An Ohio workers’ compensation settlement can provide financial certainty and bring part or all of a claim to an end. However, accepting a settlement may also mean giving up the right to seek future compensation or payment for injury-related medical care.

Ohio allows settlements to cover one or more claims, particular benefits, or certain parts of a claim. For example, an indemnity-only settlement can resolve compensation benefits while leaving the worker’s right to request covered treatment open. The exact consequences therefore depend on the language of the agreement.

Before accepting a lump sum workers’ comp settlement in Ohio, it is important to consider your prognosis, possible future treatment, remaining eligibility for compensation, financial needs, and the settlement’s effect on Medicare or Social Security Disability Insurance benefits.

Key Takeaways: Accepting a Lump Sum Workers’ Comp Settlement in Ohio

• A settlement can resolve all or part of a claim: Ohio permits settlements involving one or more claims, portions of a claim, compensation, medical benefits, or a combination of these rights.
• A full settlement generally ends future benefits: Once a full settlement becomes final, the worker ordinarily cannot obtain additional workers’ compensation benefits for the matters covered by the agreement.
• Medical benefits may remain open: An indemnity-only settlement can resolve compensation benefits while leaving the worker’s right to request covered treatment open for the claim’s allowed conditions.
• Ohio has a 30-day waiting period: The starting point differs between state-fund and self-insured settlements, but the parties generally have 30 days to withdraw consent before the agreement becomes final.
• Other benefits may be affected: A settlement can affect Medicare payment responsibilities and Social Security Disability Insurance offset calculations.

What Is a Lump Sum Workers’ Comp Settlement?

A lump sum settlement is an agreement under which an injured worker receives an agreed payment in exchange for resolving the workers’ compensation claims, benefits, or portions of a claim identified in the agreement.

Under Ohio Revised Code Section 4123.65, a settlement may cover one or more claims, one or more parts of a claim, compensation or medical benefits associated with those claims, or a combination of these matters. A worker is not required to settle every workers’ compensation claim they have filed.

Two important settlement structures are:

• Full settlement: Generally resolves the medical and compensation rights included in the agreement. The worker generally becomes responsible for future treatment costs, and no additional compensation will be available for the matters covered by the settlement.
• Indemnity-only settlement: Resolves compensation benefits, such as certain wage-replacement payments, while leaving the worker’s right to request payment for covered treatment open. The treatment must still satisfy the usual requirements for the claim’s allowed conditions.

The settlement document should clearly identify the claim numbers and benefits being resolved. A worker should not assume that the right to request medical coverage will remain open unless the agreement specifically provides for it.

How Does the Ohio Workers’ Comp Settlement Process Work?

The process depends partly on whether the employer participates in Ohio’s state insurance fund or administers claims as a self-insured employer.

For a state-fund claim, the worker or employer generally begins the process by submitting the Settlement Agreement and Application for Approval of Settlement Agreement, Form C-240, to the Ohio Bureau of Workers’ Compensation. Self-insured claims use a different settlement agreement.

Employer consent is ordinarily part of a state-fund settlement, but Ohio law recognizes limited exceptions. For example, the employer may be unable to block the settlement when the claim is no longer within its experience period and the worker is no longer employed there. An employer’s signature may also be unnecessary in certain other situations established by law.

For a state-fund claim, BWC evaluates the proposed settlement and determines whether to approve it. In a self-insured claim, the worker and self-insured employer execute the settlement agreement directly, and the employer must send a copy to BWC.

The agreement is also sent to the Industrial Commission of Ohio and assigned to a staff hearing officer. During the statutory review period, the hearing officer may disapprove a clearly unfair settlement that would constitute a gross miscarriage of justice.

What Are the Benefits of Accepting a Lump Sum Settlement?

The potential advantages depend on the worker’s medical condition, the benefits involved, and the scope of the proposed agreement.

Greater Financial Certainty

A settlement establishes an agreed amount rather than leaving future payments dependent on continuing eligibility, medical evidence, and possible disputes. This can make it easier to plan for household expenses, debt, education, retraining, or other long-term needs.

The payment is not necessarily immediate, however. The agreement must complete the applicable approval and review process before it becomes final.

Fewer Continuing Benefit Disputes

Some benefits require continuing medical support. For example, a worker receiving temporary total disability compensation may need updated medical documentation and may be asked to attend an examination.

Settling the applicable compensation rights can end those ongoing eligibility disputes. The tradeoff is that the worker also gives up the right to request the settled benefits later.

Control Over the Settlement Funds

After permitted deductions, the worker can generally decide how to use the settlement proceeds. However, money allocated to a Medicare set-aside must be administered and spent in accordance with the applicable Medicare requirements.

Some people place part of their unrestricted proceeds in a separate account for future medical or living expenses. Careful planning is important because a lump sum may need to cover costs that otherwise could have been paid over a much longer period. A financial professional may be able to help the worker develop a realistic spending plan.

An End to the Administrative Claim Process

A full settlement can provide finality by ending the worker’s need to continue seeking authorization or litigating eligibility for the settled benefits.

If medical rights are included, the worker will no longer need workers’ compensation authorization for later care. However, the Ohio Bureau of Workers’ Compensation or self-insured employer will also no longer pay for that care. The worker may need to use the settlement proceeds or another available source of coverage.

What Are the Risks of Accepting a Lump Sum Settlement?

The most significant risk is that a settlement can become inadequate if the worker’s medical or financial needs turn out to be greater than expected.

Losing Future Medical Coverage

When a settlement includes medical rights, injury-related treatment received after the settlement’s effective date generally becomes the worker’s responsibility. This can include:

• Surgery
• Physical therapy
• Specialist appointments
• Prescription medication
• Medical equipment
• Treatment for a later worsening of an allowed condition

Medicare may decline to pay injury-related expenses until properly allocated settlement funds have been exhausted. Whether private health insurance will cover later treatment depends on the terms of the worker’s health plan. Before settling medical rights, the worker should understand the likely cost and duration of future care.

Giving Up Future Compensation

A full settlement may also end eligibility for future wage-replacement or disability compensation associated with the settled claim. If the worker’s ability to work declines later, additional workers’ compensation benefits generally will not be available for matters that were fully resolved.

Underestimating Long-Term Needs

It can be difficult to predict whether an injury will require additional treatment several years later. A settlement may be risky when the worker’s prognosis is uncertain or a doctor anticipates surgery, long-term medication, or continuing rehabilitation.

Reaching maximum medical improvement may help clarify the worker’s prognosis, but it does not automatically mean that settlement is advisable or that a particular offer is sufficient. A person at maximum medical improvement may still require supportive treatment.

Spending the Settlement Too Quickly

A single payment can be depleted faster than expected, especially when it must cover both living expenses and future medical care. Once a full settlement is final, spending the money does not restore the benefits that were released.

How Can a Settlement Affect Medicare and SSDI?

Federal benefit considerations should be reviewed before the settlement is signed.

If Medicare is involved or may become involved, the parties must consider Medicare’s interests when resolving future medical expenses. Depending on the circumstances, a portion of the settlement may be allocated to a Workers’ Compensation Medicare Set-Aside Arrangement.

A Medicare set-aside is used to pay future injury-related expenses that Medicare would otherwise cover. Submission of a proposed set-aside to the Centers for Medicare & Medicaid Services is voluntary, but CMS recommends its review process for settlements that meet the agency’s thresholds.

A settlement may also affect Social Security Disability Insurance. The Social Security Administration generally prorates a qualifying workers’ compensation lump sum when calculating an SSDI offset. The calculation can depend on the settlement’s terms, the worker’s previous compensation rate, allowable expenses, and specialized Ohio provisions that apply in some permanent-total-disability cases.

The agreement’s wording can affect the calculation, but no particular drafting technique guarantees that SSDI benefits will avoid or receive a smaller offset. Anyone receiving or applying for SSDI should have the potential effect evaluated before signing.

What Should You Review Before Accepting a Settlement?

Before accepting an offer, review more than the gross settlement amount. Important questions include:

• Which claims and allowed conditions are included?
• Are both compensation and medical benefits being settled?
• Will the right to request medical coverage remain open?
• What treatment does your doctor expect you to need?
• Could your condition prevent you from working in the future?
• What benefits might remain available if you do not settle?
• Are attorney fees, overpayments, child support, or other valid deductions involved?
• Could the settlement affect Medicare or SSDI?
• How long will the net proceeds realistically last?

Ohio does not use a standard settlement-value table that guarantees a particular amount for a particular injury. The value depends on the benefits that may remain payable, the medical evidence, disputed claim issues, future treatment exposure, and the likelihood that compensation would continue.

The Industrial Commission’s review provides a limited safeguard against a clearly unfair agreement that would constitute a gross miscarriage of justice. It does not guarantee that the settlement represents the full potential value of the claim.

Can You Negotiate an Ohio Workers’ Comp Settlement?

A worker does not have to accept a proposed settlement amount. An offer may be accepted, rejected, or used as the starting point for further negotiations.

In a state-fund claim, BWC evaluates the claim and may participate in the negotiations. In a self-insured claim, negotiations generally involve the worker and the self-insured employer or its representative.

Evidence that may affect the negotiations includes:

• Current medical records
• A doctor’s opinion concerning future treatment
• Work restrictions
• Prior compensation payments
• Pending requests for additional benefits
• Evidence concerning the worker’s ability to return to employment
• Expected prescription, rehabilitation, or medical-equipment costs

The settlement amount should be evaluated against the compensation and medical benefits that could remain available—not against an expectation that workers’ compensation will replace every dollar of future lost wages.

How Long Is the Ohio Settlement Waiting Period?

An Ohio workers’ compensation settlement generally does not take effect until a 30-day waiting period expires.

For a state-fund settlement, the period begins after the BWC administrator approves the agreement. For a self-insured settlement, it begins after the self-insured employer and worker sign the final agreement.

During that period, the authorized parties may withdraw consent by providing the required written notice. The Industrial Commission staff hearing officer may also disapprove the agreement under the narrow statutory standard.

Once the period expires without a valid withdrawal or disapproval, the agreement becomes final and cannot ordinarily be appealed. The settlement payment is generally issued after finalization, but the precise timing and payment method can vary between state-fund and self-insured claims.

Can You Work After Accepting a Settlement?

A worker generally may return to employment after a settlement. However, the effect of working depends on what the agreement resolved.

If all compensation rights were settled, future employment ordinarily will not undo the final agreement. If certain compensation benefits remain open, working and earning wages may affect continued eligibility for those benefits.

Employment obtained after a final settlement ordinarily does not require repayment of the settlement proceeds. However, inaccurate or concealed information about employment during the settlement process can create fraud or overpayment issues. For more information, read about working while receiving Ohio workers’ compensation benefits.

How Can an Ohio Workers’ Compensation Lawyer Help?

A workers’ compensation attorney can review the proposed agreement and explain precisely which rights would remain open and which would end. An attorney may also:

• Evaluate the compensation and medical benefits that could remain available
• Review medical evidence and anticipated treatment
• Estimate how future medical expenses may affect settlement value
• Negotiate with BWC or a self-insured employer
• Identify possible Medicare or SSDI issues
• Explain the settlement’s release language
• Help complete and submit the appropriate settlement documents

Ohio workers’ compensation does not provide personal injury damages such as pain and suffering. A lawyer therefore focuses on the compensation and medical benefits available through the workers’ compensation system and whether the proposed settlement reasonably accounts for the rights being released.

Need Legal Help? Brandon J. Broderick, Attorney at Law, Is Here for You

At Brandon J. Broderick, Attorney at Law, we believe everyone deserves experienced legal representation, regardless of their financial situation or the complexity of their case. You do not have to make an important settlement decision without understanding how it could affect your health, finances, and future benefits.

Our team is available to listen to your story, review your Ohio workers’ compensation claim, and explain your available options. Before you agree to give up medical or compensation rights, take the time to understand exactly what the settlement includes. Contact us today for a free, no-obligation legal consultation.