Under New Jersey’s Workers’ Compensation Act, there are two types of settlements that an injured worker can enter into with their employer and the insurance company. These settlements are referred to Section 20 and Section 22 settlements, based on the section of the Act that authorizes each one.
Section 20 settlements result in a lump sum payment. By contrast, with a Section 22 settlement, an injured worker will continue to receive benefits. In addition, an injured worker can reopen their workers’ compensation claim in the future if their condition worsens.
There are advantages and disadvantages to each type of settlement. A skilled New Jersey workers’ compensation settlement attorney can help you get the benefits that you are entitled to based on your specific situation.
What Is A Workers’ Compensation Settlement?
Under New Jersey law, employees who are injured at work or who develop an occupational illness can receive benefits through the workers’ compensation system. Depending on the nature and extent of the illness or injury, these benefits may include medical treatments, temporary disability payments, and/or permanent disability payments. Loved ones of a worker who died due to a work injury may also be entitled to certain death benefits.
If you are hurt at work, your employer may simply agree to pay you the benefits that you are due. However, if there is a dispute over whether you are entitled to benefits, the amount that you are owed, or any other aspect of your claim, you may need to file a formal claim with the New Jersey Division of Workers’ Compensation (DWC).
If you file a claim, then your case will be scheduled for a hearing before a judge of compensation. While you are waiting for your hearing, your attorney will likely negotiate with your employer’s insurance company to attempt to reach a settlement. If you don’t achieve a settlement, then your case will go to a hearing, and the judge will make a decision on your benefits.
There are a number of advantages to settling your workers’ compensation claim. A settlement allows you to avoid the lengthy and sometimes complicated hearing procedure. In addition, settling your case is a more certain way to resolve your case.
A workers’ comp settlement requires you to give up certain benefits in exchange for an amount of money that you agree upon with the insurance company. This money may be paid in a lump sum, or over time. In New Jersey, there are two kinds of settlements available (Section 20 and Section 22), each of which must be reviewed and approved by the DWC before it can be finalized.
Section 20: Lump Sum Settlements
Section 20 settlements are available to injured workers whose employers deny their workers’ compensation claim or dispute some part of the claim. They are not available in cases where the insurance company accepts a claim.
A Section 20 settlement is a full and final settlement of your claim. Any money that you receive based on this type of settlement will be paid out as a lump sum. The employer does not admit to any liability as part of the settlement.
When you agree to a Section 20 settlement, you are giving up your right to all future workers’ compensation benefits, including any future medical care. If your condition worsens, you cannot reopen your case or file a claim.
Employers prefer Section 20 settlements because they are full and final, which means that they won’t be on the hook for additional payments or medical treatment in the future. For employees, Section 20 settlements are less favorable, particularly because they foreclose the possibility of seeking more money or medical care if something about their situation changes. If your employer is disputing liability and you are concerned that you may not get a favorable result at a hearing, then you may choose to enter into this type of settlement.
Section 22: Lifetime Benefits
Any workers’ compensation claim can be settled through a Section 22 agreement, not just disputed or denied claims. Through this type of settlement, the injured worker and the employer/insurance company agree to a permanent disability rating. This disability rating is assigned by your treating physician. The insurance company then agrees to pay out disability benefits in installments, based on the New Jersey workers’ compensation schedule of benefits.
With a Section 22 settlement, an injured worker does not give up their right to future medical care. If your conditions worsen after you agree to a Section 22 settlement, you can reopen your claim and request additional disability benefits. Importantly, you must do so within two years of the last payment, in accordance with the New Jersey workers’ compensation statute of limitations.
Section 22 settlements are far more favorable to employees, particularly because they give you the right to file a claim in the future if you become more disabled from your work injury or occupational illness. If you have an injury or illness that will likely require long-term medical treatment, then a Section 22 settlement is probably your best option. However, there are many factors that can balance this. If your employer disputes the claim you may favor the certainty of a Section 20 settlement over the risks of going to trial to try to get these benefits.
It’s important to know that these benefits are paid for the number of weeks set by the statute. They are rarely, with the exception of total permanent disability, benefits that will actually last a “lifetime.”
How We Can Help
If you have been hurt at work or diagnosed with an occupational illness, you may be overwhelmed by the thought of taking on your employer and their insurer to get the benefits that you are entitled to under the law. At Bross & Frankel, we know how difficult this process can be, particularly when you are sick or injured. We’re here to help.
Our team of New Jersey workers’ compensation settlement lawyers has significant experience helping injured workers throughout the state get a settlement that meets their needs. To learn more or to schedule a free initial consultation, contact us today at 856-765-8880 or fill out our online contact form.