Settle a Claim
One option to resolve a claim is a structured settlement. This is an agreement between an injured worker, L&I, and sometimes you, the employer.
The agreement generally resolves all future benefits except medical. Workers may still be eligible to receive medical treatment for conditions allowed on their claim.
This typically closes the claim and the worker is paid a set amount in periodic payments spelled out in the agreement.
To be eligible, the worker must:
- Be age 55 or older.
- Have an accepted workers' compensation claim in Washington (with L&I or a self-insured employer), that is at least 180 days old.
You may initiate structured settlement discussions for an eligible worker's claim by filing an application with L&I. However, structured settlements are voluntary, and the decision on whether to enter into a discussion or settlement is up to the worker and L&I.
- State fund employer Q&A
- Self-insured employer Q&A
- What injured workers need to know about settlements
Apply
There are 2 ways to apply:
- Apply online.
- Call us at 360-902-6101 for an application you can fill out and fax or mail to us.
Contact us
- Phone: 360-902-6101
- Email: Settlement@Lni.wa.gov
State fund employer Q&A
May I contact my injured worker about a settlement agreement?
Yes, you may contact eligible injured workers to determine if they are generally interested in a structured settlement option. Settlements are strictly voluntary, and the injured worker and L&I have the choice whether or not to explore this option.
Because L&I is responsible for leading negotiations in State Fund claims, you should not discuss with a worker specific settlement terms or dollar amounts before the negotiation process.
- How will a settlement agreement affect my premiums?
It's difficult to predict the exact impact a settlement will have on your premiums because many other variables determine the premium you pay.
However, L&I staff can determine whether a proposed settlement will reduce the claim costs used to calculate your premiums.
- What are the rules for structured settlements?
- Who is involved in a settlement agreement?
All parties to a claim must agree to the negotiated settlement. If you are a State Fund employer (you pay premiums to L&I), the parties include L&I, the injured worker, and you.
Occupational disease claims may involve more than one employer that is a party to negotiations.
There are some cases when a State Fund employer is not party to an agreement:
- The claim cost is no longer used to calculate the employer's experience factor premiums;
- The employer cannot be located;
- The employer is no longer in business; or
- The employer fails to respond, or declines to participate, after being notified of the structured settlement agreement process by the Board of Industrial Insurance Appeals (BIIA) and L&I.
- Who approves the settlement agreements?
All agreements must be reviewed and approved by the Board of Industrial Insurance Appeals (BIIA).
- If I am interested in pursuing a structured settlement, should I hire an attorney?
We strongly recommend workers and employers consider whether they would benefit from the advice of legal counsel and/or a financial consultant.
Settlements involve sophisticated legal procedures, and they can have a major financial impact on injured workers as well as their families. It is important for workers and employers to be informed of their rights and how a settlement may impact their future livelihoods.
- I belong to a Retro group. Can a third-party administrator represent me in settlement negotiations?
Yes, although your signature is required on any final agreement.
- How does the structured settlement process work?
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If the claim is managed by L&I, the worker or employer files an application with L&I.
If you wish to discuss settlement options, please call us at 360-902-6101 for the settlement application form.
L&I may also initiate settlement discussions with you and the worker.
- For claims with L&I, we will review the application to determine if the claim is appropriate for settlement negotiation. If the team determines settlement may be an appropriate option, they will contact all parties and begin negotiating specific terms of settlement.
- If all parties agree, L&I will draft the settlement contract, circulate for signature, and submit the contract to the Board of Industrial Insurance Appeals (BIIA).
- The BIIA will either approve or deny the agreement.
- If the BIIA approves the agreement, there is a 30-day revocation period in which any party to the agreement may revoke consent to the settlement for any reason. L&I will continue to manage the claim and pay any benefits the worker is entitled to throughout the revocation period.
- The structured settlement agreement becomes final when the 30-day revocation period ends. Structured settlement payments will not begin until after the agreement is final.
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- When is a settled claim considered to be closed?
If closure of the claim is part of the agreement, it is considered closed 30 days after the BIIA issues its approval, giving all parties the legally required time to revoke consent to the settlement.
- Can injured workers younger than 55 qualify in the future?
Under the law, L&I may only consider a settlement application if the injured worker is 55 or older on the date we receive the application. The age requirement is met as soon as the worker turns 55, regardless of injury date or any other factor.
The age requirement drops to 53 beginning January 1, 2015, and drops further to 50 beginning January 1, 2016.
- Will structured settlements be allowed for claims that are closed?
At this time, L&I is not considering settlements for claims that are closed.
Permanent rules for structured settlement agreementsWho's involved?
Process
Eligibility
Self-insured employer Q&A
- How do I begin the settlement process?
As a self-insured employer, you are responsible for the settlement negotiations. You have the option of approaching your injured worker to discuss opportunities for settlement as soon as the worker becomes eligible for a structured settlement. L&I is not involved.
- Am I required to report settlement payments as claim costs?
Yes, the full amount of the settlement must be reported for the quarter in which the agreement becomes final, and the remaining balance must be reported in each subsequent quarter until the balance is zero. You will pay claim cost assessments on the amount actually paid out each quarter.
On your annual report, you must also report the amount of any settlement payments and remaining balance.
- Do my claim obligations continue during the settlement negotiation and approval processes?
Yes, your claim obligations continue until the settlement agreement becomes final 30 days after the BIIA approves the agreement.
- What requirements apply to payment of the structured settlement?
Structured settlement law requires periodic payments with certain limits on the amount of each payment:
Limits on periodic payment amounts: Limits on periodic payment amounts At least: No more than: Initial payment must be... 25% of the state's average monthly wage. 600% of the state's average monthly wage. Subsequent payments must be... 25% of the state's average monthly wage. 150% of the state's average monthly wage. You and the worker may agree to any payment schedule, but the periodic payments cannot be more frequent than once every 2 weeks.
You cannot delegate the obligation to make these payments to anyone other than your third-party administrator.
- What issues cannot be included in an agreement?
The agreement cannot affect future industrial injury or occupational disease claims, including claims for future death benefits or survivor benefits arising from the settled claim.
Also, issues outside of Title 51, such as employment or discrimination claims and disputes, may not be settled as part of a structured settlement agreement. The agreement cannot include monetary amounts for future medical benefits.
- Can an agreement invoke the second injury or other Title 51 fund?
You must receive the L&I Director's prior written approval for any settlement agreement to impact a Title 51 fund. You must notify the department in writing and give the Director 30 days to approve or deny the request.
Submit your request to:
Department of Labor & Industries
Structured Settlement Unit
PO Box 44251
Olympia, WA 98504-4251
