How Does Permanent Total Disability Impact A Workers’ Compensation Settlement?

If the individual is claiming permanent total disability in the state of Colorado, the standard that they have to meet is that they are incapable of earning “any wages”, and the courts have construed that statement narrowly. It’s very difficult to win in court on a permanent total disability case. For instance, if a person is capable of working part-time at minimum wage, then they are considered employable, and therefore not permanently totally disabled. If the individual was a really high-wage earner prior to the accident and can no longer do their prior employment, although it’s a factor that’s considered as to whether they’re permanently totally disabled, it’s not determinative. A lot of people think that because they can’t go back to their prior job, they’re permanently totally disabled, and that’s incorrect. In Colorado, the standard is “any wages.”

When you are estimating the value of a permanent total disability settlement, you use your “average weekly wage” from the job you were injured at. In estimating the value of a permanent total disability settlement, you need to look at what’s called the present-day value. The present-day value takes into account the weekly amount of benefits that the injured worker receives. It takes into account any additional disability benefits they receive such as Social Security Disability. If the person was a public employee, any public employee retirement or disability benefits are taken into account. If the employer has a pension plan, that may be considered as well. Those factors are considered part of the present-day value, and they are all put into a formula. Different discount rates are used to determine what the actual present-day value of the permanent total disability benefits comes out to.

Another factor that complicates permanent total disability settlements is future medical care. If an individual is receiving or eligible for Social Security Disability and Medicare, then a Medicare Set Aside proposal often has to be submitted to (CMS), the Center for Medicare and Medicaid Services. That is so CMS can determine if an appropriate amount of the settlement is paid toward future medical care. Many years ago, Medicare essentially said that in work comp cases and insurance company could no longer settle work comp cases and allow future medical care to be paid for by taxpayers and Medicare. An injured worker’s future medical care has to be taken into account, and the amount has to be approved by Medicare if the person is either on Medicare or eligible for Medicare within 30 months. There are also some numerical thresholds that have to do with the amount of the settlement. But the bottom line is, if somebody is going to settle their permanent total disability case, you have to look at the cost of future medical care that Medicare may cover. You also want to include the costs of future medical care that Medicare doesn’t cover.

For instance, for a long time, Medicare did not cover acupuncture. If acupuncture was the future medical care which kept an injured worker in a functional status, the amount of that future acupuncture medical care could be negotiated as part of a permanent total disability settlement. The funds wouldn’t necessarily go into the MSA, the Medicare Set Aside Account. They could be put into an MCA or a Medical Custodial Account. The MCA is a separate account for future medical care not covered by Medicare but would be related to the work comp injury.

Permanent total disability settlements quite often are the result of catastrophic injury cases. They may involve people who are paraplegic, quadriplegic, or who have traumatic brain injuries. In those cases, it’s very complicated because there’s an interplay of indemnity benefits, complex medical needs, possible guardianship needs, prosthetic devices, homecare needs, transportation needs, etc. that the individual may need for the rest of their life.

In the case of a traumatic brain injury, someone may need a conservator to manage funds for them. There’s the cost of mobility equipment such as a van to transport a person in a wheelchair, or future transportation needs. When a catastrophic claim arises, there are multiple stages and factors that need to be considered as part of a permanent total disability settlement.

How Long Does It Typically Take To Reach A Settlement In A Workers’ Compensation Case?

The amount of time that it takes to reach a settlement in a workers’ compensation case depends on the person’s healing. If an individual has an uncomplicated broken arm, and within two months they’re back and everything is good, potentially you could be done the case in a short period of time. On the other hand, if the circumstance is a traumatic injury causing permanent total disability, it may take several years to get to a point where a permanent total disability settlement is appropriate.

Realistically, the timing of a settlement is based on how long it takes a person to heal. Once a person gets to the point of maximum medical improvement where only maintenance treatment is needed then a settlement can happen fairly quickly.

For more information on Permanent Total Disability In Colorado, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (303) 420-8080 today.