In this guide
The short version: a workers’ comp settlement offer usually comes after a doctor finds you’ve reached maximum medical improvement and your permanent impairment has been rated. Disputes over the rating, future medical care or Medicare can delay it. In many states the settlement then needs a judge’s or the board’s approval before it’s binding — and payment follows approval.
The stages before an offer
1Treatment and temporary benefits
- What happens
- You get medical care and, if you can’t work, temporary disability payments.
- And the offer
- Settlement talks are uncommon while your condition is still changing — nobody can price a claim whose outcome is unknown.
- Ask
- What does my doctor expect, and when might I reach maximum improvement?
2Maximum medical improvement
- What happens
- A doctor finds your condition has stabilized — often called maximum medical improvement (MMI), or “permanent and stationary” in California.
- And the offer
- This is the point when most claims can be valued, so it often opens the door to an offer.
- Ask
- Do I have a permanent impairment, and what work restrictions apply?
3Permanent disability rating
- What happens
- Any lasting impairment is rated under your state’s system, which turns it into a number of weeks or a percentage.
- And the offer
- The rating sets the floor for what the insurer owes, so offers usually follow it — and disputes over it delay them.
- Ask
- How was the rating calculated, and is it disputed?
4Future medical needs and Medicare
- What happens
- The parties estimate future medical care, and whether you are, or will soon be, on Medicare.
- And the offer
- If Medicare’s interests are involved, a portion may be set aside for future care, which can take extra time.
- Ask
- Will this settlement close my future medical care? Does a Medicare set-aside apply?
5Agreement and approval
- What happens
- You and the insurer agree on terms; in many states a judge or the workers’ comp board must approve the settlement.
- And the offer
- Payment follows approval, not the handshake.
- Ask
- When will this be submitted for approval, and when is payment due after approval?
Approval: the step people forget
A workers’ comp settlement usually isn’t final when you sign it. In California, the Labor Code provides that “no release of liability or compromise agreement is valid unless it is approved by the appeals board or referee.” In New York, a Section 32 waiver agreement “is not binding unless it is approved by the Workers’ Compensation Board” — and once approved, the claim is closed and cannot be reopened. Other states have their own procedures, so ask where your agreement must be filed and how long approval takes.
If you’re on Medicare — or soon will be
When a settlement closes future medical care, part of it may be set aside to pay for that care before Medicare does — a workers’ compensation Medicare set-aside arrangement (WCMSA). Submitting a proposed set-aside to CMS is voluntary, and CMS reviews one only when a threshold is met. Check yours:
CMS’s review thresholds: the claimant is a Medicare beneficiary and the total settlement is greater than $25,000; or the claimant reasonably expects to enroll in Medicare within 30 months and the total settlement is expected to be greater than $250,000. Whether or not a threshold is met, ask your lawyer how the settlement protects Medicare’s interests.
Why offers stall
- You haven’t reached maximum medical improvement. Until then, the claim can’t be valued with confidence.
- The impairment rating is disputed. A second medical opinion or evaluation can add months.
- Future medical care is uncertain. Especially when surgery or long-term care may be needed.
- Medicare is involved. Preparing a set-aside, and getting CMS’s review when you choose it, takes time.
- Approval is pending. The money moves after the judge or board signs off.
Before you accept an offer: five questions
- Does this settlement close my future medical care, or leave it open?
- Is my permanent disability rating final and undisputed?
- Does a Medicare set-aside apply, and who will manage it?
- Who must approve this settlement, and when will it be submitted?
- How much is my lawyer’s fee, and does a state rule limit it?
Frequently asked questions
When does workers’ comp usually offer a settlement?
Most often after your doctor finds you’ve reached maximum medical improvement and any permanent impairment has been rated, because that’s when the claim can be valued. Disputes over the rating, future medical care or Medicare can push an offer later.
Does a workers’ comp settlement have to be approved?
In many states, yes. California’s Labor Code says no release or compromise agreement is valid unless it is approved by the appeals board or a workers’ compensation judge, and in New York a Section 32 waiver agreement is not binding unless the Workers’ Compensation Board approves it.
Can I reopen a workers’ comp settlement later?
It depends on the state and the type of settlement. In New York, once a Section 32 agreement is approved, the matter is closed and cannot be reopened. Some states allow settlements that leave future medical care open; others close the whole claim. Ask which kind you’re being offered.
What is a Medicare set-aside in a workers’ comp settlement?
It’s an agreement that sets aside part of a workers’ compensation settlement to pay for future medical care that Medicare would otherwise cover. Submitting a proposed set-aside to CMS for review is voluntary, and CMS reviews only cases above its thresholds.
How long after a workers’ comp settlement do I get paid?
Payment follows approval of the settlement. How quickly it must be paid after approval depends on your state’s rules and the agreement, so ask your lawyer or the claims adjuster for the payment deadline in writing.
Reviewed by
Morgan Hale, Editor. Writes about the financial side of injury claims — fees, liens, timelines and state rules — and checks every page against its sources before it’s published. Not a lawyer; “Morgan Hale” is a pen name. Editorial policy · How we calculate
Sources
- California Labor Code § 5001 — settlements must be approved by the appeals board or a judge (FindLaw (California Labor Code))
- Section 32 Waiver Agreements (settlements must be approved; approved claims are closed) (New York State Workers’ Compensation Board)
- Workers’ Compensation Medicare Set-Aside Arrangements (review thresholds) (Centers for Medicare & Medicaid Services)
Not legal or financial advice. InjuryMath is not a law firm and does not sell or broker funding. This page gives general information based on the sources listed; your contracts and your state’s law control. For advice about your situation, talk to a licensed attorney in your state.