Employers and their insurance providers often see workers’ compensation claims, and the process of making benefit payments, as an ongoing burden. For these parties, it is valuable and preferable if the situation is finalized swiftly and efficiently through a contractual arrangement with you, the injured employee.
Therefore, it is very likely that in the course of reporting your work-related injury and seeking workers’ compensation benefits (even if you haven’t filed a formal claim with the Department of Labor), your employer or an insurance provider has made an offer to settle. When this offer is extended, most likely it will come from the insurance company, you have two options under New Jersey law for settling your case.
Accepting a Lump Sum Settlement
The New Jersey Statutes Annotated (N.J.S.A.) 34:15-20 provides a mechanism for employers, through or with the insurance company, to make a one-time payment to an injured employee. Often, because of the citation for these one-off payments, those familiar with New Jersey workers’ compensation will call this form of settlement a Section 20 settlement.
Approximately 30% of workers’ compensation cases in the State of New Jersey are resolved through the Section 20 mechanism, but employees often enter the contractual agreement for these settlements without fully understanding the pros and cons of doing so. The upside of resolving a workers’ compensation situation through Section 20 is the lump sum becomes immediately available to the employee to use for past, present, and future medical costs. This can be incredibly attractive for …Read More