When Will Workers' Comp Offer a Settlement?

If you got injured or sick at work, you’re not alone. Private companies in the United States reported 2.6 million workplace injuries and illnesses in 2021. State workers’ compensation programs offer support to you and other injured workers by paying for medical expenses and sending weekly payments when you’re out of work recovering.

One common scenario for workers’ comp claimants is a settlement that offers a lump-sum payment instead of requiring you to request medical reimbursements or wait for weekly checks from an insurance company.

You can negotiate a settlement on your own, but that can quickly become complicated. We’ll explain how workers’ comp settlements work, what affects your potential payout, and what your options are if you receive an offer.

What is a worker’s comp settlement?

A workers’ comp settlement is an offer from your employer’s insurance company to pay you a set amount of money instead of regular medical and wage benefits. A settlement is usually one lump-sum payment, but you may also have the option for a structured payment plan.

Not all workers’ comp cases end in a settlement, but many do. How much you get also depends on your workplace injury, the workers’ comp laws in your state, and some other factors we discuss below.

When will workers’ comp offer a settlement?

You can receive a settlement offer at any point in the process, but settlements commonly happen around the time you reach maximum medical improvement (MMI). At this stage, you and the insurer will have a better idea of how much more medical care you’ll receive, how much it would cost, and whether you could need long-term benefit payments.

However, a settlement offer could also come very early in the process. Giving you one lump-sum payment is much simpler for an insurer than navigating months of payments and medical care.

Similarly, if your treating physician believes your injury will take months or years to recover from, the insurer may settle to avoid having to pay you long-term benefits. Early settlements also protect the insurer in case you have unexpected symptoms or setbacks during treatment.

Another factor that can impact when you get a settlement is the time of year. Some insurance companies (or even workers’ comp lawyers) will push to settle before the end of the calendar year in order to get the settlement contract on their books for the upcoming tax season.

How to respond to a settlement offer

Once you get a settlement offer, you have three possible actions to choose from:

1. Accept the settlement at the amount your employer’s insurer offers.
2. Reject the settlement and continue to receive benefits.
3. Negotiate the settlement amount.

When your employer’s insurer offers a settlement, they likely have their own best interests in mind. So even if you want to accept a settlement offer, it’s important to pause and double check whether it’s enough to cover your current medical bills, future medical expenses related to your injury, and the money you’ll need to pay for housing, food, and other bills while you’re out of work.

Ultimately, if you’re considering a settlement offer, a workers’ comp lawyer can help you avoid leaving money on the table.

Should I get a lawyer for my settlement?

We recommend talking with a workers’ comp lawyer when you receive a settlement offer. They’ll have experience helping workers in similar situations, so they’ll understand how much future medical care could cost and how much workers’ comp benefits should be worth.

Again, there’s nothing wrong with accepting a settlement offer and you don’t need a lawyer. It’s just important to make sure the settlement is enough to cover all your current and upcoming expenses. The last thing you want is to accept an offer because it sounds fair, only to realize a few months later that your medical bills are higher than expected and you need to either go into debt or try returning to work while still injured.

Finding an experienced lawyer is also easier than you think. Atticus can match you with a vetted workers’ comp lawyer who will offer a free consultation and won’t charge anything up front. To get started, fill out our 3-minute workers’ comp quiz.

How much does a workers’ comp lawyer cost?

A workers’ comp lawyer won’t charge anything up front, but you will need to pay their fee out of your settlement. The average workers’ comp lawyer fee is 15% of your settlement value. And while that can be a lot, the average settlement is also five times higher for people with a lawyer versus people who negotiate on their own.

Factors that affect your settlement

These factors will impact your settlement amount and timing:

• The severity of your injury or illness: The insurance company may be more motivated to settle if it looks like your recovery will last months or years. An injury that’s more severe or is expected to last for the long-term will also lead to a higher settlement value because it needs to cover more medical bills and more weeks of lost wages.
• The treatments you receive: Certain treatments can increase or decrease your potential payout. For example, a surgery that improves your symptoms could lower your payment, while a surgery with complications could raise it. (Learn more about how surgery affects settlements.)
• Where you live: Workers’ comp laws vary by state and your state may have more guidance on how much insurers should pay for certain injuries. Learn more about your local laws on your state workers’ comp board website.
• Appeals and denials: Your claim can take much longer to settle if your employer’s insurance company denies your workers’ comp claim or appeals your benefits. Both of these scenarios could lead to some sort of mediation or court hearing to confirm that you should even get benefits.
• Your disability rating or impairment rating: As you reach maximum medical improvement, your doctor will do an assessment to give you a disability rating or an impairment rating. These ratings use a scale of between 1% and 100% to define how much your disability impacts your ability to work and function. A 100% rating would mean total disability, whereas a 50% rating would mean you’ve lost 50% of functionality in the affected part of your body. A higher rating often leads to a higher payment.
• Your lawyer’s, mediator’s, or judge’s opinions: During a settlement negotiation, your employer’s insurer can debate all of the factors above to limit how much you get. Your lawyer will advocate for the highest settlement possible by making a case for you (so finding a good workers’ comp lawyer really helps). If your settlement goes to mediation or court, the opinions of the mediator or judge will also affect how much you get.

How long does a settlement take?

Unfortunately, there is no one answer that applies to every situation. Smaller settlements could take a few weeks to work out while long more complicated settlements could take two or three years. A safe estimate for many people could be at least one year to complete a settlement — a bit longer if you have a lawyer — but you’ll get a much more accurate estimate from a lawyer who knows your claim details.

How long after a settlement will I get paid?

The time it’ll take for you to receive your payment depends on where you live, the size of your payment, and the other details of your settlement. Most people will need to wait at least a month or two for their payout, but a lawyer can provide a more precise answer.

Get help with your workers’ comp claim

The best way to get personalized advice on your claim is by talking with a lawyer. They’ll know your local laws and can help you get the benefits you deserve so you can get back to work and move on with your life.

Atticus is a law firm and we can match you with an experienced lawyer in your area. Fill out our free workers’ comp quiz and a member of our team will reach out to learn more about your situation and connect you with a lawyer who’s right for your case. Getting matched is free, the lawyer won’t charge anything up front, and you don’t need to work with our lawyers if you don’t want to.

Frequently asked questions about workers’ comp settlements

Do all workers’ comp cases end in a settlement?

Not all workers’ comp cases end in a settlement, but many do. Claims that will continue after you reach MMI may especially lead to a settlement. Injuries with short recovery times are less likely to result in a settlement, but you can still request one.

Should I accept a workers’ comp settlement?

We recommend getting a lawyer’s opinion before you make any decision related to a workers’ comp settlement. It’s important that you negotiate enough to cover your current and future medical expenses, plus enough to cover your other bills when you’re out of work. Knowing how much to ask for and how to negotiate for the highest amount are things a lawyer can help you with.

How much does workers’ comp pay if I don’t settle?

People on workers’ comp receive payments equal to a percentage of the wages they earned before their injury (usually two-thirds). Here’s how much workers’ comp pays by state.

How long after a workers’ comp settlement do I get paid?

You should plan to wait at least one to three months after a settlement before you actually get your payment, but that timeline depends on multiple factors. Your lawyer or the insurance company will have a more specific answer for your settlement.

Does surgery increase a workers' comp settlement?

It depends. Surgery could decrease or increase your potential settlement depending on how much it improves your symptoms and whether you experience complications. You can learn more in our breakdown of surgery and workers’ comp settlements.

Are workers’ comp settlements taxable?

No, workers’ comp settlements aren’t taxable. Other workers’ comp benefits aren’t taxable either, with rare exceptions.

Related resources:

What Happens If You Can't Return to Work After an Injury?

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How Much Does Workers' Comp Pay in Every State?

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