What Indiana Employers Need to Know When Settling Worker’s Compensation Claims
Indiana Code § 22-3-2-15 permits an injured employee or his dependents and an employer to enter into a full and final settlement agreement which forecloses the injured employee’s ability to reopen a claim for a change in condition. The Indiana Worker’s Compensation Board (the “Board”) has implemented a series of changes on how it handles settlement agreements over the last six months. All settlement agreements submitted to the Board will now be reviewed by individual hearing members and may be refused and returned for failure to adhere to the newly implemented changes.
On June 12, 2018, the Board issued a Notice itemizing elements which are to be included in a settlement agreement when submitted to the Board for approval. While certain elements are only “necessary” when the injured worker is pro se (i.e. without counsel), the Board indicated the information is “advisable” in all complicated cases. The list includes the following information which was not previously required:
- Number of weeks of temporary total disability (“TTD”) benefits received by the injured employee;
- Estimated total medical expenses paid to date;
- Description of surgical procedures performed;
- Discussion of outstanding medical bills and indication as to which party will be responsible for payment;
- Permanent Partial Impairment (“PPI”) rating calculation;
- List of any existing liens and how they will be resolved; and
- Any permanent physical restrictions assigned by the treating physician.
In addition to itemizing information which must be included in a settlement agreement, the Board also provided guidelines on terms which are not to be included. The prohibited terms include the following:
- Confidentiality clauses with liquidated damages provisions;
- Blanket releases of any and all claims; and
- Employee resignation conditions.
The largest change addressed in the recent Notice surrounds the Board’s treatment of “Section 15” full and final settlements. The Board will now “closely scrutinize” these agreements when submitted in connection with a compensable claim. Parties wishing to enter into a full and final settlement must specify the legal dispute which supports the foreclosure. No settlement agreements submitted by RBE have been rejected as a result of these new changes; however, it is possible the Board will no longer approve a settlement agreement which includes only a general description of a dispute (i.e. a dispute arose between the parties as to the benefits the employee was entitled to receive or whether the employer could be held liable under the terms of the Act).
The Board will also require the parties to submit the following supporting documentation with all settlement agreements submitted for approval:
- Final medical report of the injured employee’s treating physician;
- IME report (if any);
- PPI report and accompanying hand or foot chart (if applicable);
- Employee waiver (if any); and
- Functional Capacity Evaluation if available and relevant.
These changes to the settlement process will require employers and carriers to collect and maintain additional documentation throughout the claim process. Organization and retention policies will ensure compliance with these new requirements. The employer (or its worker’s compensation carrier or third party administrator) should maintain the following materials in each worker’s compensation claim:
- Accounting of TTD benefits;
- Accounting of medical expenses paid;
- All medical records or reports received from a treating provider;
- All medical bills for authorized or unauthorized care; and
- Any lien notices.
If a claim is assigned to RBE after the injured employee has been placed at maximum medical improvement (“MMI”), we recommend enclosing the following at the time of the assignment:
- First Report of Employee Injury, Illness;
- Agreement to Compensation and/or Report of TTD/TPD Termination;
- Claim Transaction Detail Report or Payment Register reflecting TTD benefits and medical expenses paid to date;
- Treating physician’s final medical report with MMI determination and description of any physical restrictions;
- PPI report;
- Lien notices (i.e. Medicare or private insurer) (if any);
- Information regarding subrogation procedures;
- IME report (if any); and
- FCE report (if any).
Please contact a member of RBE’s worker’s compensation team should you have any questions regarding these changes.
By: Miranda W. Bernadac, former Riley Bennett Egloff attorney.
© Riley Bennett Egloff LLP
Disclaimer: Article is made available for educational purposes only and is not intended as legal advice. If you have questions about any matters in this article, please contact Riley Bennett Egloff directly.
Permissions: You are permitted to reproduce this material in any format, provided that you do not alter the content in any way and do not charge a fee beyond the cost of reproduction. Please include the following statement on any distributed copy: “© Riley Bennett Egloff LLP – Indianapolis, Indiana. www.rbelaw.com”
Posted June 19, 2018.