Workers’ compensation settlements are not all the same. In many cases, injured workers are offered a settlement that pays permanent disability benefits over time instead of a single lump sum, while also keeping medical benefits open for future care. Understanding how these agreements work—and what they are called in your state—can help you avoid giving up important rights.

If you were hurt on the job, you will eventually reach a point where your condition stabilizes. In legal terms, this is called Maximum Medical Improvement (MMI). At that stage, your doctor may assign a permanent disability rating, and the insurance company may offer to resolve your claim either through ongoing payments or a one-time lump sum. Knowing the difference is key to making the right decision for your future.

What Is a Workers’ Comp Settlement Paid Over Time?

A workers’ compensation settlement paid over time is an agreement where both sides accept key facts of the claim—such as the body parts injured, the level of permanent disability, and the worker’s average wages—and submit those terms for approval by a workers’ compensation judge or board.

Once approved, the agreement becomes legally binding, and the insurance company must pay benefits according to the schedule outlined in the settlement.

In California, this type of agreement is commonly called a “stipulated award.” Other states use different terms and structures, but the general concept is similar: payments are made over time, and medical benefits may remain available for the work-related injury.

Two features often define this type of resolution:

• Benefits are paid in installments rather than as a single lump sum
• Medical coverage for the work injury may remain open, depending on the agreement

This structure can be especially important if your injury may require future treatment, such as surgery, therapy, or long-term medication.

In some cases, these benefits may also be awarded by a judge after a hearing rather than negotiated as a settlement

What Different States Call This Agreement

The name and structure of these settlements vary by state. While the underlying idea—resolving permanent disability with payments over time and possible ongoing medical care—is similar, the legal terms and rules differ in important ways.

• New Jersey: A negotiated permanency award is approved under N.J.S.A. 34:15-22 (commonly called a "Section 22" order). Medical benefits remain available, and the case can be reopened if your condition worsens. Although not called a “stipulated award,” this type of order serves a similar function by awarding permanency benefits while generally keeping medical benefits open.
• New York: Permanency is most often resolved through a Schedule Loss of Use (SLU) award for extremity injuries or a classification for non-schedule injuries, with payments made on a regular schedule. A Section 32 waiver agreement, by contrast, fully and finally closes the claim.
• Pennsylvania: Pennsylvania allows full and final settlements through a Compromise & Release Agreement (C&R) under Section 449 of the Workers’ Compensation Act. In some cases, parties may agree to resolve only the wage-loss portion of the claim while leaving medical benefits open, though these partial agreements are less common and must be clearly defined and approved.
• Connecticut: A Voluntary Agreement under CGS § 31-296 sets the disability rating and benefit payments while keeping the claim open. A full and final Stipulation closes the case entirely.
• Massachusetts: In Massachusetts, claims are typically resolved through administrative orders or agreements under M.G.L. c. 152, with benefits paid under §§ 34, 34A, 35, or 36 depending on the type of injury and level of incapacity. A lump-sum agreement under § 48 generally closes the case, although there is a limited path to pursue future medical benefits under specific circumstances.

If you are not sure which structure your offer falls under, ask. The wrong form can mean giving up medical coverage you did not realize you were giving up.

How the Process Usually Works

The settlement process generally starts after your treating physician — or an independent medical examiner — issues a final report assigning a permanent disability rating. Your attorney reviews the rating against your medical records and your state's permanency schedule to make sure it is accurate.

If the rating and the proposed benefit amount are acceptable, the agreement is drafted, signed, and submitted to the workers' compensation board or judge in your state. The judge's job is to confirm the terms are fair and that you understand what you are agreeing to. Once approved, the insurance carrier must begin payments within a timeframe set by state law, often around 30 days after approval.

Key Terms in the Agreement

Before you sign anything, the document should clearly state:

• The injured body parts covered by the agreement
• The permanent disability rating
• The total benefit amount
• The payment schedule (weekly, biweekly, or otherwise) and total number of weeks
• Whether and how medical benefits remain open
• The conditions, if any, under which the case can be reopened

If any of those items are missing or vague, that is a problem. Insurance carriers draft these agreements; they will not catch ambiguities that work against you.

Settlement Paid Over Time vs. Lump Sum: What’s the Difference?

This is the question that matters most. The answer determines whether your case stays open or closes for good.

Accepting an agreement with payments over time generally keeps medical benefits open for the listed injuries. If your back gets worse and needs surgery five years from now, the carrier may still be on the hook.

A full and final lump-sum settlement pays a single amount up front and ends the claim. The forms vary by state — Section 20 in New Jersey, Section 32 in New York, Compromise & Release in Pennsylvania, full and final Stipulation in Connecticut, lump-sum agreement under § 48 in Massachusetts — but the result is the same: the carrier writes one check and walks away. Future medical bills tied to the injury are yours. For a sense of the dollar ranges typical workers' comp settlements fall into, see our breakdown of average workers' comp settlement amounts.

Neither option is universally better. A lump sum makes sense when you need the money now, when you have other health coverage, or when your medical prognosis is stable. Payments over time make sense when your injury is likely to need ongoing care, when you do not have reliable health insurance, or when you are not certain how your condition will evolve.

How Are Payments Calculated and Made?

With this structure, your permanent disability is paid in periodic installments — usually weekly or every two weeks. The amount of each check is a percentage of your average weekly wage from before the injury, capped by your state's maximum compensation rate.

The number of weeks of payments depends on your state's permanency schedule, the body part injured, and the disability rating. For example, New Jersey's schedule sets a number of weeks for unscheduled (non-extremity) injuries based on a percentage of partial total disability, while New York uses a fixed number of weeks for each scheduled body part. Pennsylvania, Connecticut, and Massachusetts each have their own formulas.

Because the math varies so much by state and injury type, generic week-and-percentage examples can mislead you. Ask your attorney to walk you through the specific calculation for your case so you know exactly how much you will receive and for how long.

Do You Still Get Medical Benefits With a Settlement Paid Over Time?

In most cases, yes — medical benefits often remain available after this type of settlement, though the exact scope depends on the agreement and state law. Keeping medical benefits open means the insurance carrier remains responsible for treatment related to the work injury, including:

• Follow-up doctor visits
• Physical therapy
• Future surgeries tied to the original injury
• Prescription medication
• Diagnostic imaging

The exact scope of "open" medical varies. Some agreements list specific body parts and conditions covered; some carve out exclusions; some require the worker to use authorized providers. Read the medical-benefits section of the agreement carefully, and ask about pre-authorization requirements, provider networks, and what happens if the carrier denies a future treatment request. If a carrier later denies a related claim, you have options to challenge that decision.

Can You Reopen the Case If You Get Worse?

Sometimes, but the rules are strict and they vary by state. A few examples from the states where our firm practices:

• New Jersey: Under N.J.S.A. 34:15-27, you generally have two years from the date of your last workers' compensation payment to file a formal application to modify or increase a permanency award. The clock can run from the last medical or indemnity payment, depending on the circumstances.
• New York: Reopening a workers’ compensation case depends on several factors, including the type of disability classification and how much time has passed since the last payment of benefits. Certain claims may be subject to strict limits, especially if the case is considered fully closed.
• Pennsylvania: A Petition for Modification or Reinstatement under the Workers' Compensation Act must generally be filed within three years of the most recent payment of compensation.
• Connecticut: Under CGS § 31-315, an award can be modified when there is a change in the worker's condition, with no fixed years-from-injury deadline but procedural requirements that demand prompt action.
• Massachusetts: Modification under M.G.L. c. 152 § 8 is available based on changed circumstances. A § 48 lump-sum agreement is generally final, with a narrow exception in § 48(4) allowing a medical-benefits-only claim within one year of becoming aware of a substantial deterioration that could not reasonably have been foreseen.

If your condition is getting worse and you think you may need to reopen, do not wait. Missing a deadline ends the right to additional benefits even if the medical evidence is overwhelmingly in your favor.

Should You Accept Workers' Comp Payments Over Time? Things to Weigh

A few questions to think through before signing:

• Is the disability rating consistent with your medical records and your treating doctor's opinion?
• Does your state's schedule support the number of weeks the carrier is offering?
• Are all of your injured body parts listed?
• What does the medical-benefits section say, exactly?
• Can the case be reopened, and under what conditions?
• Do you have other health insurance that would cover related future care if you took a lump sum instead?
• What is your attorney's read on whether the offer is at, below, or above the realistic value of your case?

You do not have to accept the first offer. Counter-offers are a normal part of the process, and an experienced workers' compensation lawyer can tell you whether the carrier's number reflects the actual value of your case.

Key Takeaways: Workers' Comp Awards Paid Over Time

• Some workers’ comp settlements pay benefits over time instead of a lump sum
• These agreements may allow you to keep medical benefits open for future care
• The terminology and rules vary significantly by state
• Accepting the wrong type of settlement could limit your future benefits
• Payments over time are typically based on state formulas, not negotiated freely like lump sums

Frequently Asked Questions

How long do payments over time last?

Payments continue for a set number of weeks calculated from your disability rating, the affected body part, and your state's permanency schedule. The number can range from a few weeks for a minor scheduled injury to several years' worth of weekly payments for a severe non-scheduled injury. Your attorney can calculate the specific number for your case.

Do I need a lawyer to settle a workers' compensation claim?

You are not legally required to have one in any state, but insurance carriers negotiate these agreements every day and you most likely do not. An attorney can verify the rating is accurate, push back on lowball offers, and make sure the medical-benefits language actually protects you. In most workers' compensation cases, the attorney's fee is a percentage of the recovery and capped by state law.

What happens if the insurance company stops paying?

If a carrier misses payments under an approved agreement, you can file a motion or penalty claim with your state's workers' compensation board. Most states impose interest, late fees, or penalty assessments on missed payments. Document the missed payments and contact your attorney quickly. Separately, if your employer does not have workers' compensation insurance at all, different rules apply and you may have additional remedies.

Can I work while receiving payments?

In most states, yes — permanent partial disability payments are not contingent on being out of work. The rules differ for permanent total disability and for some classification cases in New York. Confirm with your attorney before returning to work, especially if you are receiving any temporary or total benefits alongside permanency. Note also that some injuries are not covered by workers' comp at all, which can affect what you are able to settle.

Call Brandon J. Broderick For Legal Help

Workers' compensation settlements are not one-size-fits-all, and the wrong agreement can cost you years of medical coverage or thousands of dollars in unpaid benefits. Insurance carriers know the rules in each state. They know exactly what the case is worth to them. You deserve someone on your side who knows the same.

Our team handles workers' compensation cases across New Jersey, New York, Pennsylvania, Connecticut, and Massachusetts. We review settlement offers line by line, check the disability rating against the medical evidence, and make sure the medical-benefits language protects your future care. If the carrier's offer is too low, we negotiate. If they refuse to move, we are ready to take the case to a hearing.

If you have a settlement offer in front of you, or you are not sure whether to accept one, contact us for a free consultation. We will tell you what your case is worth and what the agreement actually says — before you sign anything.