What is the Right Amount to Settle For in Louisiana Workers Compensation?

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How to Evaluate the Settlement Value of a Louisiana Workers Compensation Claim

Before engaging in any settlement negotiations, it is incredibly important for an injured employee to retain a qualified Louisiana workers compensation attorney in order to perform a proper and thorough evaluation to determine the correct settlement value of the employee's claim.

In fact, correctly assessing and evaluating the employee's injury and claim properly right from the start can avoid any costly or unnecessary legal expenses while maximizing settlement value.

A general outline for calculating the correct settlement value of a Louisiana workers compensation claim is as follows:

    1. ASSESSMENT OF THE INJURY/DISABILITY STATUS
    2. INDEMNITY BENEFITS
      1. STEP 1: Determine the Average Weekly Wage (AWW);
      2. STEP 2: Determine the type of disability benefit;
      3. STEP 3: Determine whether there are any credits / offsets applicable; and
      4. STEP 4: Apply discount rates (actual discounts and time discounts).
    3. MEDICAL BENEFITS
      1. Past Medical Benefits
      2. Future Medical Benefits
    4. OTHER DETERMINATIONS FOR SETTLEMENT VALUE: T.R.E.E. (Time, Risk, Economics, Emotion) 
      1. Causation
      2. Intoxication Defense
      3. Future Value of SEBs
      4. Appealable Value
      5. Penalties and Attorney's Fees

These topics and issues in this outline are explained in detail below.

Additionally, key issues and variables that factor into the value of a workers compensation claim include:

    1. The amount of an employee's weekly lost wage (indemnity) benefits;
    2. The number of potential weeks of lost wage (indemnity) benefits remaining;
    3. The status of an employee's vocational rehabilitation;
    4. The employee's earnings at the time of the accident;
    5. The employee's age, education, work history and transferable skills;
    6. The extent of the employee's injuries and resulting functional limitations;
    7. Whether the employee's disability is temporary or permanent; and
    8. The cost of past, current and future medical treatment.

Also, generally speaking, the value of an entire workers compensation claim is the amount the employee would receive from the workers compensation insurance company over the entire lifespan of the claim.

However, the settlement value of an employee's claim is based on the expected future lost wage (indemnity) benefits and future medical expenses, minus any discounts (including the probability of those future lost wages and medical expenses occurring).  

Assessment of An Employee's Injury and Disability Status When Evaluating the Value of a Settlement Claim in Louisiana Workers Compensation

Before evaluating the lost wage (indemnity) benefits, the medical benefits, and other determinations, it is best to generally assess an injured employee's injury and disability status.

The value of a workers compensation claim in most instances requires an assessment of the value of the remaining entitlement to indemnity benefits or the potential thereof and the value of the future medical expenses or potential thereof.

In assessing the indemnity, an injured worker must start with getting from the workers compensation insurance company the information on what amount of indemnity benefits has already been paid.

In addition, an injured worker's disability status must be determined to allow the employee to determine under which category of benefits the potential for recovery falls.

A general assessment of an injured employee's injury and disability status should include:

    • What part of the employee's body is hurting?
    • What are the employee's injuries?
    • Has the employee been to see a doctor yet?
    • Is the employee able to work at all?

The best way to answer these questions is to make sure that the employee has seen a doctor, and then rely on the medical records and the conclusions of the physician or other healthcare providers.

Concerning a disability status, an injured employee or the employee's attorney should always rely on the treating physician's physical work limitations or lack thereof.

Example of work restrictions include:

    1. No work;
    2. Full Duty;
    3. May return to regular work;
    4. Light duty;
    5. Sedentary duty;
    6. Disabled from work; and
    7. May work but with the following restrictions.

Concerning injuries, sometimes injuries are obvious (such as scars, cuts, missing limbs, missing fingers, loss of an eye), but sometimes injuries are not obvious (such as rotator cuff tears, a herniated disc of the spine, meniscus tears, hearing loss, PTSD).

Additionally, Louisiana workers compensation law only provides lost wage (indemnity) benefits and medicals benefits for accidents and injuries caused during the course and scope of the employment relationship.

In other words, an injured employee cannot recover for pain and suffering or any other "general damages" awards.

How to Properly Evaluate the Settlement Value of the Lost Wage Portion of a Claim in Louisiana Workers Compensation

The general steps to evaluating the settlement value of the lost wage (or indemnity) portion of a Louisiana workers compensation claim are as follows:

    • STEP 1: Determine the Average Weekly Wage (AWW).
    • STEP 2: Determine the type of disability benefit.
    • STEP 3: Determine whether there are any credits / offsets applicable.
    • STEP 4: Apply discount rates (actual discounts and time discounts).

Step 1: Determining the Injured Worker's Average Weekly Wage (AWW).

In order to calculate any type of lost wage benefit, an injured employee must determine his or her Average Weekly Wage.

In most cases, the workers compensation insurance company will provide an injured worker with a weekly lost wage (indemnity) check for 2/3 (two-thirds) of the employee's average weekly wage, if the employee is physically unable to work due to an injury on the job.

However, these lost wage benefits are subject under Louisiana law to both a maximum compensation rate and a minimum compensation rate cap.

An employee's average weekly wage is typically based upon the employee's earnings for:

    1. The 4 full weeks before the employee's injury or accident for hourly workers;
    2. The 26 weeks before the employee's injury or accident for commission workers; and
    3. The 52 weeks before the employee's injury or accident for salaried employees.

But the basic calculation for lost wages is subject to many exceptions and variations.

An employee's average weekly wage is typically based upon the employee's gross wages.

Gross wages mean the total amount of pay, before deductions and taxes, Social Security, retirement, etc.

Also, "four full weeks" means the four full work weeks prior to the employee's accident or injury.

If the employee had an illness, instead of an accident or injury, the date of accident is considered to be the last day the employee worked or had harmful exposure.

An outline of the formulas used to determine an injured employee's average weekly wage is as follows:

1.  Hourly Wages.

(1) For employees who worked 40 hours or more in a week: Take the average number of hours worker per week in the four (4) full weeks prior to accident, and then multiply that number by the hourly rate. For full time employees, always use at least 40 hours per week, unless the employee chose at his or her own discretion to work less hours.

(2) For employees who were offered at least 40 hours per week, but regularly and voluntarily worked less than 40 hours per week: Add up the total weekly earnings for the four weeks preceding accident date, and then divide that number by four. 

(3) For part-time employees: Add up the total actual hours worked for the four full weeks preceding the accident, and then divide that by four, and then multiply that number by the employee's hourly rate.

(4) For part-time employees with two or more jobs, where the work injury prevents wage loss in all jobs: Add up the total actual hours worked for all employers for the four full weeks preceding the accident, and then divide that by four, and then multiple that by the employee's hourly rate at the job where the employee was injured; but the total hours may not exceed 40 hours. The employer in whose service the employee was injured pays all the indemnity benefits.

(5) Seasonal employment: Take the employee's annual salary and divide it by 52. Specific rules exist for seasonal employees employed less than a year. A seasonal worker is someone who regularly works less than 44 weeks per year.

2.  Monthly wages: Take the employee's monthly salary, multiple it by 12, and then divide it by 52.

3.  Annual wages: Take the employee's annual salary and divide it by 52.

4.  Wages based on unit, piecework, commission or other basis: Take the employee's gross earnings from the 26 week period immediately before the accident, then divide this number by the number of days the employee actually worked during this 26 week period, and then multiple this number by the average number of days worked per week during 26 week period; however, if the employee worked for the employer for less than 26 weeks immediately before the accident, take the employee's gross earnings from the period immediately preceding the accident, then divide this number by the number of days the employee actually worked during this period, and then multiple this number by the average number of days worked per week during this period.

Hourly employees should separate out any overtime hours, and multiply these hours by the overtime rate.

Hourly employees should separate out any tips or bonuses, and use the calculation method found under "wages based on unit, piecework, commission or other basis" for any tips or bonuses.

Once again, no fringe benefits or other compensation are to be included in calculating the average weekly wage, unless these benefits or compensation are taxable as income. 

A correct calculation of an employee's Average Weekly Wage is extremely important for a correct evaluation of a claim, because if there is a dispute over the AWW, there can be a significant difference in claim evaluations.

For example, an incorrect calculation of an employee's Average Weekly Wage can have a significant effect on the value of an employee's Supplemental Earnings Benefit (SEB) claim.

Step 2: Determining the Type of Disability Benefits.

In Louisiana workers compensation, there are four types of lost wage disability benefits:

    • Temporary Total Disability (TTD) Benefits: TTD benefits are lost wage (indemnity) benefits for the injured employee who is unable to work at all. These benefits provide weekly income equal to two-thirds of the employee's average weekly wage, and continue until the employee is able to work again.
    • Supplemental Earning Benefits (SEB): SEBs are lost wage (indemnity) benefits for the injured employee who is able to return to some type of work, but unable to earn at least 90 percent of the income that the employee was earning prior to the accident. These benefits provide supplementary weekly income so that the employee receives a total income of two-thirds of the employee's average weekly wage. These benefits continue for up to 520 weeks (or 10 years), but this includes a credit for the weeks of indemnity benefits paid. 
    • Permanent Partial Disability (PPD) Benefits: PPD benefits are lost wage (indemnity) benefits are defined and limited to a specific number of weeks, based on the body part injured and the anatomical loss found by the doctor.
    • Permanent Total Disability (PTD) BenefitsLost wage (indemnity) benefits continue indefinitely for the injured employee. But the employee's injury must be so severe that that he or she can never work again. 

Typically, an injured worker will receive a different type of benefit at different point during his or her workers compensation claim, though an injured employee can only receive one type of benefit at any given time.  

The type of indemnity benefits will determine:

    1. How much money the employee will receive in benefits;
    2. How the benefits are calculated; and
    3. How long the employee can receive the benefits;

So it is extremely important for the employee to know what type of benefits the employee is receiving or should be receiving, and to make sure the employee is receiving the correct type of lost wage benefit.

Concerning Supplemental Earnings Benefits (SEBs), an injured worker can only be paid for a total of 520 weeks (or 10 years) where the employee remains disabled because of a work injury, and Supplemental Earnings Benefits (SEBs) will terminate:

    1. At the end of any two-year period following the end of TTD, unless during that two-year period, SEB payments have been payable during at least thirteen consecutive weeks; or
    2. When the employee retires, but subject to a minimum of 104 weeks of SEBs.

Permanent partial disability (PPD) benefits are lost wage benefits for the injured employee who is able to perform some work, but has suffered permanent or disfiguring injuries such as amputation (the loss of a limb or finger), significant scarring, hearing loss, blindness, internal injuries or other catastrophic injuries.

Permanent partial disability (PPD) benefits are paid as a lump sum payment to the injured worker as follows:

    1. For the loss of a thumb, 66.67% of wages during 50 weeks.
    2. For the loss of a first finger, commonly called the index finger, 66.67% of wages during 30 weeks.
    3. For the loss of any other finger, or a big toe, 66.67%of wages during 20 weeks.
    4. For the loss of any toe, other than a big toe, 66.67% of wages during 10 weeks.
    5. For the loss of a hand, 66.67% of wages during 150 weeks.
    6. For the loss of an arm, 66.67% of wages during 200 weeks.
    7. For the loss of a foot, 66.67% of wages during 125 weeks.
    8. For the loss of a leg, 66.67% of wages during 175 weeks.
    9. For the loss of an eye, 66.67% of wages during 100 weeks.
    10. Loss of both hands, or both arms, or both feet, or both legs, or both eyes, or one hand and one foot, or any of two thereof, or paraplegia, or quadriplegia shall, in the absence of conclusive proof of a substantial earning capacity, constitute permanent total disability.
    11. The loss of the first phalanx of the thumb or big toe, or two phalanges of any finger or toe, shall be considered to be equal to the loss of one-half of such member, and the compensation shall be one-half of the amount above specified.
    12. The loss of more than one phalanx of a thumb, or more than two phalanges of any finger or toe shall be considered as the loss of the entire member; provided, however, that in no case shall the amount received for more than one finger exceed the amount provided in this schedule for the loss of a hand, or the amount received for the loss of more than one toe exceed the amount provided in this schedule for the loss of a foot.
    13. Amputation between the elbow and the wrist shall be considered as equivalent to the loss of a hand and amputation between the knee and the ankle shall be equivalent to the loss of a foot.
    14. A permanent total anatomical loss of the use of a member is equivalent to the amputation of the member.

In all these situations listed above (which involve a permanent partial anatomical loss of use or amputation), the injured worker will receive compensation based on the percentage of impairment to the body part.

However, the employer or the workers compensation insurance company may be entitled to a credit for other disability benefits paid against any amount of Permanent Partial Disability.

Step 3: Determining Whether Any Credits or Offsets Are Applicable.

The next step for determining the settlement value of an employee's workers compensation claim is to determine whether any credits or offset are applicable to the lost wage (indemnity) benefits calculated thus far.

Typical credits or offsets applicable here include:

    1. A credit/offset for past workers compensation indemnity benefits paid;
    2. A credit/offset for benefits under disability benefit plans funded by an employer;
    3. The Social Security Disability offset of workers compensation benefits; and
    4. The Social Security Reverse Offset for Permanent Total Disability (PTD) benefits only.

Concerning a credit/offset for past workers compensation indemnity benefits paid, this is important when determining if the employee is owed any Permanent Partial Disability (PPD) benefits, if TTD, SEB, or PTD benefits have already been paid.

In fact, depending on the extent of the injury and the return to work status, most Permanent Partial Disability (PPD) claims are rather insignificant because the workers compensation insurance company will receive an offset or credit for the weeks of indemnity benefits that have already been paid.

Concerning the credit/offset for benefits under disability benefit plans funded by an employer, the credit/offset will exist in the proportion funded by an employer.

Concerning the Social Security Disability offset of workers compensation benefits, an employee's Social Security Disability benefits will be reduced so  that the total of an injured employee's earnings through workers compensation combined with the employee's Social Security Disability benefits cannot be more than 80% of the employee's original earnings.

This Social Security Disability offset will also apply to final settlement funds (not just weekly indemnity checks); however, specific legal language known as Social Security Offset and spread language in settlement documents can definitely help minimize the offset and maximize the employee's recoverable settlement amount.

Concerning the Social Security Reverse Offset for Permanent Total Disability (PTD) benefits only, the offset is determined by adding the total family benefits ("TFBs") received from Social Security (before any offset has been taken by Social Security) and the employee's monthly workers compensation benefits, and then subtracting from the result either the TFB or 80% of the average current earnings ("ACE") (a figure calculated by Social Security), whichever is greater.

Understanding when to use the calculations for a Social Security Reverse Offset for Permanent Total Disability (PTD) benefits only, and how to apply the reverse offset calculations to future indemnity benefits, are both very important as the employee's calculations may be significantly different from the calculations of the workers compensation insurance company when trying to settle a claim for future Permanent Total Disability (PTD) benefits value.

Full and final settlements for those injured workers will most definitely implicate Medicare, as most of these workers are approved for Social Security Disability (SSDI) in advance of this maturation of their workers compensation claim, and will require the calculation of a Medicare Set-Aside (MSA) arrangement, and (with regard to the indemnity benefits,) there will likely be need to request through the Office of Workers Compensation for a calculation from Social Security of the offset amount.

And in all cases where benefits are converted to permanent and total disability benefits, the workers compensation insurance company is entitled to a reverse-offset, lowering what would otherwise be the workers compensation indemnity payment.

Step 4: Applying Discount Rates Over Time.

In order to properly determine the correct settlement value of an employee's workers compensation claim, the employee must apply certain discount rates to the lost wage (indemnity) figures determined thus far.

Generally speaking there are two types of discounts that should be applied to lost wage benefits: actual discounts and time discounts.

Applying Actual Discounts to Settlements

Actual discounts are discounts to lost wage (indemnity) benefits on the basis that an employee may not expect to actually receive those benefits.

For example, if an injured worker received $500 a week in workers compensation indemnity benefits, and has 5 years of Supplemental Earnings Benefits (SEBs) remaining, then the value of those full remaining SEBs is $130,000.00.

However, if this same employee and this employee's attorney determine after a thorough analysis that - due to the employee's medical status and work skills and abilities - the employee in all likelihood will only be able to receive 2 more years of Supplemental Earnings Benefits (SEBs), even those 5 years are technically possible, then this employee and his or her attorney should apply an "actual discount" from 5 years of SEBs to 2 years of SEBs, and calculate the employee's correct settlement value of the employee's lost wage (indemnity) benefits to be $52,000.

An the employee should keep in mind while coming to terms with this discount that if there is a release to work with no restrictions, then that worker very likely is not entitled to any indemnity benefits beginning at the time of vocational rehabilitation soon after that release to work, especially if there is also a release from medical care with a medical opinion saying that the employee is at maximum medical improvement.

Still, if the employee has returned to employment with no restrictions, but is not able to earn 90% of the employee's pre-injury average weekly wage, it should be possible to prepare estimates of the employee's lost earnings and the resulting potential entitlement for Supplemental Earnings Benefits (SEBs), and achieve a favorable settlement for those amount.

Applying Time Discounts to Settlements

Even if the employee and the workers compensation insurance company agree generally on the amounts of lost wage (indemnity) benefits due over time, the employee will need to apply a discount over time.

An injured employee will need to apply a discount over time because the workers compensation insurance company is very rarely, if ever, going to give the employee 100% of the value of the employee's claim for future benefits over time.

Basically, why would the workers compensation insurance company agree to pay 100% of the money it might owe over a long time, and simply give up the interest and investment it could earn on that money while the employee waits for it?

Just like lottery winnings, if the lottery winner wants all his or her money up front (instead of paid out over many years), the lottery winner will need to take less money.

Thus, when valuing the future lost wage (indemnity) benefits of a workers compensation claim, the employee should use a discount value calculator.

For example, if an injured worker received $500 a week in workers compensation indemnity benefits, and has 5 years of Supplemental Earnings Benefits (SEBs) remaining, then those full remaining SEBs is $130,000.

But, using a discount value calculator at a discount rate of 4%, this same employee should receive $106,850.52 for the employee's remaining Supplemental Earnings Benefits (SEBs); and using a discount value calculator at a discount rate of 8%, this same employee should receive $88,475.82 for the employee's remaining SEBs.

Additionally, even though the settlement value of a workers compensation claim is always discounted for time, the actual amount of the time discount is often disputed.

In practice, the workers compensation insurance company will often demand an 8% discount because under Louisiana law, in a lump sum settlement, the payments due the employee or his dependents shall not be discounted at a greater rate than 8% (eight percent) per year.

But in reality, an 8% discount is simply a high-end limit, and not reasonable because rarely will an employee find any investment that will allow a consistent year-over-year 8% return.

To that effect, the actual amount of the time discount should be negotiated, which typically involves the employee's attorney starting the negotiation with undiscounted numbers in an effort to allow the parties meet somewhere in the middle.

How to Calculate the Settlement Value of the Medical Portion of a Claim in Louisiana Workers Compensation

The value of a workers compensation claim in most instances requires an assessment of the value of the remaining entitlement to indemnity benefits or the potential thereof and the value of the future medical expenses or potential thereof.

Therefore, after properly evaluating lost wage (indemnity) benefits, in order to properly determine the correct total settlement value of an employee's workers compensation claim, the employee must properly evaluate past and future medical expenses.

Again, the settlement value of an employee's workers compensation is based on the expected future lost wages and future medical expenses, minus offsets and discounts (including the probability of those future lost wages and medical expenses occurring).  

Medicare Assessment

In order to calculate the medical settlement value of a workers compensation claim (which is based on future medical expenses), it is of the utmost importance to determine whether the injured employee is a Medicare recipient or has a reasonable expectation to receive Medicare in the future.

If so, the employee will likely have issues with past medical benefits such Medicare conditional payments, Medicaid liens and Medicaid reimbursements.

But more importantly, the injured employee will likely be required to have a Medicare Set-Aside (MSA) prepared on the employee's behalf by a third-party company hired by the workers compensation insurance company.

Critically, this Medicare Set-Aside (MSA) will provide an estimate of the cost of the employee's future medical expenses, which is exactly what the medical portion of the settlement value of a workers compensation claim is based upon.

But a Medicare Set-Aside (MSA) may very well require that some of the settlement money be set aside for the employee's future medical expenses should they arise.

So a proper evaluation of Medicare's interests is a critical first step in calculating the settlement value of the medical portion of a workers compensation claim, because it may very well dictate the precise settlement value of the medical portion of the employee's workers compensation claim.

Past Medical Treatments and Expenses

In order to calculate the medical settlement value of a workers compensation claim (which is based on future medical expenses), it is also critical to evaluate past medical treatment history and past medical payment history.

Especially without the potential clarity of a Medicare Set-Aside (MSA), an employee's past medical treatment history and past medical payment history can help dictate what the employee's future medical treatment and expenses will be.

Also, important questions about how the workers compensation insurance company is handling the claim must be evaluated, such as:

    • Is the claim compensable (meaning: should be paid) and are current medical benefits being paid?
    • Is the claim as a whole, or any part of the claim, being denied as non-compensable?

If any current medical benefits are being denied, it should be understood that most denials are being made for medical necessity and disputes must go through the medical treatment guideline procedures.

But not all treatments, for example medical devices and prescription medications, are covered by the medical treatment guidelines, and therefore there are often conflicting opinions as to whether it is proper to use the medical guidelines for such treatmenst.

And even in claims that the workers compensation insurance company admits are compensable, there can also be disputes over choice of physician and/or change of physician.

Importantly, an employee's past medical treatment history and past medical payment history can help determine what the actual medical expenses are that are related to the accident/injury, and thus what the employee's future medical treatment and expenses should be.

An employee's past medical treatment history and past medical payment history can help identify common issues with past medical benefits, such as:

    1. Medicare conditional payments;
    2. Liens of health care providers;
    3. Medicaid liens; and
    4. Medicaid reimbursements.

And an employee's past medical treatment history and past medical payment history can help identify any potential issues for possible trial (even thought the issues could still negotiated), such as:

    1. Payment on previous medical bills;
    2. Authorization of medical treatment; and
    3. Choice of physician.

Lastly, an employee's past medical treatment history and past medical payment history can help identify the cost and expenses of any of the employee's future medical treatment, especially if the future treatments will be similar to the past treatments or handled by the same providers.

Future Medical Expenses

As noted above, the settlement value of a workers compensation claim is in large part based upon the value of the remaining entitlement to the future medical expenses or the potential thereof.

However, more often than not, there is no exact way to determine an injured employee's future medical needs and expenses.

The employee should hire a qualified, experienced Louisiana workers compensation attorney to determine an injured employee's future medical needs and expenses, and this attorney must spend the time with the employee on this evaluation and keep the employee involved during this process to come up with reasonable estimates over time to determine future medical costs.

Certainly, a Medicare Set-Aside (MSA) can provide an estimate of the cost of the employee's future medical expenses, which is exactly what the medical portion of settlement value of a workers compensation claim is based upon.

But, though they can rely on the Medicare Set-Aside (MSA) to some extent, the employee and the employee's attorney should still:

    1. Determine what medical expenses are or will be incurred as a result of the accident;
    2. Determine whether the Medicare Set-Aside (MSA) covers all such treatment; and
    3. Add additional value to the claim for such value of all such treatment.

In fact, some Medicare Set-Asides (MSAs) will cover “Non-Medicare Covered treatment related to the accident and injury” (such as Lyrica and hearing aids), but most MSAs do not.

Additionally, if there is no Medicare Set-Aside (MSA) needed or provided for an employee's claim, it is still critically important that the employee and the employee's attorney determine an injured employee's future medical needs and expenses as accurately as possible.

Again, this attorney must spend the time with the employee on this evaluation and keep the employee involved during this process to come up with reasonable estimates over time to determine future medical costs.

And again, an employee's past medical treatment history and past medical payment history can help determine what the actual medical expenses are that are related to the accident/injury, and thus what the employee's future medical treatment and expenses should be.

An employee's past medical treatment history and past medical payment history can help identify common issues with past medical benefits, and can help identify any potential issues for possible trial (even thought the issues could still negotiated).

And an employee's past medical treatment history and past medical payment history can help identify the cost and expenses of any of the employee's future medical treatments, especially if the future treatments will be similar to the past treatments or handled by the same providers.

Other Determinations for Settlement Value (T.R.E.E.) in Louisiana Workers Compensation

The value of a workers compensation claim in most instances requires an assessment of the value of the remaining entitlement to indemnity benefits or the potential thereof, and the value of the future medical expenses or potential thereof.

Again, the settlement value of an employee's workers compensation is based on the expected future lost wages and future medical expenses, minus offsets and discounts (including the probability of those future lost wages and medical expenses occurring).  

Therefore, after properly evaluating lost wage (indemnity) benefits and future medical expenses, in order to properly determine the correct settlement value of an employee's workers compensation claim, the employee must properly evaluate other considerations important to settlement value.

These other considerations important to settlement value are commonly referred to by the acronym TREE, which stands for:

    • Time
    • Risk
    • Economics
    • Emotion

Common issues to be evaluated by the employee and the employee's attorney for these other determination for settlement value include the following legal issues:

    1. Causation;
    2. The intoxication defense;
    3. The future value of Supplemental Earnings Benefits (SEBs)
    4. The appealable value; and
    5. Penalties and attorney's fees.

The issues related to the acronym TREE (concering other considerations important to settlement value) include the following:

    • Time.
      • In a disputed claim that is set for trial, the time and process of navigating the legal system is always a consideration in terms of settlement value.
        • For employees who are being paid benefits, the value of the claim over time, generally goes down, not up!
        • For employees who are not being paid benefits and are awaiting a trial date and possibly an appeal date, the value of the claim might depend on how long the employee can go without any money or treatment.
      • In a workers compensation claim that is undisputed, but the claim is being valued for future purposes, time is the utmost importance as no one is immortal.
        • If the injured worker dies during the pendency of a claim and before settlement, there is no payout or settlement unless there is a valid death claim.
    • Risk. 
      • Causation: current defenses
      • Causation: future subsequent intervening accidents
      • Defenses: intoxication defense
      • Defenses: fraud
      • Future value of the claim
    • Economics.
      • The employee's interests in settling
      • The employee's financial situation
      • Litigation expenses
      • Social security benefits
      • Disability insurance
      • Third party claims
    • Emotion
      • How well will the employee be able to testify at trial?
      • Will the employee be a good witness at trial?
      • Will the employee crack under pressure at trial?
      • Will the employee's witnesses be good witnesses at trial?
      • Will the insurance company's witnesses be good witnesses at trial?

The Cost-Benefit Analysis When Settling a Louisiana Workers Compensation Claim

An excellent way to determine whether a workers compensation settlement make sense is to consider a simple cost-benefit analysis.

In other words, is there is more to be gained from settlement than from leaving the claim open?

For simple cost-benefit analysis, simply determine:

    • What are the costs (or negatives) of a settlement?
    • What are the benefits of a settlement?
    • At what amount of settlement money do the benefits outweigh the costs?

The main costs of a settlement include the end of medical benefits and and the end of lost wage (indemnity) benefits.

The main benefits of a settlement include the tax-free lump sum cash payment, the end of dealing with workers compensation, and the ability to move on with life, including getting a new job without worrying about a deduction in lost wage benefits.

Of course, a cost-benefit analysis will determine the point at which the employee should settle, but that does not mean that the employee's attorney cannot get more than that amount, because the insurance company's own cost-benefit analysis likely will come up with a higher number for the employee.

For example, following a thorough evaluation of the claim by the employee's attorney, the employee may determine that the employee should settle if he or she can get a $100,000 settlement.

But the workers compensation insurance company may determine that it should settle if the employee would accept a $200,000 settlement.

So from that perspective, even though the employee's attorney will advise the employee to settle if the employee can get $100,000 or more, the employee's attorney can and should aim for, fight for, and negotiate for, much more, and hopefully get the $200,000 settlement in order to maximize the employee's settlement.

But the workers compensation insurance company will likely know that the employee should settle if the employee can get $100,000, so that is why it is important to have an experienced attorney properly handle the settlement evaluation and negotiations.

When to Evaluate the Value of a Settlement Claim in Louisiana Workers Compensation 

The timing of a settlement in Louisiana workers compensation is extremely important, in order to maximize the value of the settlement.

Generally speaking, it is usually in the best interest of an injured employee to have any recommended surgeries before consideration of settlement, since:

    1. It can be difficult to accurately estimate the potential cost of a surgery, due to ever-shifting costs of medical facilities, providers, and/or surgical supplies;
    2. It can be difficult to accurately estimate any pharmacy charges necessary for pre-surgery and post-surgery discharge needs; and
    3. It can be difficult to accurately estimate any unforeseen developments and consequences related to the surgery.

So there is certainly the concern that the injured employee may settle his or her workers compensation claim too early, which is usually before the full extent of the employee's disability is known.

In fact, the workers company insurance company will frequently offer the employee a settlement before the employee's case is ready to settle, in order to low-ball the employee before the employee has retained an attorney.

But even more importantly, it is extremely important to understand that the value of a workers compensation claim continues to steadily decline, unless additional surgeries or procedures are required.

Thus, there is a real incentive to settle at the "optimum" value (or rather as soon as the employee has sufficiently recovered from surgery but not yet returned back to work) in order to maximize the employee's recovery, due to the serious negative effect that vocational rehabilitation can have on the settlement value of a claim.

In fact, the clock is running against the injured employee, even when the employee is engaged in settlement negotiations.

And, if the workers compensation insurance company has presented a settlement offer to the employee before the employee's attorney has presented a settlement offer to the insurance company, then the employee has already waited too long, because the insurance company has already set its settlement parameters and determined its settlement value before even hearing the side of the employee.

So the employee's attorney should always present a settlement offer to the insurance company first.

And, an injured employee has also waited too long if the employee has already recovered, or has already begun vocational rehabilitation, or has already found another job.

When is It Too Late to Settle a Workers Compensation Claim? 

Technically, unless the time limits (or prescription periods) run out on an injured employee, it is usually never too late to settle a Louisiana workers compensation claim.

However, in the course of a Louisiana workers compensation claim, it often can become too late to settle a claim for maximum value.

Generally speaking, over time the settlement value of a Louisiana workers compensation claim forms the shape of an arch; after the accident, the settlement value will generally increase over time, gradually hit a peak maximum value, and then gradually decrease until it hits little or nothing.

So again, it often can become too late to settle a claim for maximum value.

Generally speaking, if the workers compensation insurance company has presented a settlement offer to the employee before the employee's attorney has presented a settlement offer to the insurance company, then the employee has already waited too long.

Or, if an injured employee has mostly recovered from his or her disability, then the employee has already waited too long.

Or, if an injured employee has been released to return to work, then the employee has probably already waited too long.

Also, an injured employee has definitely waited too long if:

    1. The employee has begun vocational rehabilitation;
    2. The employee has undergone a Functional Capacity Evaluation (FCE);
    3. A Labor Market Survey has been performed for the employee; or
    4. The workers compensation insurance company has reduced or eliminated the employee's lost wage (indemnity) benefits.

But again, in all of these scenarios, an injured employee can still settle his or her workers compensation claim; however, the employee has waited too long to settle the claim for maximum value.

Settlement Timing and Maximum Medical Improvement

An excellent time to attempt a workers compensation settlement is after the injured employee has completed medical treatment and the employee's treating physician determines that the employee has reached a condition known as at Maximum Medical Improvement (MMI).

In fact, in a Louisiana workers compensation claim, settlement most frequently occurs once a determination of Maximum Medical Improvement has been made by the injured employee's treating physician.

Again, Maximum Medical Improvement means that the injured worker's medical condition is generally "as good as it is going to get" and not going to improve.

And because the employee's medical condition is generally not going to improve, both the employee and the workers compensation insurance company should be able to properly evaluate the settlement value of the employee's claim, since both sides should be able to estimate and predict the employee's future lost wage (indemnity) benefits and future medical expenses.

So, once an injured employee reaches Maximum Medical Improvement, the employee's workers compensation claim is prime (or ripe) for settlement. 

But if either the injured employee or the workers compensation insurance company fails to recognize that the employee has reached Maximum Medical Improvement, then unnecessary costs, expenses and time can be added to a workers compensation claim.

And on the flip side, settling an employee's workers compensation claim too soon is rarely in an injured worker's interest, because the workers compensation insurance company at that point will assume that the employee needs little to no more medical treatment, and thus will undervalue the employee's claim.

So by settling a claim too early (which usually means for too little an amount), the injured worker could be left uncompensated for future medical expenses, which the employee will likely have to pay for out-of-pocket, without any opportunity to reopen his or her claim.

But at the same time, an injured employee should always be proactive regarding settlement negotiations and should never wait for the workers compensation insurance company to make the first move when it comes to settling a workers compensation claim.  

For these reasons, an injured worker should always be represented by an experienced licensed workers compensation attorney, especially prior to any settlement negations.

Nonetheless, a determination of Maximum Medical Improvement remains a very important event in the course of any Louisiana workers compensation claim, and the injured employee and the employee's attorney must recognize this determination as a prime opportunity to reach a full and final settlement with the workers compensation insurance company.

The Employee Should Always Hire an Experienced Workers Compensation Attorney Before a Settlement in Louisiana Workers Compensation

As stated above, an injured employee should always hire an experienced Louisiana workers compensation attorney to handle his or her settlement.

Again, not only will the attorney be able to obtain much more money for the employee even after a 20% attorney's fee, but the attorney will handle everything and provide the employee with peace of mind that everything was handled properly in order to maximize the employee's settlement amount.

An experienced Louisiana workers compensation attorney can maximize the amount that the injured worker will receive in settlement through a number of ways, including:

    1. Timing the settlement properly;
    2. Determining the true value of a claim;
    3. Using skillful negotiation tactics; and
    4. Properly handling a mediation.

An Experienced Attorney Knows How to Time a Settlement for Maximum Recovery 

Timing a workers compensation settlement is extremely important in order to maximize the employee's settlement amount, and really the only way that an injured employee can properly time a settlement is to retain an experienced Louisiana workers compensation attorney to handle his or her settlement.

From the perspective of an injured employee, it is important to understand that the value of a workers compensation claim continues to steadily decline, unless additional surgeries are required.

In fact, from the point of view of the employee, there is a real incentive to settle at the "optimum" value (or rather as soon as the employee has sufficiently recovered from surgery but not yet returned back to work) in order to maximize the employee's recovery, due to the serious negative effects that vocational rehabilitation can have on the value of a claim.

Nonetheless, it is usually in the best interest of an injured employee to have any recommended surgeries before consideration of settlement, since: 

    1. It can be difficult to accurately estimate the potential cost of a surgery, due to ever-shifting costs of medical facilities, providers, and/or surgical supplies;
    2. It can be difficult to accurately estimate any pharmacy charges necessary for pre-surgery and post-surgery discharge needs; and
    3. It can be difficult to accurately estimate any unforeseen developments and consequences related to the surgery.

Also, the employee's attorney should always present an initial settlement demand to the workers compensation insurance company before the workers compensation insurance company initiates settlement talks, in order to prevent the insurance company from setting the parameters for settlement negotiations.

Once the workers compensation insurance company determines how much an injured employee's claim is worth - and sets insurance "reserves" in that amount - it can be extremely difficult to get the insurance company to change that figure.

And, waiting too long to settle a claim can be a big problem for the employee, because if the employee fully (or mostly) recovers or finds another job, then the workers compensation insurance company can claim that little or no settlement is required.

But settling too early usually means that the injured employee is selling himself or herself short, because likely the full extent of the employee's injuries and disabilities have yet to be demonstrated to the workers compensation insurance company.

But an experienced attorney can present a well timed settlement offer - along with the proper medical evidence and legal claim analysis - in order to recover a maximum settlement for an injured employee.

An Experienced Attorney Can Properly Evaluate a Claim to Determine Its True Settlement Value

One of the most important things an experienced Louisiana workers compensation attorney can do for an injured employee is to provide a thorough and accurate evaluation of the employee's workers compensation claim.

In other words, before settlement negotiations even start (and in order to formulate the best settlement negotiation strategy) the employee's attorney should provide the employee with a specific dollar figure (or range) and inform the employee that this is the value of the employee's workers compensation claim.

The employee's attorney should base this evaluation of the employee's workers compensation claim on the following:

    1. The employee's current medical condition;
    2. The employee's future medical treatment options and expenses;
    3. The employee's future lost wages and ability to return to work;
    4. The employee's vocational rehabilitation status; and
    5. Louisiana workers compensation law.

This evaluation of the employee's workers compensation claim can serve as the basis of a settlement demand, but the amount demanded should always be much higher than the actual value of the claim, so as to leave room for negotiation.

An Experienced Attorney Knows How to Negotiate for a Maximum Settlement

Properly handling the negotiation process is another extremely important service that an experienced Louisiana workers compensation attorney can provide for an injured employee.

Negotiation can be a very tricky process, and really the best way to know how to handle negotiation is through experience and training.

An experienced Louisiana workers compensation attorney will know when and how to initiate the negotiation process, when and how to respond to the counter-offers of the workers compensation insurance company, when and how to "test" the workers compensation insurance company, and when and how to conclude the negotiation process.

And really, an injured employee who tries to handle the negotiation process is almost always leaving a significant amount of money on the table. 

An Experienced Attorney Can Maximize Settlement During a Mediation

A mediation conference in Louisiana workers compensation is an ideal opportunity to obtain a maximum settlement, but usually that maximum settlement can only be obtained at mediation when the mediation is handled properly by an experienced Louisiana workers compensation attorney.

In Louisiana workers compensation, a mediation is an informal meeting of the injured employee (ideally with the injured employee's attorney) and the attorney for the workers compensation insurance company, with a neutral individual - called a mediator - who attempts to resolve the issues that are in dispute.

The mediator is a neutral party and does not take sides; instead the mediator's purpose is to settle the disputed issues, or even the entire claim, without the need for further litigation.

Mediation is voluntary by the parties unless otherwise ordered by the workers compensation Judge.

Mediation is an opportunity for an injured employee to settle his or her disputed issues - or even settle the employee's entire claim - within the Office of Workers Compensation (OWC) system at no cost, or at a private mediation, before those disputed issues go to trial.

However, properly handling the mediation process can be tricky, and involves a great deal of preparation (including a confidential position paper) and negotiation, and therefore should be handled by an experienced Louisiana workers compensation attorney to obtain a maximum settlement for the injured employee.

The Louisiana Statutes for Evaluating Full and Proper Settlement Values in Louisiana Workers Compensation

The primary Louisiana statutes regarding evaluating full and proper settlement values are La. R.S. 23:1021, La. R.S. 23:1221, La. R.S. 23:1225, La. R.S. 23:1271, La. R.S. 23:1272, and La. R.S. 23:1274, which read as follows:

§1021.  Terms Defined 

As used in this Chapter, unless the context clearly indicates otherwise, the following terms shall be given the meaning ascribed to them in this Section:

(13) "Wages" means average weekly wage at the time of the accident. The average weekly wage shall be determined as follows:

(a) Hourly wages.

(i) If the employee is paid on an hourly basis and the employee is employed for forty hours or more, his hourly wage rate multiplied by the average actual hours worked in the four full weeks preceding the date of the accident or forty hours, whichever is greater; or

(ii) If the employee is paid on an hourly basis and the employee was offered employment for forty hours or more but regularly, and at his own discretion, works less than forty hours per week for whatever reason, then, the average of his total earnings per week for the four full weeks preceding the date of the accident; or

(iii) If the employee is paid on an hourly basis and the employee is a part-time employee, his hourly wage rate multiplied by the average actual hours worked in the four full weeks preceding the date of the injury.

(iv) A part-time employee, as defined in R.S. 23:1021(9) and who is employed by two or more different employers in two or more successive employments, shall be entitled to receive benefits as follows:

(aa) If an employee is employed by two or more different employers in two or more successive employments and the employee incurs a compensable injury under the provisions of this Chapter in one of the employments, the employer in whose service the employee was injured shall pay the benefits due the employee as provided in this Chapter.

(bb) If the employee is a part-time employee in one of the successive employments, is injured in that employment, but as a result of the injury also incurs loss of income from other successive employments, that employee shall be entitled to benefits computed by determining wages under the provisions of this Subsection using his hourly rate in employment at the time of injury and using the total hours worked for all employers of the part-time employee, but not to exceed his average, actual weekly hours worked or forty hours weekly, whichever is less.

(v) For an employee in seasonal employment, his annual income divided by fifty-two.

(aa) For purposes of this Subparagraph, seasonal employment shall be any employment customarily operating only during regularly recurring periods of less than forty-four weeks annually.

(bb) If the employee was not engaged in the seasonal employment more than one year prior to the accident, his annual income shall be the average annual income of other employees of the same or most similar class working in the same or most similar employment for the same employer or, in the event that the employee was the only individual engaged in that specific employment, then his annual income shall be the average annual income of other employees of the same or most similar class working for a neighboring employer engaged in the same or similar employment.

(b) Monthly wages. If the employee is paid on a monthly basis, his monthly salary multiplied by twelve then divided by fifty-two.

(c) Annual wages. If the employee is employed at an annual salary, his annual salary divided by fifty-two.

(d) Other wages. If the employee is employed on a unit, piecework, commission, or other basis, his gross earnings from the employer for the twenty-six week period immediately preceding the accident divided by the number of days the employee actually worked for the employer during said twenty-six week period and multiplied by the average number of days worked per week; however, if such an employee has worked for the employer for less than a twenty-six week period immediately preceding the accident, his gross earnings from the employer for the period immediately preceding the accident divided by the number of days the employee actually worked for the employer during said period and multiplied by the average number of days worked per week.

(e) Exceptions. For municipal police officers, additional compensation paid by the state pursuant to R.S. 40:1667.3 shall not be included in the calculation and computation of total salary or average weekly wage to the extent such officer continues to receive such additional compensation during the period of his disability.

(f) Income tax. In the determination of "wages" and the average weekly wage at the time of the accident, no amount shall be included for any benefit or form of compensation which is not taxable to an employee for federal income tax purposes; however, any amount withheld by the employer to fund any nontaxable or tax-deferred benefit provided by the employer and which was elected by the employee in lieu of taxable earnings shall be included in the calculation of the employee's wage and average weekly wage including but not limited to any amount withheld by the employer to fund any health insurance benefit provided by the employer and which was elected by the employee in lieu of taxable earnings shall be included in the calculation of the employee's wage and average weekly wage.

(g) Date of accident. In occupational disease claims the date of the accident for purposes of determining the employee's average weekly wage shall be the date of the employee's last employment with the employer from whom benefits are claimed or the date of his last injurious exposure to conditions in his employment, whichever date occurs later.

§1221. Temporary total disability; permanent total disability; supplemental earnings benefits; permanent partial disability; schedule of payments

Compensation shall be paid under this Chapter in accordance with the following schedule of payments:

(1) Temporary total.

(a) For any injury producing temporary total disability of an employee to engage in any self-employment or occupation for wages, whether or not the same or a similar occupation as that in which the employee was customarily engaged when injured, and whether or not an occupation for which the employee at the time of injury was particularly fitted by reason of education, training, or experience, sixty-six and two-thirds percent of wages during the period of such disability.

(b) For purposes of Subparagraph (1)(a) of this Paragraph, compensation for temporary disability shall not be awarded if the employee is engaged in any employment or self-employment regardless of the nature or character of the employment or self-employment including but not limited to any and all odd-lot employment, sheltered employment, or employment while working in any pain.

(c) For purposes of Subparagraph (1)(a) of this Paragraph, whenever the employee is not engaged in any employment or self-employment as described in Subparagraph (1)(b) of this Paragraph, compensation for temporary total disability shall be awarded only if the employee proves by clear and convincing evidence, unaided by any presumption of disability, that the employee is physically unable to engage in any employment or self-employment, regardless of the nature or character of the employment or self-employment, including but not limited to any and all odd-lot employment, sheltered employment, or employment while working in any pain, notwithstanding the location or availability of any such employment or self-employment.

(d) An award of benefits based on temporary total disability shall cease when the physical condition of the employee has resolved itself to the point that a reasonably reliable determination of the extent of disability of the employee may be made and the employee's physical condition has improved to the point that continued, regular treatment by a physician is not required.

(2) Permanent total.

(a) For any injury producing permanent total disability of an employee to engage in any self-employment or occupation for wages, whether or not the same or a similar occupation as that in which the employee was customarily engaged when injured, and whether or not an occupation for which the employee at the time of injury was particularly fitted by reason of education, training, and experience, sixty-six and two-thirds percent of wages during the period of such disability.

(b) For purposes of Subparagraph (2)(a) of this Paragraph, compensation for permanent total disability shall not be awarded if the employee is engaged in any employment or self-employment regardless of the nature or character of the employment or self-employment including but not limited to any and all odd-lot employment, sheltered employment, or employment while working in any pain.

(c) For purposes of Subparagraph (2)(a) of this Paragraph, whenever the employee is not engaged in any employment or self-employment as described in Subparagraph (2)(b) of this Paragraph, compensation for permanent total disability shall be awarded only if the employee proves by clear and convincing evidence, unaided by any presumption of disability, that the employee is physically unable to engage in any employment or self-employment, regardless of the nature or character of the employment or self-employment, including, but not limited to, any and all odd-lot employment, sheltered employment, or employment while working in any pain, notwithstanding the location or availability of any such employment or self-employment.

(d) Notwithstanding any judgment or determination that an employee is permanently and totally disabled, if such employee subsequently has or receives any earnings, including, but not limited to, earnings from odd-lot employment, sheltered employment, or employment while working in any pain, such employee shall not receive benefits pursuant to this Paragraph but may receive benefits computed pursuant to Paragraph (3) of this Section, if applicable.

(e) The issue of permanent total disability provided herein shall not be adjudicated or determined while the employee is engaged in employment pursuant to R.S. 23:1226(G), but such employment shall not prevent adjudication or determination of the employee's right to any other benefits otherwise provided in this Chapter; however, the employee shall not by virtue of employment pursuant to R.S. 23:1226(G) be deprived of the right to determination or adjudication of permanent total disability herein at a time when he is not engaged in such employment.

(3) Supplemental earnings benefits.

(a)(i) For injury resulting in the employee's inability to earn wages equal to ninety percent or more of wages at time of injury, supplemental earnings benefits, payable monthly, equal to sixty-six and two-thirds percent of the difference between the average monthly wages at time of injury and average monthly wages earned or average monthly wages the employee is able to earn in any month thereafter in any employment or self-employment, whether or not the same or a similar occupation as that in which the employee was customarily engaged when injured and whether or not an occupation for which the employee at the time of the injury was particularly fitted by reason of education, training, and experience, such comparison to be made on a monthly basis. Average monthly wages shall be computed by multiplying his wages by fifty-two and then dividing the product by twelve.

(ii) When the employee is entitled to monthly supplemental earnings benefits pursuant to this Subsection, but is not receiving any income from employment or self-employment and the employer has not established earning capacity pursuant to R.S. 23:1226, payments of supplemental earning benefits shall be made in the manner provided for in R.S. 23:1201(A)(1).

(b) For purposes of Subparagraph (3)(a), of this Paragraph, the amount determined to be the wages the employee is able to earn in any month shall in no case be less than the sums actually received by the employee, including, but not limited to, earnings from odd-lot employment, sheltered employment, and employment while working in any pain.

(c)(i) Notwithstanding the provisions of Subparagraph (b) of this Paragraph, for purposes of Subparagraph (a) of this Paragraph, if the employee is not engaged in any employment or self-employment, as described in Subparagraph (b) of this Paragraph, or is earning wages less than the employee is able to earn, the amount determined to be the wages the employee is able to earn in any month shall in no case be less than the sum the employee would have earned in any employment or self-employment, as described in Subparagraph (b) of this Paragraph, which he was physically able to perform, and (1) which he was offered or tendered by the employer or any other employer, or (2) which is proven available to the employee in the employee's or employer's community or reasonable geographic region.

(ii) For purposes of Subsubparagraph (i) of this Subparagraph, if the employee establishes by clear and convincing evidence, unaided by any presumption of disability, that solely as a consequence of substantial pain, the employee cannot perform employment offered, tendered, or otherwise proven to be available to him, the employee shall be deemed incapable of performing such employment.

(d) The right to supplemental earnings benefits pursuant to this Paragraph shall in no event exceed a maximum of five hundred twenty weeks, but shall terminate:

(i) As of the end of any two-year period commencing after termination of temporary total disability, unless during such two-year period supplemental earnings benefits have been payable during at least thirteen consecutive weeks; or

(ii) After receipt of a maximum of five hundred twenty weeks of benefits, provided that for any week during which the employee is paid any compensation under this Paragraph, the employer shall be entitled to a reduction of one full week of compensation against the maximum number of weeks for which compensation is payable under this Paragraph; however, for any week during which the employee is paid no supplemental earnings benefits, the employer shall not be entitled to a reduction against the maximum number of weeks payable under this Paragraph; or

(iii) When the employee retires; however, the period during which supplemental earnings benefits may be payable shall not be less than one hundred four weeks.

(e)(i) The fact that an employee has suffered previous disability, impairment, or disease, or received compensation therefor, shall not preclude him from receiving benefits for a subsequent injury or preclude benefits for death resulting therefrom.

(ii) If an employee receiving supplemental earnings benefits suffers a subsequent injury causing the payment of temporary total disability, permanent total disability, or supplemental earnings benefits, the combined benefits payable shall not exceed the maximum compensation rate in effect for temporary total disability at the time of the subsequent injury. Any reduction in benefits due to such limit shall be applied first to the supplemental earnings benefits payable as a result of the prior injury.

(f) Any compensable supplemental earnings benefits loss shall be reported by the employee to the insurer or self-insured employer within thirty days after the termination of the week for which such loss is claimed. The assistant secretary shall provide by rule for the reporting of supplemental earnings benefits loss by the injured worker and for the reporting of supplemental earnings benefits and payment of supplemental earnings benefits by the employer or insurer to the office and may prescribe forms for such reporting. The office, upon request by the employer or insurer, shall provide verification through unemployment compensation records under the Louisiana Employment Security Law of any claimed supplemental earnings benefits loss and shall obtain such verification from other states, if applicable.

(g) When an injured employee has been released to return to work with or without restrictions, and the employer maintains an established written and promulgated substance abuse policy which requires employer-administered drug testing prior to employment or return to work, upon the employee's failure to meet the requirements of such employer's established policy and inability to qualify for the position for that reason, the obligation for all benefits pursuant to this Chapter, with the sole exception of the obligation to provide reasonable and necessary medical treatment, shall be terminated and the employee shall be subject to the terms and conditions established in the employer's promulgated drug testing policy and program. The provisions of this Subparagraph shall not apply to prescription medication prescribed for the employee in the dosages so prescribed by a physician.

(4) Permanent partial disability. In the following cases, compensation shall be solely for anatomical loss of use or amputation and shall be as follows:

(a) For the loss of a thumb, sixty-six and two-thirds percent of wages during fifty weeks.

(b) For the loss of a first finger, commonly called the index finger, sixty-six and two-thirds percent of wages during thirty weeks.

(c) For the loss of any other finger, or a big toe, sixty-six and two-thirds percent of wages during twenty weeks.

(d) For the loss of any toe, other than a big toe, sixty-six and two-thirds percent of wages during ten weeks.

(e) For the loss of a hand, sixty-six and two-thirds percent of wages during one hundred fifty weeks.

(f) For the loss of an arm, sixty-six and two-thirds percent of wages during two hundred weeks.

(g) For the loss of a foot, sixty-six and two-thirds percent of wages during one hundred twenty-five weeks.

(h) For the loss of a leg, sixty-six and two-thirds percent of wages during one hundred seventy-five weeks.

(i) For the loss of an eye, sixty-six and two-thirds percent of wages during one hundred weeks.

(j) Loss of both hands, or both arms, or both feet, or both legs, or both eyes, or one hand and one foot, or any of two thereof, or paraplegia, or quadriplegia shall, in the absence of conclusive proof of a substantial earning capacity, constitute permanent total disability.

(k) The loss of the first phalanx of the thumb or big toe, or two phalanges of any finger or toe, shall be considered to be equal to the loss of one-half of such member, and the compensation shall be one-half of the amount above specified.

(l) The loss of more than one phalanx of a thumb, or more than two phalanges of any finger or toe shall be considered as the loss of the entire member; provided, however, that in no case shall the amount received for more than one finger exceed the amount provided in this schedule for the loss of a hand, or the amount received for the loss of more than one toe exceed the amount provided in this schedule for the loss of a foot.

(m) Amputation between the elbow and the wrist shall be considered as equivalent to the loss of a hand and amputation between the knee and the ankle shall be equivalent to the loss of a foot.

(n) A permanent total anatomical loss of the use of a member is equivalent to the amputation of the member.

(o) In all cases involving a permanent partial anatomical loss of use or amputation of the members mentioned hereinabove, compensation shall bear such proportion to the number of weeks provided for herein for the total loss of such members as the percentage loss or impairment to such members bears to the total loss of the member, provided that in no case shall compensation for an injury to a member exceed the compensation payable for the loss of such member.

(p) In cases not falling within any of the provisions already made, where the employee is seriously and permanently disfigured or suffers a permanent hearing loss solely due to a single traumatic accident, or where the usefulness of the physical function of the respiratory system, gastrointestinal system, or genito-urinary system, as contained within the thoracic or abdominal cavities, is seriously and permanently impaired, compensation not to exceed sixty-six and two-thirds percent of wages for a period not to exceed one hundred weeks may be awarded. In cases where compensation is so awarded, when the disability is susceptible to percentage determination, compensation shall be established in the proportions set forth in Subparagraph (o) of this Paragraph. In cases where compensation is so awarded, when the disability is not susceptible to percentage determination, compensation as is reasonable shall be established in proportion to the compensation hereinabove specifically provided in the cases of specific disability.

(q) No benefits shall be awarded or payable in this Paragraph unless the percentage of the anatomical loss of use or amputation, as provided in Subparagraphs (a) through (o) of this Paragraph or the percentage of the loss of physical function as provided in Subparagraph (p) or (s) of this Paragraph is as established in the most recent edition of the American Medical Association's "Guides to the Evaluation of Permanent Impairment".

(r)(i) In all claims for inguinal hernia, it must be established by a preponderance of the evidence that the hernia resulted from injury by accident arising out of and in the course and scope of employment; that the accident was reported promptly to the employer, and that the employee was attended by a licensed physician within thirty days thereafter.

(ii) If the employee submits to treatment, including surgery, recommended by a competent physician or surgeon, the employer or insurer shall pay compensation benefits as elsewhere fixed by this Chapter.

(iii) If the employee refuses to submit to such recommended treatment, including surgery, and establishes by a preponderance of the evidence that his refusal is based upon his conscientious religious objection thereto or that such recommended treatment, including surgery, involves an unusual and serious danger to him, the employer or insurer shall pay compensation benefits as elsewhere fixed by this Chapter. In all other cases of the employee's refusal to submit to such recommended treatment, including surgery, the employer shall provide all necessary first aid and medical treatment and supply the necessary truss, support, or other mechanical appliance at a total cost not in excess of six hundred dollars. In addition, the employer shall pay compensation for a period not to exceed twenty-six weeks.

(iv) Recurrence of the hernia following surgery shall be considered as a separate hernia, and the provisions and limitations of this Subparagraph shall apply.

(s)(i) In addition to any other benefits to which an injured employee may be entitled under this Chapter, any employee suffering an injury as a result of an accident arising out of and in the course and scope of his employment shall be entitled to a sum of fifty thousand dollars, payable within one year after the date of the injury. Interest on such payment shall not commence to accrue until after it becomes payable. Such payment shall not be subject to any offset for payment of any other benefit under this Chapter. Such payment shall not be subject to a claim for attorney fees; however, attorney fees may be awarded in a claim to collect such payment pursuant to R.S. 23:1201.2.

(ii) In any claim for an injury, it must be established by clear and convincing evidence that the employee suffers an injury and that such resulted from an accident arising out of and in the course and scope of his employment. Nothing herein shall limit the right of any party to obtain a second medical opinion or, in appropriate cases, the opinion of an additional medical opinion medical examiner pursuant to R.S. 23:1123.

(iii) Only the following injuries shall be considered injuries for which benefits pursuant to this Subparagraph may be claimed:

(aa) Paraplegia or quadriplegia or the total anatomical loss of both hands, or both arms, or both feet, or both legs, or both eyes, or one hand and one foot, or any of two thereof; however, functional loss or loss of use shall not constitute anatomical loss.

(bb) Third degree burns of forty percent or more of the total body surface.

(iv) Notwithstanding the provisions of R.S. 23:1291.1 and 1377, any benefit paid pursuant to this Subparagraph shall be reported to the office separately from any other benefit paid pursuant to this Chapter and shall not be subject to assessment by the office or by the Louisiana Workers' Compensation Second Injury Board.

(v) Repealed by Acts 2006, No. 494, §1.

Amended by Acts 1996, 1st Ex. Sess., No. 31, §1, eff. May 1, 1996; Acts 1997, No. 1172, §4, eff. June 30, 1997; Acts 1999, No. 444, §1, eff. June 18, 1999; Acts 1999, No. 702, §1; Acts 1999, No. 776, §1; Acts 2001, No. 522, §1; Acts 2001, No. 1014, §1, eff. June 27, 2001; Acts 2001, No. 1070, §1; Acts 2003, No. 306, §1; Acts 2006, No. 494, §1; Acts 2012, No. 860, §1; Acts 2017, No. 381, §2, eff. June 23, 2017.

§1225.  Reductions when other benefits payable

A.  The benefits provided for in this Subpart for injuries producing permanent total disability shall be reduced when the person receiving benefits under this Chapter is entitled to and receiving benefits under 42 U.S.C. Chapter 7, Subchapter II, entitled Federal Old Age, Survivors, and Disability Insurance Benefits, on the basis of the wages and self-employment income of an individual entitled to and receiving benefits under 42 U.S.C. §423; provided that this reduction shall be made only to the extent that the amount of the combined federal and workers' compensation benefits would otherwise cause or result in a reduction of the benefits payable under the Federal Old Age, Survivors, and Disability Insurance Act pursuant to 42 U.S.C. §424a, and in no event will the benefits provided in this Subpart, together with those provided under the federal law, exceed those that would have been payable had the benefits provided under the federal law been subject to reduction under 42 U.S.C. §424a.  However, there shall be no reduction in benefits provided under this Section for the cost-of-living increases granted under the federal law after the date of the employee's injury.

B.  No compensation benefits shall be payable for temporary or permanent total disability or supplemental earnings benefits under this Chapter for any week in which the employee has received or is receiving unemployment compensation benefits.

C.(1)  If an employee receives remuneration from:

(a)  Benefits under the Louisiana Workers' Compensation Law.

(b)  Repealed by Acts 2003, No. 616, §1.

(c)  Benefits under disability benefit plans in the proportion funded by an employer.

(d)  Any other workers' compensation benefits, then compensation benefits under this Chapter shall be reduced, unless there is an agreement to the contrary between the employee and the employer liable for payment of the workers' compensation benefit, so that the aggregate remuneration from Subparagraphs (a) through (d) of this Paragraph shall not exceed sixty-six and two-thirds percent of his average weekly wage.

(2)  Notwithstanding the provisions of Paragraph (1) of this Subsection, benefits payable for injury to an employee under this Chapter shall not be reduced by the receipt of benefits under this Chapter or any other laws for injury or death sustained by another person.

(3)  If an employee is receiving both workers' compensation benefits and disability benefits subject to a plan providing for reduction of disability benefits, the reduction of workers' compensation benefits required by Paragraph (1) of this Subsection shall be made by taking into account the full amount of employer funded disability benefits, pursuant to plan provisions, before any reduction of disability benefits are made.

(4)  If a conflict arises between the application of the provisions of this Section and those of any other Louisiana law or contract of insurance, the provisions of this Section shall control.

D.  Repealed by Acts 2004, No. 561, §1.

Added by Acts 1978, No. 750, §1; Acts 1983, 1st Ex. Sess., No. 1, §1, eff. July 1, 1983; Acts 1985, No. 926, §1, eff. Jan. 1, 1986; Acts 1989, No. 454, §§6, 10, eff. Jan. 1, 1990; Acts 1991, No. 469, §1; Acts 1993, No. 928, §2, eff. June 25, 1993; Acts 1995, No. 1284, §2; Acts 2003, No. 616, §1; Acts 2004, No. 561, §1.

§1271.  Right of parties to settle or compromise

A.  It is stated policy for the administration of the workers' compensation system of this state that it is in the best interest of the injured worker to receive benefit payments on a periodic basis.  A lump sum payment or compromise settlement in exchange for full and final discharge and release of the employer, his insurer, or both from liability under this Chapter shall be allowed only:

(1)  Upon agreement between the parties, including the insurer's duty to obtain the employer's consent;

(2)  When it can be demonstrated that a lump sum payment is clearly in the best interests of the parties; and

(3)  Upon the expiration of six months after termination of temporary total disability.  However, such expiration may be waived by consent of the parties.

B.  As used in this Part, "parties" means the employee or his dependent and the employer or his insurer.  Nothing in this Section shall require the office of risk management to obtain approval of settlements from the employing state agency, department, council, board, or political subdivision.

Amended by Acts 1954, No. 724, §1; Acts 1966, No. 181, §1.  Acts 1983, 1st Ex. Sess., No. 1, §1, eff. July 1, 1983; Acts 1991, No. 892, §1; Acts 1997, No. 60, §1, eff. June 11, 1997.

§1272.  Approval of lump sum or compromise settlements by the workers' compensation judge

A.  A lump sum or compromise settlement entered into by the parties under R.S. 23:1271 shall be presented to the workers' compensation judge for approval through a petition signed by all parties and verified by the employee or his dependent, or by recitation of the terms of the settlement and acknowledgment by the parties in open court which is capable of being transcribed from the record of the proceeding.

B.  When the employee or his dependent is represented by counsel, and if attached to the petition presented to the workers' compensation judge are affidavits of the employee or his dependent and of his counsel certifying each one of the following items: (1)  the attorney has explained the rights of the employee or dependent and the consequences of the settlement to him; and (2)  that such employee or dependent understands his rights and the consequences of entering into the settlement, then the workers' compensation judge shall approve the settlement by order, and the order shall not thereafter be set aside or modified except for fraud or misrepresentation made by any party.

C.  When the employee or his dependent is not represented by counsel, the workers' compensation judge shall determine whether the employee or his dependent understands the terms and conditions of the proposed settlement, and shall approve it by order, unless he finds that it does not provide substantial justice to all parties, and the order shall not thereafter be set aside or modified except for fraud or misrepresentation made by any party.

D.  If a suit has been filed against a third party pursuant to the provisions of R.S. 23:1101, the district court hearing the third-party suit shall, in addition to a workers' compensation judge, have the authority to approve a lump sum or compromise settlement of the workers' compensation claim under the same conditions and terms set forth in this Section for approval of such settlements by a workers' compensation judge, and such authority shall include approval and establishment of the credit due the employer.  The fees of the attorney representing the employee in the workers' compensation matter shall be approved by the district court judge.

E.  All compensable medical expenses incurred prior to the date of the settlement shall be paid by the payor unless the terms of the settlement specifically provide otherwise.

Acts 1992, No. 769, §1; Acts 1995, No. 1137, §1, eff. June 29, 1995; Acts 1997, No. 88, §1, eff. June 11, 1997; Acts 1999, No. 776, §1; Acts 2001, No. 1014, §1, eff. June 27, 2001; Acts 2005, No. 257, §1.

§1274. Lump sum settlements; necessity for approval

A. The amounts payable as compensation may be commuted to a lump sum settlement by agreement if approved by the workers' compensation judge as provided in this Part. In a lump sum settlement, the payments due the employee or his dependents shall not be discounted at a greater rate than eight percent per annum.

B. If the lump sum settlement is made without the approval of the workers' compensation judge, or at a discount greater than eight percent per annum, even if approved by the assistant secretary or the workers' compensation judge, the employer shall be liable for compensation at one and one-half times the rate fixed by this Chapter. At any time within two years after date of the payment of the lump sum settlement and notwithstanding any other provision of this Chapter, the claimant shall be entitled to demand and receive in a lump sum from the employer such additional payment as together with the amount already paid, will aggregate one and one-half times the compensation which would have been due but for such lump sum settlement.

C. Upon payment of a lump sum settlement commuted on a term agreed upon by the parties, approved by the workers' compensation judge, and discounted at not more than eight percent per annum, the liability of the employer or his insurer making the payment shall be fully satisfied.

D. For the settlement of compensation claims as provided in R.S. 23:1231 through 1236 the following procedure shall be followed. The claimant must present to the employer an affidavit of death of the employee, proper proof of the claimant's relationship to the deceased and his legal right to the compensation benefits. Such documentation shall be affixed to the joint petition and submitted to the workers' compensation judge for approval as hereinabove provided.

Acts 1977, No. 40, §1; Acts 1982, No. 611, §1; Acts 1983, 1st Ex. Sess., No. 1, §1, eff. July 1, 1983; Acts 1988, No. 938, §1, eff. July 1, 1989; Acts 1989, No. 23, §1, eff. June 15, 1989; Acts 1989, No. 260, §1, eff. Jan. 1, 1990; Acts 1997, No. 88, §1, eff. June 11, 1997.

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