Workers Compensation Settlements & Public Policy

Very often, injured workers decide to enter a workers compensation settlement rather than go to a Utah Labor Commission hearing with a judge. Settling a case means the injured worker and the insurance company sign a settlement agreement which is not binding until approved by a Labor Commission judge under UAC Rule 602-6-3. The judge will review the agreement to make sure it is fair and does not inappropriately foist the costs of your industrial injury onto your private health insurance or Medicaid or Medicare.
Way back in a 1919 case called Reteuna v. Industrial Commission, the Utah Supreme Court explained the rationale this way: “The Utah Workers Compensation Act embodies a pubic policy and legislative intent to ‘secure compensation to an injured employee … [and] to relieve society of the care and support of the unfortunate victim of the industrial accident.”
(Note: In 2008, the Utah Labor Commissioner issued a policy letter explaining workers comp settlement agreements. Her policy letter quotes the Reteuna case.)
Taxpayers should not foot the bill when an injured worker gets hurt–that is the role and responsibility of the workers compensation carrier (the adjustor).
So, if the adjustor wants you to settle a case because you can have Medicaid pay for the treatment, remember the Reteuna case and remember that under Utah’s Medical Benefits Recovery Act, Medicaid (or your private health insurance or Medicare) may contact you about that settlement money because they may have a “subrogation” right to reimbursement or they may deny benefits. (See the blog post on “subrogation.”)
Lastly, sometimes settlements are good because the evidence in a case is weak or at least disputable. But it is important to know before you sign the agreement how your private health insurance or Medicaid or Medicare are going to view your case. As always, if you have questions about a proposed settlement agreement, please ask a workers comp attorney for a free, initial consultation.

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