Welcome to the ultimate guide for settling your workers' compensation case with a Section 32 agreement! When done right, these settlements can turn your workers' compensation case into a large stack of tax-free cash, but they can also be used by insurance companies to rip you off, tricking you into accepting less money than your case is actually worth.
So how do you know what the value of your case is? What’s the step-by-step process for filing a Section 32 agreement? And how do you make sure you don’t get taken advantage of by the insurance company along the way? Strap yourself in, because we’re answering all of these questions right now!
If you get injured at work, your employer’s workers' compensation insurance will pay ongoing benefits for any lost wages, permanent disability, and medical care related to the injury. But sometimes it makes more sense to negotiate a settlement with the insurance company instead of continuing to receive those ongoing benefits.
A Section 32 agreement puts a complete and final closure on your ongoing medical and cash benefits in exchange for a one-time, tax-free, lump sum payment from the insurance company. It’s formally known as a “Section 32 Waiver Agreement” because you’re essentially “waiving” your right to request additional compensation and medical benefits in the future. Occasionally, there is an “indemnity only” Section 32, which settles the monetary part of the case while leaving the medical portion open, but it’s more common for Section 32 agreements to be a full and final settlement of all issues in your case.
It’s important to note that once your settlement is closed with a Section 32, it cannot be reopened unless the insurance company agrees to do so, which is very unlikely. If you have a new injury on the job—even if it's to the same body part—you can always file a new claim for benefits. However, if years from now you unexpectedly need surgery because of the same injury, you’re on the hook to pay for it.
There are a lot of reasons why you might want to close your case with this type of settlement:
In my experience, Section 32 agreements are most often used in cases where the injured worker has been classified with a permanent partial disability and is entitled to a weekly award over a set period of time, which we call the “cap.” The resulting lump sum settlement includes a percentage of this total cap, which will vary depending on the details of your case.
The Section 32 agreement process starts with either you or the insurance company initiating the discussion. This can happen within days of filing your claim, months after you start receiving benefits, or not at all.
Each case is specific and its value is heavily dependent on the facts surrounding it. For cases involving a loss of wage-earning capacity due to a permanent partial disability, you can calculate the value of your benefits using the non-schedule chart on the New York Workers' Compensation Board website.
For instance, if the judge finds that you have a 75% loss of wage-earning capacity, then you're entitled to 75% of two-thirds of your average weekly wage, multiplied by the maximum number of weeks listed on the non-schedule chart. You also need to factor in the cost of future medical treatment and whether a Medicare Set Aside Account is required for those receiving or eligible for Medicare.
Once you’ve determined the value of your permanent partial disability and future medical costs, you can expect to settle that amount with a Section 32 agreement anywhere from 30% to 80% of the overall cap value. Most Section 32 agreements for permanent partial disability fall within that range.
For schedule loss of use awards, which compensate for the loss of use of certain body parts, there is a separate chart on the New York Workers' Compensation Board website. This chart lists the number of weeks each body part is worth.
Many people think that the longer they wait, the more their settlement will be worth. But in many cases, the opposite is true. If you have a 75% permanent disability and are entitled to 400 weeks of benefits, every week that passes reduces the overall value of your settlement.
Having an attorney is crucial because they know when to strike while the iron is hot, maximizing the value of your case. They understand the nuances of the settlement process and can help ensure you get the compensation you deserve.
If you or a loved one have been injured on the job in New York and would like to set up a free consultation with an experienced lawyer who will fight for what you deserve, give me a call at 212-406-8989.
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