When you're dealing with a workers' compensation case in New York, you might hear about something called a Section 32 settlement. This is a lump sum agreement that can close out your claim, but understanding what you're agreeing to matters before you sign anything.
What Is A Section 32 Settlement
A Section 32 settlement gets its name from Section 32 of the New York Workers' Compensation Law. It's basically a negotiated agreement between you and the insurance carrier that resolves some or all aspects of your workers' comp claim in exchange for a one-time payment. Unlike regular workers' comp benefits that come in weekly checks, a Section 32 gives you money upfront. The insurance company wants certainty about their financial exposure, and you get immediate access to funds rather than waiting for ongoing payments.
What Gets Covered In These Agreements
Section 32 settlements can address different parts of your claim:
- Future medical treatment related to your work injury
- Reduced earning capacity or wage loss benefits
- Permanent disability awards
- Schedule loss of use payments
Some settlements cover everything (known as a full and final settlement), while others might only resolve medical benefits or wage replacement. The scope depends entirely on what you and the insurance carrier negotiate.
How Settlement Amounts Get Determined
There's no standard formula. The value depends on several factors, including the severity of your injury, your age, whether you need future medical care, and your ability to return to work. A Queens Workers Compensation Lawyer can review the insurance company's offer and tell you if it fairly compensates you for giving up future benefits. Your average weekly wage plays a role too. Someone with higher pre-injury earnings typically has more at stake in wage replacement benefits, which affects the settlement value.
The Approval Process
You can't just shake hands and cash a check. The Workers' Compensation Board must approve any Section 32 settlement. A judge reviews the agreement to make sure it's fair and in your best interest, particularly regarding future medical needs. The insurance carrier submits the settlement documents to the Board. You'll attend a hearing where the judge asks questions about your understanding of the agreement and whether you're accepting it voluntarily. If approved, the insurance company usually has a specific timeframe to issue payment.
When A Section 32 Makes Sense
Accepting a lump sum works well in certain situations. Maybe you need money now for bills, debt, or starting a business. Perhaps you've recovered fully and don't anticipate needing more medical treatment. Some people prefer the certainty of a set amount over the uncertainty of ongoing litigation. If you've reached maximum medical improvement and your condition is stable, a settlement might give you closure and let you move forward.
The Risks You Should Consider
Once you sign and the Board approves it, you generally can't reopen your claim. If your condition worsens later or you need additional surgery, you've already released the insurance company from those obligations (assuming you settled medical benefits). The lump sum might seem substantial, but it needs to last. If you're settling future wage benefits, you're betting that the amount will adequately replace years of weekly payments. A Queens Workers Compensation Lawyer can calculate what you'd receive in ongoing benefits versus the settlement offer. Tax implications exist too, though workers' comp benefits are generally tax-free under federal law.
Medicare Considerations
If you're on Medicare or will be eligible within 30 months, special rules apply. Federal law requires a Medicare Set-Aside (MSA) arrangement in certain settlements to protect Medicare's interests. This sets aside part of your settlement for future injury-related medical expenses before Medicare pays anything. Ignoring Medicare requirements can create serious problems down the road.
Getting Legal Guidance
Section 32 settlements are binding agreements with long-term consequences. Insurance companies have attorneys protecting their interests. You should too. Polsky, Shouldice & Rosen, P.C. helps injured workers throughout New York understand their settlement options and negotiate fair compensation. We review offers, explain what you're giving up, and make sure the Board approval process goes smoothly. Contact our firm to discuss whether a Section 32 settlement serves your best interests or if continuing with your claim makes more sense for your situation.
