If you have a work injury claim because you suffered an injury on the job, you may have an arduous road ahead of you to make sure your case is resolved in a manner that is advantageous to you. Once you get an award of benefits or a settlement with your employer's insurance company, other parties including your attorney, doctors and government agencies, may have a claim on some of that money.
So, how much of your work injury settlement can you actually keep? This is a valid question to ask. It's also a good idea not to be surprised by what you may have to pay to other parties after you are deep into the process. This article will list some of fees and payments you may have to make using your settlement money.
Work Injury Attorneys' Costs and Fees
In California, many work injury lawyers charge what is known as a "contingency fee." This essentially means that you won't pay upfront costs and fees. However, your attorney will receive a certain percentage of the money you get in a work injury settlement or award. You won't owe anything if you don't win any benefits.
California caps attorneys' fees in workers' comp cases at 15% of the money awarded to the worker compared to the standard 30% to 40% contingency fee a personal injury lawyer may charge in a car accident or other personal injury case. In addition to the contingency fee, you will also have to reimburse any payments your lawyer may have advanced to expenses such as copying medical records, hiring expert witnesses and court reporters to transcribe depositions.
Unpaid Work Injury Medical Bills
If your work injury claim is initially denied, but if you are successful on appeal, the judge may order the insurance company to pay your medical bills in addition to your workers' comp settlement or award. If you paid your medical expenses, then you can keep the money in the award that is allocated for those costs. But, if your doctors allowed you to postpone your medical bills until you received your workers' comp settlement, you must pay those bills after you receive your settlement or award.
In some cases, your work injury lawyer may negotiate a settlement that requires the insurance company to pay some of the medical bills directly. However, in many cases, the settlement will include a lump sum for medical bills. Your lawyer may withhold a portion of the settlement to pay off those unpaid bills, but he or she may also be able to negotiate with your medical providers to lower those bills. If that happens, you will be able to keep a bigger portion of your workers' comp settlement.
How Medicare/Medicaid Work
Medicare will not pay for medical expenses that are covered under workers' comp. However, it may pay medical bills in certain situations such as when there is a dispute about workers' compensation liability. So, if you are eligible for Medicare, in such cases, a part of your work injury settlement may go to the government because you must repay Medicare for conditional payments it made during your appeal.
Also, if your settlement included funds for future medical expenses, you must put part of those settlement funds in a Medicare Set-Aside Account or MSA, which will go toward paying for future medical treatment related to your work injury. Similarly, if you have Medicaid, or Medi-Cal in California, you must reimburse the agency for any conditional payments it made for medical bills related to your work injury. Prior to settling your workers' compensation claim, you'll need to contact your Medi-Cal insurer to determine what it paid for your work injury-related medical treatment.
Permanent Work Injury Disability Payments
Under California law, the insurer must start making permanent disability payments within 14 days of the last payment for temporary disability. If you receive permanent disability advances, those will be deducted from your eventual work injury settlement or award as well. It is important to remember that if you have unpaid child support due, part or all of your workers' compensation settlement may be taken out to pay what you owe. Even benefits for temporary or permanent disability are considered income when it comes to unpaid child support.
Will I Owe Taxes on my Settlement?
You won't have to pay state or federal taxes on your workers' comp settlement or award. The one exception to this, however, is you are also receiving benefits through Social Security Disability Insurance or SSDI. If your combined SSDI benefits and workers' comp payments are high enough, your SSDI benefits may be reduced, which is known as an "offset." You may have to pay taxes on the amount of the offset. Your work injury settlement may also have an impact on certain tax credits because the IRS may consider the amount you receive from your settlement as income for the purpose of determining your eligibility for those tax credits.
How Greenberg and Ruby Can Help You
The process of seeking compensation after a work injury can have significant legal and financial implications. It could affect what you owe in terms of medical bills. It also becomes apparent as you pay all your bills that your workers' comp benefits simply may not be sufficient to cover all your work injury-related losses. This is particularly true if you've suffered major injuries that make it difficult for you to return to work or even to earn a livelihood.
The experienced Los Angeles work injury lawyers at Greenberg and Ruby Injury Attorneys can help you explore all possible avenues of compensation including third-party claims – which are claims filed against entities other then employers who caused your injuries. Third-party claims are worth much more than workers' compensation benefits and can help compensate you for losses that will not be covered under workers' comp. If you have been injured on the job and are struggling to meet your expenses, we can help you explore all of your legal options.
We understand that this can be an extremely challenging time for you and your family as you attempt to heal from your injuries and navigate a complex legal process. The decisions you make during this time can have long-term impacts and may even affect your financial future. Call us at (323) 782-0535 to schedule your free consultation and comprehensive case evaluation.