Throughout our series on Workers' Compensation, we've answered questions about the history of the WC program in South Carolina, the differences between total and partial disability, occupational diseases or health conditions not usually considered "injuries", and how claims are filed and decisions may be made. In our final post in this series, we're going to take a look at the one topic we haven't yet touched — settlements. The two primary methods of settlement are a Form 16 or what is known as a "clincher agreement."
What's a Form 16?
Generally, a Form 16 is a form issued by the Workers' Compensation Commission and is used to establish compensation payable for a specific disability or impairment and the scope of future medical benefits, with or without a hearing. If a claim is resolved on a Form 16, the employee retains the right to additional compensation if there is a change of condition within 12 months of the date of their last compensation payment. Also included is the employer's ongoing responsibility to provide causally-related medical treatment that tends to lessen the period of disability for the employee (Dodge v. Bruccoli, Clark, Layman, Inc. (1999)). The parameters of a settlement on a Form 16 are the same as if a claim is decided by a Commissioner at the S.C. Workers' Compensation Commission.
What is a Clincher Agreement?
A clincher is also known as an "Agreement and Final Release". It functions similarly to a release in a personal injury claim. A clincher is not considered binding on the parties involved until it undergoes approval by the Workers' Compensation Commission if the employee chooses not to be represented by an attorney or if the clincher involves injuries sustained prior to July 1, 2007 (for more information on the importance of that date,read our earlier blog post about changes in the WCC). To clincher a claim means the Claimant fully, finally, and forever, resolves the workers' compensation claim. This means the Claimant gives up the right to future medical treatment and the right to re-open the claim on a change of condition. Because the Claimant gives up these two very important rights, claims resolved on a clincher are generally resolved for more money than the amount paid on claims resolved on a Form 16.
If the clincher involves injuried sustained after July 1, 2007 and both parties are represented by an attorney, the clincher must be filed with the Commission but doesn't need to undergo approval before it is considered binding.
The greatest disadvantage to using a clincher agreement? The employee loses his or her right to future compensation if they sustain a change of condition and future medical treatment. These agreements must be worded and read very carefully, since all facts of the agreement become settled factual findings that will be incorporated into the final decree.
So... Which Should an Injured Employee Choose?
That will really depend on the facts of an employee's unique situation. When evaluating which option would be the right choice, the way that the results might affect Social Security Disability benefits, Medicare, any future medical benefits needs, and even whether or not a change of condition is likely in the future would all need to be given consideration.
What if I'm on Medicare
If a Claimant is a Medicare beneficiary, or has a reasonable expectation of receiving Medicare benefits within 30 months, special consideration must be given to the interests of Medicare when resolving a workers' compensation claim. These special considerations can be triggered even if a Claimant has an open application for Social Security Disability benefits.
If Medicare becomes involved or engaged in the case, their interests must also be given consideration in claims that conclude that the medical treatment in a WC case and a Medicare Set-Aside Trust (MSA) may be necessary. You can learn more abut Medicare Set-Aside Trusts here.
In a case where Medicare is not engaged, but is expected to become so, the interests of Medicare must be kept in mind while settling the case. Medicare may audit in the future and refuse payments for medical treatments for the Claimant if they find that said payments should have been the responsibility of the insurance company handling the Workers' Compensation.
If a Claimant makes a claim for workers' compensation benefits which is denied by the workers' compensation employer or insurance company, Medicare may make a "conditional payment" for medical treatment. If a Claimant later gets a settlement, Medicare may have a claim against the settlement funds for the amount of the conditional payment Medicare made related to treatment for injuries related to the workers' compensation claim. In this case, Medicare may attempt to recovery from the employer, the carrier of the Workers' Compensation insurance, the Claimant beneficiary, and/or the claimant's attorney.
Workers' Compensation Settlements Can Be Complex.
Because of the complexities that may arise concerning resolution of claims or coordination of benefits, we advise an employee who has become injured or ill as a result of workplace conditions or incidents to immediately speak to someone about protecting their individual rights. We hope that our series on Workers' Compensation has helped you feel more prepared in case these facts should become relevant to you in the future. At Bluestein Attorneys we have years of experience and dedication and it's our mission to help you protect your rights. You can reach us by phone at (803) 779-7599 or schedule your FREE consultation just by clicking the banner below.