes your work-related injury, then you can file both a workers comp claim and a third party claim under tort law. For example, you may have both types of claims if you are a truck driver hurt in a work-related motor vehicle crash, a nurse attacked by a patient’s family member, or a delivery driver for UPS who slips and falls on a defective step.
Though you can receive monetary damages through both claims, your employer and its insurance carrier have a workers comp lien against the money you receive through the third party claim, regardless of whether you settle or receive a verdict after trial.
Usually the lien includes payments for medical treatment and indemnity benefits, such as temporary total disability (TTD) or temporary partial disability (TPD) payments. But recently many insurers have asked to include the amount of the workers comp settlement in the lien. Depending on the amount of insurance coverage available and the amount of your workers comp settlement, including the settlement in the lien may leave you with nothing in the third party case.
If the insurance company includes the settlement amount in its lien as part of the settlement documents, then consider renegotiating your deal.
Child Support Orders
In Virginia a creditor cannot garnish your workers compensation check or settlement, with one exception – the Department of Child Support Enforcement (DCSE). The DCSE can garnish part of your settlement for past due spousal or child support.
If the DCSE sends a Garnishment Order to the insurance carrier, then the carrier must comply with the order and pay some of the settlement funds toward the lien. Depending on the amount of child support you owe, it may not make sense to settle for the agreed to amount because you will net little.
For more information on this topic, read my article about Child Support and Workers Comp.
You Simply Want to See if More is Available
You may not have a reason for renegotiating your workers comp settlement other than you would feel more comfortable with more money.
That’s fine.
If you act quickly enough then you can back out of settlement for any reason or no reason at all.
Is a Workers Compensation Settlement Agreement a Contract?
Yes.
A workers compensation settlement is a valid and enforceable contract under the law because both parties are giving something of value. Your employer or its insurer are giving you a lump sum of money. And you are giving your employer and its insurer closure and a cap on the amount of money they will have to pay for your work-related injuries or occupational illness.
But unlike many other types of contracts, a workers comp settlement does not become valid and enforceable when you and your employer sign the documents.
When Does a Workers Compensation Settlement Become Final in Virginia?
Your settlement becomes final when it is approved by a deputy commissioner with the Virginia Workers Compensation Commission.
You will know the date the settlement becomes final because the Commission will stamp a date on the Order approving your settlement.
Once final, your workers comp settlement becomes a valid and enforceable contract.
My article, How Long Does a Workers Comp Settlement Take?, discusses what happens between when you agree on a settlement and when the Commission decides it is in your best interest and approves it.
Can I Change My Mind Before My Workers Compensation Settlement Becomes Final?
Yes.
Either you or the insurance carrier may withdraw its offer to settle before approval by the Commission.
Can I Back Out of a Virginia Workers Compensation Settlement Once It is Approved and Becomes Final?
Maybe.
Whether you can back out of a workers compensation settlement approved by the Commission depends on how much time has passed since approval.
When Less than 30 Days Have Passed Since Settlement Approval
If less than 30 days have passed since the date the Commission approved your settlement, then you can change your mind and withdraw your acceptance of the offer.
To do so, you must file with the Commission a motion to set aside the settlement agreement within the 30-day timeline. This motion is sometimes called a motion to vacate, or a motion to withdraw consent.
As long as you file this motion within the deadline, you do not have to state why you changed your mind.
The Commission will then issue an Order granting your motion. If you have received any settlement funds from the employer or its insurer, then you must repay those. If you don’t, then the employer may sue you for unjust enrichment in civil court, or seek a credit against future workers comp payments.
When More than 30 Days Have Passed Since Settlement Approval
In theory you can back out of a workers compensation settlement if more than 30 days have passed since the Commission approved it. But in practice, it is nearly impossible to do.
If more than 30 days have passed since your workers comp settlement was approved, then the Commission will set aside the settlement agreement only if you show evidence of fraud, mutual mistake of fact, or imposition.
The imposition doctrine is a legal concept that allows the Commission to make decisions based on justice shown by the total circumstances even though no fraud, mistake, or concealment is shown. For the doctrine to apply, you must show a series of acts by the employer upon which you naturally and reasonably relied to your detriment.
To try to back out of settlement more than 30 days after Commission approval, you must file a motion to set aside that contains the specific facts, statements, or actions you are relying on to show fraud, mutual mistake, or imposition. Without specifics, the Commission will deny your request.
In my experience representing not only injured workers but also employers, insurance carriers, and third party claim administrators (TPAs), it is difficult to persuade the Commission to set aside a settlement after the 30-day mark. Do not count on being able to back out of a settlement if you wait more than 30 days.
Should You Withdraw Your Offer to Settle Your Workers Comp Case?
Just because you can back out of a workers comp settlement does not mean that you should.
There are potential benefits, but also potential negative consequences.
If you back out of settlement repeatedly then the insurance carrier may decide not to try to settle with you at all. Or, if you back out of settlement now and additional evidence comes to light, your future settlement may be for less money.
As with most things, the specific facts of your case matter. Before backing out of a workers comp settlement, call an attorney right away to discuss your options.
If you live in Richmond, Fredericksburg, Fairfax, Manassas, Roanoke, Harrisonburg, Winchester, Bristol, Williamsburg, Newport News, Norfolk, Virginia Beach, Suffolk, Chesapeake, Hampton, or anywhere else in Virginia, call me today: (757) 810-5614 or (804) 251-1620. I’ll help you evaluate your current settlement offer and whether you should renegotiate.
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