How Long for a Compensation Settlement?

by Laurie Brenner; Updated September 26, 2017

Injured workers who experience debilitating injuries resulting in a permanent disability are often eligible for a lump-sum payout or "settlement." Though federal law mandates workers' compensation programs, it does not set the specifics for those programs. Each state sets the guidelines and requirements, the disability ratings and the payment periods in which worker's compensation carriers must comply. Compensation settlement payment deadlines vary by state and type of settlement agreement.

Compromise and Release Settlement

Most states recognize a variety of settlements types, each with its own specific payment deadlines. Most states recognize a compromise and release settlement, which includes a payout for medical so you can manage your own future health care as a result of the injury. This type of settlement is a one-time-only settlement and will not allow you to seek additional remuneration or benefits under the claim. Once you accept the terms of the agreement and sign the settlement, most states set a 30-day time line for the settlement payment. Late payments usually include additional funds as self-imposed penalties set at a specific percentage of the payout, by state. Sometimes this type of settlements allow for some periodic payments.

Structured or Stipulated Settlements

These types of settlements may include a smaller lump sum payment but also include periodic payments and payments for future medical treatments. For people without health insurance, this might be a better option. This type of settlement involves structured payments over a specific period, all of which must meet periodic deadlines defined by the state in which the injury occurred.

Adjudicated Settlements

When a settlement cannot be reached the case is forwarded to the state's appeals board or workers' compensation administrative law judge, depending upon the state's specific workers' compensation code language and programs. When the injured worker and the workers' compensation insurance carrier cannot agree on a settlement, the judge will determine the settlement, the amount and the specific deadline under which the settlement is paid.

Permanent and Stationary

Any settlement cannot be reached in a workers' compensation case until the qualified treating or examining doctor provides a report that indicates the worker's injuries have reached a permanent and stationary status. Because of the nature of some injuries, it may take months or even years to reach this status. During that time, the injured worker under the care of the treating physician is able to receive statutory benefits defined by state laws. Once a permanent and stationary status is reached, negotiations can begin for any settlements. Some states treat settlements as the exception, rather than the rule.

Your Rights

It is important to understand your rights under workers' compensation laws. Injured workers, especially those with permanent injuries, are entitled under state law to seek the guidance and assistance of a workers' compensation attorney. While claims examiners are to keep the best interests of the injured worker in the forefront, a claims examiner also works for the workers' compensation carrier. Because each state manages its own workers' compensation program, contact your state's department of insurance or division of workers' compensation for specific details. If you have not received a settlement or payment timely, file a complaint with the state agency (see Resources).

About the Author

As a native Californian, artist, journalist and published author, Laurie Brenner began writing professionally in 1975. She has written for newspapers, magazines, online publications and sites. Brenner graduated from San Diego's Coleman College.