When injured workers hear the word “settlement,” they may picture one big check that closes the claim for good. That’s how some injury claims work, but Texas workers’ compensation cases follow a different set of rules.
An insurance company generally can’t pay you to give up your right to future medical care for a covered work injury. Texas also limits when disputed income benefits can be settled and when future payments can be made in a lump sum.
For injured workers wondering “what is a workers’ comp settlement and how does it work in Texas?” this guide will be extremely helpful. We’ll explain what a settlement can cover, which benefits stay protected, how the approval process works, and why you should be careful before signing an agreement.
What Is a Texas Workers’ Comp Settlement?
First off, there are no settlements in a workers’ comp case, at least not in the traditional sense.
When we say, “Texas workers’ comp settlement,” we’re referring to a written agreement that resolves a disagreement in a workers’ compensation claim. Instead of continuing through conferences, hearings, or other DWC proceedings, the injured worker and the insurance company agree on how certain benefits will be handled.
These settlements usually deal with disputed income benefits. For example, the insurance company may have denied payments, paid too little, or stopped benefits before the worker believed they should end. A settlement can resolve those disagreements, but the payment should align with benefits available under Texas law.
Texas usually doesn’t let injured workers settle the entire claim for a single lump-sum payment. A settlement also doesn’t take away the worker’s right to medical care for the work injury.
Even after disputed income benefits are settled, the worker may still receive reasonable and necessary treatment related to that injury.
The Texas Division of Workers’ Compensation, often called the DWC, must approve a Benefit Dispute Settlement. The agreement has to follow Texas law, accurately state the deal, and be in the injured worker’s best interest.
What Can a Texas Workers’ Comp Settlement Cover?
A Texas workers’ compensation settlement usually deals with disputes over income benefits. These benefits replace part of the pay you lost because your injury kept you from working or limited what you could earn.
For example, the insurance company may claim you could’ve returned to work sooner than your doctor said. You may also disagree about when your disability started, how long it lasted, or how much you should’ve been paid.
Other disputes may involve your average weekly wage, your maximum medical improvement date, or your impairment rating. Any of those issues can affect how much you receive and which benefits apply.
Texas has four main types of income-based workers’ compensation benefits:
- Temporary income benefits
- Impairment income benefits
- Supplemental income benefits
- Lifetime income benefits
Any settlement amount has to be based on benefits you could actually receive under Texas law. It can’t just be a random number picked to make the dispute go away.
That’s why the paperwork behind your claim is so important. Pay stubs, wage statements, medical records, work restrictions, benefit checks, and return-to-work offers can all help show what the insurance company may owe you.
When Can a Claim Be Settled?
A Benefit Dispute Settlement can’t be approved until the injured worker reaches maximum medical improvement, or MMI.
MMI is the point when a doctor believes the injury probably won’t improve much more with additional treatment. Texas law also sets a deadline for MMI if the worker hasn’t reached it sooner.
Reaching MMI doesn’t mean you’re fully healed. You may still have pain, work restrictions, or a need for more medical care. It simply means your condition is stable enough to look at long-term issues.
One of those issues is your impairment rating. A qualified doctor assigns this percentage based on the permanent damage caused by the injury. That rating can affect how many weeks of impairment income benefits you receive.
The worker and the insurance company can’t just pick an MMI date or impairment rating to make a deal work. Both have to be properly assigned under Texas law before an impairment dispute can be settled.
Can You Receive a Lump-Sum Payment?
Most of the time, the answer is “no.” Texas usually doesn’t let injured workers take one lump-sum payment for all future workers’ comp benefits.
A settlement may still include payment for benefits the insurance company should’ve paid earlier. For example, the carrier may agree to pay some of the temporary income benefits it denied.
That doesn’t mean all future payments can simply be added together and paid at once. Texas places strict limits on lump-sum payments for benefits that haven’t come due yet.
But there is one limited option involving impairment income benefits, or IIBs. If you’ve returned to work for at least three months and are earning at least 80% of your average weekly wage, you may be able to request the rest of those benefits in one payment.
That isn’t the same as settling your entire workers’ compensation claim. It’s also a decision you should make carefully because taking IIBs early may affect your right to receive supplemental income benefits later.
The Texas Workers’ Comp Settlement Process
The process starts with figuring out exactly what you and the insurance company disagree about. It could be the type of benefit, the dates benefits should’ve been paid, your wage calculation, a medical finding, or another issue affecting the claim.
Next, you or your lawyer will gather the records needed to review the dispute. That may include medical reports, work-status forms, pay records, benefit-payment history, MMI paperwork, and your impairment rating.
Those records can help show whether the insurance company used the wrong wage amount, ignored your work restrictions, stopped benefits too soon, or relied on a medical opinion you disagree with.
From there, both sides may exchange information and try to work out a deal. If they reach an agreement, the terms must be put in writing.
At that point, a Benefit Dispute Settlement should be submitted on DWC Form-025. Signing the form doesn’t make the settlement final by itself. The DWC still has to review and approve it.
Why the DWC May Reject a Settlement
The DWC won’t approve every settlement it receives. The agreement has to follow Texas law and make sense for the injured worker.
A settlement may be rejected if it tries to shut down medical benefits, includes a lump-sum payment that isn’t allowed, or settles an impairment dispute before the worker reaches MMI. There can also be problems if the MMI date wasn’t properly certified or the impairment rating wasn’t assigned correctly.
The wording has to be clear, too. The DWC needs to know which issues are being settled, which benefit periods are covered, and how the payment amount was calculated.
They may also ask for details about the worker’s income and financial situation. That helps them decide whether the agreement is fair and protects the worker.
If the DWC rejects the settlement, that doesn’t automatically mean you’ll never be able to settle. The parties may be able to fix the problems, sign a new agreement, and submit it again.
When Should You Turn Down a Settlement?
Don’t sign a settlement unless you understand exactly what you’re agreeing to. You should know how the payment was calculated, which benefit periods it covers, and which disputes will be closed for good.
Take a close look at the MMI date and impairment rating, too. If either one is wrong, it could affect how much you receive.
Be careful if the adjuster is rushing you or saying this is your only chance to get paid. That’s a really bad sign.
If the amount doesn’t match the benefits you may be owed, you may be able to keep negotiating or continue through the DWC dispute process. That could include a benefit review conference, arbitration, or a contested case hearing, where a judge reviews the evidence and hears both sides.
Turning down an unfair settlement doesn’t mean you’re giving up on your claim. It just means the insurance company needs to offer better terms.
How a Texas Workers’ Comp Lawyer Can Help
The workers’ comp settlement process can get confusing fast. You may be dealing with medical records, wage calculations, work restrictions, MMI paperwork, impairment ratings, and several different types of benefits at the same time. On top of that, the insurance company may use numbers and legal terms that are hard to follow.
A Texas workers’ comp lawyer can sort through all of that and explain what the disputed benefits may actually be worth. They can compare the insurance company’s calculations with your medical records, wage history, payment records, and other evidence to see whether anything was missed or underpaid.
Your lawyer can also deal with the insurance company and review the settlement before you sign it. You should know exactly which issues are being resolved, which benefits stay open, and whether the payment lines up with what you may be owed.
If the case doesn’t settle, your lawyer can help with DWC forms, gather and organize the evidence, and represent you at conferences or hearings.
Contacto Grossman Law Offices Hoy
You don’t have to figure out a workers’ comp settlement or deal with the insurance company on your own. These agreements can affect important income benefits, and the insurance company isn’t going to stop and point out every detail that could work against you.
Grossman Law Offices can review your claim, explain the proposed terms, and determine whether the agreement accounts for the benefits you may be owed. If the offer falls short, we can deal with the insurance company and help you decide what should happen next.
Contact Grossman Law Offices for a free consultation before signing a settlement or Benefit Dispute Agreement. Let us review the paperwork and help you protect your rights.
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