What a workers’ comp settlement covers
Workers’ compensation pays medical care and part of your wages after a work injury, without proving the employer was at fault. A settlement closes some or all of those benefits in exchange for a lump sum. It usually reflects:
- Permanent partial disability (PPD): your impairment rating applied to a number of weeks set by your state for the body part or the whole person
- Temporary disability still owed: weekly benefits you would otherwise receive
- Future medical care: treatment your doctors expect, if the settlement closes medical benefits
How the weekly rate is set
Most states pay about two-thirds of your average weekly wage, up to a state maximum that changes each year. The rate drives every part of the settlement, so check your state agency’s current maximum and enter it.
Why settlements come in below full value
Insurers discount for disputes about the rating, the chance a judge awards less, and the time value of paying now. The calculator shows the full value and a 70% to 100% range. Your bargaining position depends on the evidence and your state’s rules.
Medicare and future medical money
If you receive Medicare or expect to soon, a settlement that closes future medical care may need a Medicare set-aside so Medicare does not pay costs the settlement covered.
Workers’ comp and an injury lawsuit
You generally cannot sue your employer, but you can bring an injury claim against a third party who caused the injury, such as a negligent driver or equipment maker. Read workers’ comp or a personal injury claim.
Questions people ask
How is a workers’ comp settlement calculated?
Usually from your weekly benefit rate, your impairment rating and your state’s schedule of weeks, plus remaining disability pay and future medical costs, then negotiated down for risk.
Is a workers’ comp settlement taxable?
Workers’ compensation benefits are generally not taxable under federal law.
Should I accept a workers’ comp settlement?
Compare it with the full value of your benefits, especially future medical care. Once medical benefits are closed, you pay for later treatment yourself.