How Is a Workers’ Compensation Settlement Calculated?
Workers in North Carolina have two options when it comes to receiving workers’ compensation benefits. The first (and most common) option is to have medical expenses covered as they arise and to receive weekly payments for disability benefits (for those who qualify).
The second option is to settle the workers’ compensation claim for a one-time lump-sum payment. Negotiating a settlement can be beneficial for a variety of reasons, as long as you know how much you are entitled to recover.
So, how is a workers’ compensation settlement calculated in North Carolina?
The workers’ compensation law in North Carolina entitles eligible employees to two main types of benefits: (i) medical benefits and (ii) disability benefits. When calculating an appropriate settlement value, it is necessary to approach each type of benefits separately.
Calculating Medical Benefits in a Workers’ Compensation Settlement
Medical benefits cover the cost of diagnosing, treating, and recovering from a job-related injury. Injured employees who are eligible for workers’ compensation are entitled to receive medical benefits until they either (a) fully recover or (b) reach maximum medical improvement (MMI). An injured employee is considered to have reached MMI if additional treatment and/or therapy is no longer effective in improving the employee’s condition.
When calculating a settlement, it is critical to have a comprehensive understanding of your medical needs. In this regard, it is important not to rely solely on the advice of your employer’s designated healthcare provider.
Unfortunately, this provider won’t necessarily have your best interests in mind. Instead, the provider may be more focused on getting you back to work as quickly and cheaply (for your employer) as possible, even if this means sacrificing certain aspects of your recovery.
Generally speaking, a workers’ compensation settlement should include an amount that is sufficient to cover your medical expenses now and in the future. This amount should be separate from your disability benefits, which we discuss in detail below.
Working with your providers, your workers’ compensation lawyer will calculate an appropriate medical benefits settlement amount that covers (as applicable) your:
- Medical appointments
- Diagnostic testing (i.e., X-rays, ultrasounds, MRIs, lab work, etc.)
- Surgical procedures
- Physical therapy
- Vocational rehabilitation
- Other forms of treatment
- Medical supplies and medical devices
As you can probably imagine, these costs can add up very quickly. With this in mind, it is important not to rush the settlement process. In fact, until your doctor is able to provide a comprehensive assessment of your long-term medical needs, you should not consider any offers to settle your workers’ compensation claim.
Calculating Disability Benefits in a Workers’ Compensation Settlement
Calculating disability benefits is an entirely different process from calculating medical benefits for the purposes of a workers’ compensation settlement. While medical benefits are determined based on the injured worker’s needs, disability benefits are calculated based on the injured worker’s income (among other factors).
In North Carolina, the general rule is that eligible employees can receive weekly disability benefits calculated at two-thirds (or 66.67%) of their average weekly wage for as long as they are unable to work. For employees who are able to work in a limited capacity, disability benefits are calculated as two-thirds (or 66.67%) of the difference between their current income and their pre-injury average weekly wage.
When an employee suffers a permanent partial disability (i.e., the employee reaches MMI instead of making a full recovery), then his or her benefits may be calculated based on a permanent impairment rating instead. This means that calculating the disability benefits portion of a workers’ compensation settlement requires knowledge of:
- Your average weekly wage for the relevant time period
- Whether you have reached or are likely to reach MMI instead of making a full recovery
- Whether you are able or will be able to work in a limited capacity
- How long you will be partially or totally disabled
If you qualify for Social Security Disability Insurance or other benefits, this could impact the amount of your settlement as well.
In short, calculating a workers’ compensation settlement is an involved process that requires a clear understanding of your medical needs and your rights under North Carolina law. As a result, it is not advisable to try to negotiate a settlement on your own. If you have been injured on the job and would like to know how much you may be entitled to recover, it is in your best interest to speak to a workers’ compensation lawyer as soon as possible.
Is a Workers’ Compensation Settlement Right for You?
Settling a workers’ compensation claim has several benefits. Notably, a settlement gives you greater financial and medical freedom and reduces your dependence on your employer’s workers’ compensation insurer.
However, undervaluing a workers’ compensation settlement can have disastrous effects on your physical and economic well-being. The Whitley Law Firm has the experience to evaluate how much your claim is worth and negotiate a favorable settlement on your behalf.