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Settling Your Workers' Compensation Case
First, if you are currently out of work receiving weekly checks it may not be in your best interests to settle your case. If you are not able to perform your old job at the same rate of pay, it is extremely important that you talk to an attorney before you settle your case or take a lesser paying job.
Usually, workers' compensation claimants have two options once they decide to settle their case. The first is to receive a regular final payment by signing a Form 21 or Form 26A. This is usually based on a rating of a doctor or the average rating of all the doctors. The other option is to settle by "clincher." This will mean a greater size settlement, but it also means that the claimant waives the right to seek ongoing and future medical benefits and the right to reopen their case.
When you sign a Form 21 or Form 26A, you have two years in which to reopen the claim after receipt of the last wage loss compensation payment. However, in order to reopen a claim, there must be a real change of circumstances that affects your wage-earning ability. Just having on-going stiffness or pain is not sufficient. The choice is yours, and we will carefully discuss the options with you when that point is reached. That point is only reached when you have reached the point of maximum medical improvement, or when your doctor has finally released you with a rating. We will then discuss the matter and see which route you would like to take. If we settle your case by clincher, it may take as long as a month or so for you to receive the money. First the written agreement, or clincher agreement, has to be prepared by an attorney for the insurance carrier and mailed to us. It then has to be read carefully by you, and we will answer any questions. Once it is signed by you and by ourselves, it is returned to the insurance company for the signature of your employer and others. It is thereafter forwarded to the Industrial Commission. The Industrial Commission carefully reviews it, examines the entire file and then enters a written order approving the settlement if they think it is fair. Once a written order is received by us, the insurance company may take as long as two to three weeks to prepare your checks. We will contact you and let you know when the papers are in.
Be very wary of signing a Form 21 or Form 26A to accept payment of your rating unless you are able to perform your job. After you've been hurt on the job and have completed your treatment with the doctor, he or she usually says that you've reached a point called "maximum medical improvement" (MMI). This is a term used in North Carolina workers' compensation cases that does not mean that you are "better" but means you are as good as you're going to get. The doctor normally puts you at MMI when he or she is done treating you as a patient. At the same time, the doctor will decide whether or not you have any permanent disability - however minor - as a result of your injury. This is expressed as a percentage and is known as the permanent partial impairment rating (PPI). This is also when the doctor may give you permanent work restrictions.
A disability rating is a tool the doctor uses to show how bad an injury you suffered. For instance, the doctor may say that you have a 10 percent disability. Basically, this means that the injured body part is only 90 percent as good as it used to be. Under North Carolina General Statute § 97-31, the North Carolina Legislature has set out the value of almost every body part in the Workers' Compensation Act.
As set out in North Carolina General Statute § 97-31, the legislature has decided that your back is worth 300 weeks of your compensation rate (which is two-thirds of your average weekly wage). If you made $600 a week before you got hurt, you should have been paid $400 a week while you were out of work. If the doctor assigns a 10 percent PPI, you are entitled to 10 percent of 300, or 30 checks or $12,000 in compensation for the permanent injury to your back. (The back is 300 weeks, so 10 percent of that is 30 weeks, multiplied by the compensation rate of $400.00.)
At this point you should probably expect the adjuster to quickly try to get you to sign an Industrial Commission Form 21 or Form 26A to accept that $12,000 payment. The adjuster may even offer to throw in extra money if you give up the right to future medical care. Again, this is known as a "clincher." You may be willing to take this, but you shouldn't unless you've already returned to work making as much or more as you did when you were first hurt.
Under our laws if you are totally disabled from work, you get paid up to two-thirds of your average weekly wage. If you are partially disabled, meaning you are able to work but you are not able to earn as much as you did before you got hurt, you are entitled to be paid for two-thirds of the difference between what you used to make and what you can make now under North Carolina General Statute § 97-30.
Using the example from above, the injured worker was originally capable of earning $600 per week. Let's assume that as a result of his injury he has returned to work but can now only work part-time at $7 per hour. So he's only making $210 per week. At this point he has a wage loss of $390 per week. So the workers' compensation insurance company has to pay two-thirds of that partial disability, $260 per week.
How long do these workers' compensation payments continue? Unfortunately, under North Carolina General Statute § 97-30, this wage loss is limited to only 300 weeks from the date of injury.
What the adjuster probably won't tell you is that you don't have to take the rating. If you think your wage loss is going to pay out more than the payout for your rating, go that route. Insurance companies hate that because it makes them keep their files on you open as they keep writing you checks week after week after week. They would rather tell you all you can have is your rating and hope you believe them.
Should you take the rating or the wage loss? In the example we've been using, let's assume that the injured worker gets that low-paying, part-time job exactly one year, 52 weeks, after the date of his injury. If that's true, then he's entitled to draw wage loss checks for another 248 weeks. If he were never to get a raise or increase his hours, the insurance company would have to pay him $64,480.00. See why the adjuster wants him to sign the Form 21 or Form 26A, locking him into taking the rating?
The Form 21 and Form 26A also affect your ability to get other benefits. In fact, if you sign these forms and then go out of work again - even for the same injury - the insurance company will argue that you don't get more benefits because you "elected" to receive the rating instead of ongoing temporary benefits. It is a trick maneuver that insurance companies use to take money away from injured workers to which they are lawfully entitled.