Which Workers' Comp Settlement Is Right For YOU?

Choosing the right workers’ comp settlement isn’t just about the immediate payout—it’s about your long-term well-being. In this guide, we’ll break down the different settlement types to help you make an informed decision that aligns with both your financial needs and future medical care.

Types of Workers’ Compensation Settlements

When it comes to settling a workers’ comp case, there’s no one-size-fits-all answer. Different types of settlements are tailored to meet different needs—whether you’re looking for financial compensation, keeping your medical benefits open, or ironing out specific disputes.

Here’s a quick breakdown of the three main types of workers’ comp settlements:

• Stipulated Agreements – These are flexible and often quick, making them a great option for resolving specific issues or even wrapping up an entire case.
• Section 32 Settlements – This is the more permanent route. It usually comes with a bigger payout but closes the case for good, meaning you can’t reopen it down the line.
• Indemnity-Only Settlements – This is a middle-ground option that gives you financial compensation while still keeping your medical benefits available.

Each type of settlement has its place and purpose, but the goal is the same: to find a resolution that works for everyone. The trick is figuring out which option makes the most sense for your situation.

Stipulated Agreements

Stipulated agreements are like the Swiss Army knife of workers’ comp settlements—flexible, efficient, and usually the fastest way to resolve disputes. At its core, a stipulated agreement is exactly what it sounds like: an agreement between you and the insurance company to settle one or more parts of your case.

Here’s how they work: A stipulated agreement is often used to settle specific disputes, like:

• Average Weekly Wage: If your income varies—say, you’re an Uber or Lyft driver—figuring out your average earnings can be tricky. A stipulated agreement lets you and the insurance company meet somewhere in the middle.
• Schedule Loss of Use: If their doctor says one thing about your permanent injury and your doctor says another, you can use a stipulated agreement to settle on a percentage that works for both sides.

The best part? Stipulated agreements are super flexible. You can use one to sort out a single issue, like weekly wages, or to settle your entire case if everyone’s on board. Plus, unlike Section 32 settlements, a stipulated agreement usually gives you the option to reopen your case later if new issues come up.

For example, let’s say you hurt your shoulder and might need surgery in the future. You can settle your compensation now with a stipulated agreement and keep the option to reopen your case down the road if you end up needing that surgery.

The process is pretty simple: both parties fill out a form with the terms of the agreement and send it to the Workers’ Compensation Board for approval. This streamlined approach makes stipulated agreements quicker and easier than most other types of settlements.

Section 32 Settlements

Section 32 settlements are like the heavyweight champ of workers’ comp settlements—they’re big, final, and take care of everything all at once. With a Section 32, you agree to close your case completely in exchange for a lump sum payment. It gives you financial certainty but also means you can’t reopen your claim later, no matter what happens.

Here’s the deal: A Section 32 settlement resolves your entire workers’ comp case. That includes:

• Indemnity (Money): Payments you’d get for lost wages.
• Medical Benefits: Coverage for any future care related to your injury.

You, your lawyer (if you have one), and the insurance company negotiate the terms. Once you all agree, it goes to a workers’ comp judge for approval. The judge isn’t there to make sure you got the best deal—just to confirm the settlement is fair and not outrageously one-sided.

Section 32 settlements have their perks, but they also come with some important things to keep in mind:

• No Reopening: Once it’s done, it’s done. If your injury gets worse or new medical issues pop up, you’re on your own—there’s no going back for more compensation.
• Takes Time: It’s not a quick process. Between negotiating, paperwork, and getting it approved by the Workers’ Compensation Board, it can take weeks or even months.
• Bigger Payouts: Since you’re giving up all future rights, Section 32 settlements often come with higher payouts than other settlement types.

If you’re ready to wrap up your case for good and feel confident you won’t need future medical care covered, a Section 32 can be a great option. Just make sure you’re clear on the trade-offs before you commit.

Indemnity-Only Settlements

An indemnity-only settlement is a great middle-ground option if you want to get financial compensation now but still keep your medical benefits open. Unlike a Section 32 settlement, which closes your case completely, an indemnity-only deal focuses just on the money side of things while leaving room for future medical treatment through workers’ comp.

Here’s how it works: You get a lump sum payment to cover lost wages (that’s the indemnity part), but your medical benefits stay active. This type of settlement makes sense in situations like these:

• High Future Medical Costs: If you know you’ll need expensive medical care down the road—like surgeries or long-term treatment—this lets you secure financial compensation now while workers’ comp continues to handle your medical bills.
• Medicare Set-Asides (MSAs): When Medicare’s involved, they often require a set-aside fund to cover future medical expenses. If that amount is sky-high and eats up most of your settlement, keeping medical benefits open might be the better option.
• Personal Preference: Some people just feel better knowing they can still access workers’ comp for future medical needs instead of having to pay out-of-pocket.

Indemnity-only settlements give you the best of both worlds: immediate financial relief and the peace of mind that your medical coverage is still there if you need it. It’s a smart option for certain cases, especially when future medical costs are a big concern.

Should I Reach a Settlement Prior to Having Surgery While on WC?

It’s usually not a great idea to settle your workers’ comp case before you’ve had surgery. Here’s why:

Even with routine surgeries—like fixing a knee, shoulder, or herniated disc—there’s always a chance something unexpected could happen. Most surgeries go fine, but complications like infections (think MRSA) can come out of nowhere. If you’ve already settled and something goes wrong, you’re stuck handling extra medical costs or more time out of work on your own since you can’t go back and ask for more compensation.

When you settle before surgery, you’re making a deal without knowing how things will turn out. It’s usually smarter to wait until:

• You’ve had the surgery.
• Finished your recovery and any follow-up care.
• Reached a point where your doctor says your condition has leveled off (this is called “plateauing”).

Waiting gives you a much better idea of what your long-term medical needs look like and what your case is really worth.

That said, there can be exceptions. If your surgery is something minor and your recovery is expected to be simple, settling might make sense—especially if it’s an indemnity-only deal that keeps your medical benefits open. But it’s important to talk it through with your doctor and a workers’ comp attorney who can help you weigh the risks and benefits.

Contact Us For Help With Your Workers' Compensation Case

I’ve helped countless people in situations just like yours navigate their cases, make informed decisions, and get the outcomes they deserve. Whether you have questions, need advice, or just want to talk through your options, I’m here to help.

Give me, Rex Zachofsky, a call at 212-406-8989, and let’s talk about what’s going on with your case. There’s no pressure—just a chance to get some clarity and figure out the best steps for you. I look forward to hearing from you!