Workers Comp Settlement Time Frame: How Long Does It Take to Get Money After a Workers Compensation Settlement?
Reaching a Deal With Your Employer and Its Insurance Company is Just the Beginning of the Workers Comp Settlement Process. Learn What to Do After Settling Your Case So That You Get Commission Approval of Your Settlement and Your Check As Fast As Possible.
There are many reasons to settle a workers comp case. One of them is closure.
Though some claims close within 6 months of the date of accident, other workers compensation claims last several years, even a decade or more. Especially if you suffered a catastrophic injury that takes years to reach maximum medical improvement (MMI), such as a head injury resulting in post-concussion syndrome, a back injury, neck injury, or herniated disc resulting in spinal fusion surgery, amputation, a broken bone resulting in arthritis, or a burn injury.
That is a long time to deal with the stress of litigation and the constant worry that the insurer will issue a medical treatment denial or stop wage loss benefits for an arbitrary reason. And it makes settlement appealing.
But before you agree to settle, you need to know how long it takes to get your workers compensation settlement check after the parties reach a deal. Agreeing to a settlement does not help your stress or financial situation if you have to wait several months to get your money.
Virginia workers compensation settlements require court approval. That means that even if you and the insurance company agree to settle your case, the settlement is not binding unless the Workers Compensation Commission reviews and approves your agreement.
The steps you need to take to get settlement approval are complicated. You, your employer, and its insurance carrier must follow many procedural rules to finalize a settlement, or else it may take much longer to get your money.
The purpose of this article is to discuss what you need to do to get your workers compensation settlement check as fast as possible.
Keep reading to learn more. And call me if you have any questions about workers comp in Virginia: (804) 251-1620 or (757) 810-5614. One reason my peers and past clients have voted me one of the best workers compensation lawyers in Virginia is that I have guided hundreds of injured employees through the settlement approval process. And I’m here to help you.
How Do I Reach a Workers Comp Settlement?
Settlements are voluntary. You cannot force your employer or its insurance carrier to settle your workers comp claim. And they cannot force you to settle either.
To reach a settlement, you must negotiate with the workers comp claims adjuster or insurance defense attorney. Read my article on negotiating Virginia workers compensation settlements to determine how much your claim is worth and how to maximize its value.
Once you and the insurance company agree to a dollar amount to settle your claim and other terms, such as whether a voluntary resignation is required and how long the insurer will have to continue to pay for medical care for your covered injuries, you have a tentative settlement agreement.
But this tentative settlement is not final until the parties submit the appropriate paperwork to the Commission and the Commission approves the settlement terms.
What Paperwork Do I Have to Sign to Get Commission Approval of My Workers Comp Settlement?
Obtaining Commission approval of a workers compensation settlement requires a lot of paperwork.
After you agree to a tentative settlement, the insurance company’s attorney will prepare a Petition and Order. They will then send the documents to you and ask you to sign and return them. These documents are required to get Commission approval of settlement.
The insurance company’s attorney may send other documents also. For example, you may receive the following:
- A confidentiality agreement
- A release of employment law claims
- A resignation letter
- An agreement not to reapply for a position with the employer
- An affidavit about your Social Security Disability or Medicare status
- A Workers Compensation Medicare Set Aside Agreement (WCMSA) that details how much of the settlement is allocated to Medicare-covered medical expenses
- A letter from the Centers for Medicare and Medicaid Services (CMS) approving the proposed WCMSA if the settlement meets CMS review thresholds
- A letter stating that the company issuing the annuity is authorized by the State Corporation Commission (SCC) to transact the business of insurance in Virginia if you agreed to a structured settlement
The insurance company’s attorney should have discussed these documents with you when you were negotiating the settlement. But I know from experience that doesn’t always happen and that receiving some of these documents may come as a surprise.
Make sure you understand what you are signing. These documents can affect more than just your workers comp case. And it is not too late to back out of settlement.
The Commission also requires the parties to submit the following documents before it will process a settlement for approval:
- A medical report detailing your current medical condition and whether your have reached MMI. This should come from your authorized treating physician. You may also submit a copy of your Functional Capacity Evaluation (FCE) if you have completed one.
- An informational letter from you or your attorney stating that you are competent to manage your settlement funds and describing how you will use the money. This document, also called a Workers Comp Settlement Support Letter, is sealed. The insurance company’s attorney cannot read it.
- A notarized affidavit where you state that you understand settlement is voluntary and what workers comp benefits you are potentially giving up by settling.
- A fee statement signed by you and your attorney, if you are represented. This statement sets forth the proposed attorney fee and costs to be deducted from the settlement and paid to your lawyer.
What Do I Do If the Workers Compensation Settlement Documents Are Wrong or I Want to Make Changes or Additions to Them?
You may disagree with some of the language in the settlement documents. Or want language added. I often do when reviewing draft workers compensation settlement documents for my clients.
Usually I am able to resolve these concerns with the insurance company’s attorney. Once the appropriate changes and additions are made, I review the revised settlement documents with my client and recommend they sign it.
If you are not represented and are unable to work out the changes you want made to the settlement documents, you do not have to sign them. Just remember that the insurance company may refuse to make the changes and to settle your case, even though you have a tentative agreement. No deal is final without Commission approval.
What the Judge is Looking For: How Does the Workers Compensation Commission Review Settlement Documents?
There are three steps to persuading the judge to approve your workers compensation settlement.
First, the settlement documents must satisfy the technical requirements of Rule 1.7 of the Rules of the Workers Compensation Commission.
The Commission’s review of the workers compensation settlement paperwork is limited to certain documents: the Petition; Order; Affidavit; Claimant’s Confidential Informational Letter; and, other documents reflecting your current medical status and the funding of the settlement or a Medicare Set Aside Arrangement. You must tell the Commission if there are ancillary agreements, such as an Employment Release, Resignation, or Agreement Not to Reapply. But the Commission does not have jurisdiction over these agreements and will not review them.
Second, the documents must satisfy the Commission’s policies on settlement, which change over time. Many of these are written. But some are only known through experience, which is another reason to hire an attorney.
Third, the settlement paperwork and supportive documentation must convince the judge that settlement is in your best interests. This is done through careful drafting and by providing the right documents.
The first two steps – review for compliance with technical and policy requirements – are completed by staff members with the Commission’s Settlement Department.
The last step is completed by the judge.
If you satisfy all three steps, the Commission will approve the proposed workers compensation settlement so that you can get your money.
What Do I Do if the Commission Refuses to Approve My Settlement?
The Commission has never rejected any of my clients’ proposed settlements.
But it has asked for more information before approving the settlement, or the addition or revision of certain settlement language, especially when the settlement involves a lifetime medical buyout, the compromise of a denied claim that could make health insurance responsible for coverage of your work injuries, or an annuity.
If the Settlement Department’s staff or the judge have concerns about your workers compensation settlement, you will receive a letter or phone call notifying you that additional information or documentation is necessary. You may also receive a letter asking you to participate in a conference with the judge reviewing your settlement documents.
Give the Commission the information it asks for. If you are not sure of how to respond to the request for more information, call an attorney right away. Otherwise the Commission will delay approval and it will take longer to get your settlement check.
How Will I Know if My Workers Compensation Settlement is Approved?
When the Workers Compensation Commission approves a settlement, a copy of the signed Order Approving Joint Petition for Approval of Compromise Settlement is mailed to every party listed on WebFile. That means a copy is sent to you, your employer, your employer’s workers compensation insurance company; the third party administrator (TPA), and your attorney.
If you signed up for WebFile and provided an email address to the Commission, you should receive an automatic email notifying you of settlement approval.
You should also receive a phone call, email, or letter from your attorney telling you the Commission approved the settlement.
Timeline for Getting Your Money: Usually It Takes 4 to 8 Weeks to Get Your Workers Compensation Settlement Check After Reaching a Deal With Your Employer or Its Insurance Carrier
Usually it takes 4 to 8 weeks from when you reach a settlement agreement through direct negotiation or mediation to get your workers compensation settlement money. This is a rough estimate influenced by many factors.
Factors Affecting How Long It Takes the Commission to Review and Approve Workers Compensation Settlement Documents
The timeline for settlement approval is affected by:
- Whether you work for a county, city, or school division that requires a presentation to and approval by a Board of Supervisors, City Council, or City/County Attorney’s Office.
- How long it takes for the insurance company’s attorney to prepare the settlement paperwork.
- How long it takes you or your attorney to review the settlement paperwork.
- How long it takes to work out any proposed changes or additions to the settlement documents.
- How long it takes for you to review, sign, and return the settlement documents.
- Whether you need CMS to review a proposed Medicare Set Aside Arrangement. This can add weeks, or even months, to the settlement approval process.
- How busy the Commission’s Settlement Department is.
- Whether the Commission requires additional information and documentation.
- How quickly the parties provide the Commission with the additional information requested.
- Whether there is a dispute over attorney fees. This happens when you fire an attorney before settling your case and that attorney files a fee lien that must be resolved.
A few years ago a new judge took over the Commission’s Settlement Department. The workers comp settlement approval process has moved much quicker since he did.
How Much Time Does the Insurance Company Have to Pay the Settlement Money After Approval by the Commission?
Virginia Code Sections 65.2-524 and 65.2-706 govern timely payment of settlements in most cases.
Read together, the statutes provide that settlement payments are due within 44 days of Commission approval of the settlement.
If the settlement is not paid timely, the employer or its insurance carrier must pay the late payment penalty. This is equal to 20 percent of the total settlement amount.
How Can I Get My Workers Compensation Settlement Check Faster?
In my experience many insurance carriers and TPAs issue payment within 10 days of Commission approval of the settlement. Especially when the injured worker is under an open award for temporary total disability benefits and can get their benefits reinstated by moving to vacate the settlement. Or when the injured worker continues to get treatment and has used their award for lifetime medical benefits recently, and the carrier is concerned it will have to pay for more medical attention if the settlement falls through.
But there is only one way to make sure you get your workers comp settlement check sooner: Negotiate a specific payment date and put it in the settlement documents.
The Commission’s late payment penalty applies when the parties agree to a payment date in their lump sum compromise settlement. The two-week period provided by Code Section 65.2-524 begins to run from the date set by the parties.
You should negotiate a settlement payment date at the same time you negotiate the total settlement amount and whether it includes a future medical buyout. I recommend starting the negotiation by asking for payment within 7 days of Commission approval of settlement.
I also recommend confirming that the insurance company has the correct mailing address for you. And following up with the claims adjuster weekly until you receive your workers comp settlement check.
What Can I Do If My Settlement Check is Late?
If your settlement check is late, file a change in condition claim with the Commission seeking payment of the settlement amount plus a 20 percent late payment penalty.
The Commission will allow the employer and its insurance carrier to respond.
The penalty is owed unless the Commission finds that the settlement payment has been made as promptly as practicable and (i) there is good cause outside the control of the employer for the delay or (ii) in the case of a self-insured employer, the employer has issued the required lump sum payment as a part of the next regular payroll after the payment became due.
If the employer or its insurer ignore the Commission’s request for a response, or continue to fail to pay the settlement, you should ask the Commission for a workers compensation hearing. You also have options under contract and tort law to get the employer’s attention and to make sure you are paid.
Have More Questions About Getting Approval of Your Workers Compensation Settlement? Get Help Now.
The decision to settle your workers comp claim is a major one.
Fortunately, you do not have to make it alone.
Call me if you want help increasing the amount of your workers comp settlement and putting yourself in the best position to get Commission approval of the settlement: (804) 251-1620 or (757) 810-5614.
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