Workers’ Compensation Structured Settlements

Workers’ Compensation Structured Settlements

Workers’ compensation benefits are paid to an employee, by their employer, if they suffer from an injury or ailment contracted on the job. This system helps cover medical treatments and the loss of wages during the period of time an employee cannot work. If the employee is unable to work again due to the severity of the injury, workers’ compensation can help provide financial security over the course of their lifetime. 

The Benefits Associated with Structured Settlements for Workers’ Compensation 

Workers’ comp structured settlements have been encouraged by the federal government since legislation passed in 1983. Such an arrangement is typically in the best interest of all parties involved. Despite this, only about one-third of claimants opt for a structured settlement over the lump sum payment, according to the National Structured Settlements Trade Association. Establishing a structured settlement plan for work-related injury claims offers more benefits than receiving a lump sum payment. 

Long-Term Financial Security and Stability 

The greatest benefit to establishing a workers’ compensation structured settlement is that it allows greater financial security in the long run. This is because, regardless of a lump sum settlement’s size, the claimant’s ongoing costs may quickly eat up that sum. Depending on the personal injury, claimants may require future surgery, medical treatment, and medical equipment. One also cannot discount the fact that the claimant may not be able to find meaningful employment again, depending on the injury’s severity. 

The Employer Benefits and Claims Close Rapidly 

When a structured settlement is agreed upon, the employer can pay an annuity provider to handle the long-term payments. This allows the employer to treat the payment as if it were a lump sum for tax deduction purposes. 

Decreased Burden on the State 

With a long-term financial plan in place, claimants likely will not run through their funds as rapidly, and they less likely will need to turn to Medicare, Medicaid, or other public assistance programs. A structured settlement can also be utilized to fund a worker’s compensation Medicare set-aside account. 

Our workers’ compensation structured settlement planners have experience with establishing settlement plans that maximize benefits to the claimant. We take the time to listen and devise a plan of action that truly speaks to the client’s present and future needs. If you require assistance from a professional team of settlement consultants, Milestone Consulting can answer the call.