What Happens if I Drop My Workers’ Comp Case?

Dropping your workers’ compensation case may jeopardize the coverage you need for a workplace injury. While you might be able to restart your claim later, you will be at a significant setback and may miss out on the full benefits you need.

Before making a decision concerning your claim, it is strongly recommended that you consult with an experienced attorney. Your lawyer can review the reasons you wish to cancel your case, evaluate the nature of your injuries, and advise you as to the legal benefits of pursuing the claim versus the risks of closing it. Count on the dedicated team at Pond Lehocky Giordano to advise you.

Common Reasons Why Employers Cancel a Workers’ Comp Policy

Employers do not always keep their workers’ compensation policies and have various reasons for terminating them. What follows are a few of the most common explanations for a canceled policy:

• Changing insurance carriers: Some employers are not happy with the premiums, coverage, customer service, or other aspects of their current workers’ comp insurance provider. However, if they decide to cancel too early in the policy, a potentially significant penalty may apply.
• Closures, mergers, and acquisitions: A company that decides to permanently close its doors will not need to keep an active workers’ comp policy. A merger or acquisition, meanwhile, will bring the need for a new policy.
• Assigned risk to standard carrier coverage: Not all businesses can find suitable coverage in the standard market and may opt for an expensive assigned risk policy (funded by the state). Eventually, the opportunity may arise to move to a less costly and overall better standard market policy.
• Failure to pay the premium: In this situation, it is the insurance carrier that cancels the policy due to missed premium payments. The insurer will send a note that warns of the impending cancellation, allowing the insured to catch up on payments and maintain coverage.
• Making a material misrepresentation: Depending on the state and the policy, the workers’ comp insurer may have the right to cancel the policy if the insured made a material misrepresentation in obtaining coverage. As with all cancellations, the insurer must provide a written explanation of its decision.

How Do You Drop a Workers’ Comp Claim?

To drop a workers’ compensation claim, the injured employee can write a letter to their employer and the insurance company. The worker can state their desire to withdraw the claim but is not required to give a reason for doing so. The worker should then wait 30 days for a response. If none is received, it may be necessary to take further action such as filing a motion with the court (assuming the claim has made it this far).

Can You Get Both Workers’ Comp and a Personal Injury Settlement?

You have the right to receive both a workers’ compensation and personal injury settlement, depending on the nature of the accident. This is the case when non-employer third parties are responsible for causing harm to the employee.

For example, an employee is driving a company vehicle within the scope of their job duties when a negligent driver crashes into them. The injured worker may be able to seek workers’ compensation coverage from the employer (e.g. for partial lost wage replacement) and also file a lawsuit against the driver (to pay for losses not covered under the workers’ comp policy).

You should understand that the workers’ comp insurer may have the right to subrogation, which means either receiving reimbursement for benefits it paid to the worker or even taking over the personal injury claim. Speak with a knowledgeable workers’ comp attorney to ensure you receive the maximum coverage to which the law entitles you.

How Much Will I Get if I Close My Case?

If you decide to close your claim, you may be able to work out a settlement with the insurer that still fairly compensates you. This settlement, also called a stipulated agreement, will allow the insurer to terminate the claim and have no further obligation to pay you. In return, the insurance company will pay the worker an additional amount of money, on top of benefits already paid, to close out the claim.

Work with an attorney to negotiate a fair end to your case if you have decided to go this route.

Can You Re-Open a Workers Comp Case You’ve Closed?

Yes, in some cases, you have the right to re-open a workers’ compensation claim you previously closed. It may be possible, for example, if your medical condition has worsened since you terminated the claim or new evidence has emerged regarding it. However, this is a complex process that will vary in difficulty from one state to another.

Speak with a skilled workers’ comp attorney for assistance.

Will Dropping My Workers’ Comp Case Affect My Ability to Get Treatment?

Terminating your workers’ comp case may make it harder to get the treatment you need to improve. When you decide to close your case, the workers’ comp insurer will request that you sign a release that waives further claims and benefits. Depending on the nature of this release, you could jeopardize crucial medical treatments or end up having to pay out of pocket for them.

Consult an attorney before signing anything from the workers’ comp insurer.

What Is MMI?

MMI stands for maximum medical improvement. It is the point at which a treating physician believes that additional medical treatments will not improve the injured worker’s condition.

Once a doctor has determined that MMI is reached, the insurance carrier is typically no longer required to cover additional treatments. However, the worker may be able to contest the MMI determination.

There is an exception to MMI cutting off further treatments, which applies if the employer has been found liable for covering the injured worker for the rest of their life. Even after MMI, the employer will have to pay out benefits.

Will Dropping My Workers’ Comp Case Affect My Ability to Get Work?

Because you have the legal right to file for and collect workers’ compensation, your case should not affect your future employment prospects. Employers cannot penalize you for exercising your rights by denying your ability to work. Of course, this does not mean that a company will not try to do so. Talk to our legal team if you believe you are facing unfair retaliation for claiming workers’ comp.

How Does a Workers’ Comp Case Affect Disability Benefits?

Dropping a workers’ compensation claim can affect disability benefits (also known as Social Security Disability Insurance or SSDI). The Social Security Administration uses a formula that offsets the amount that a worker receives in workers’ comp from their SSDI benefits. But the offset is not an even dollar-for-dollar trade.

If a worker’s SSDI and workers’ comp benefits amount to more than 80% of the worker’s pre-disability income, Social Security will reduce your benefits to get back down to the 80% threshold. This means that settling and effectively ending your case can have a disproportionate effect on your SSDI since the target is 80%, not 100%, of what you earned before the disabling condition.

Is There a Deadline for Dropping My Workers’ Comp Case?

There is no deadline for dropping the case, but there is one for reopening it. Many workers close their workers’ comp cases only to discover later that their condition has worsened.

The worker may be able to reopen the claim, but there is a time limit, usually around three years. It is recommended that you take action immediately if your injuries worsen.

If You Need Help with Your Workers’ Comp Case, Contact a Lawyer

Workers’ compensation is complicated, and the rules surrounding closures, canceled policies, and reviving benefits may add to a worker’s confusion. Fortunately, if you were injured on the job, you do not have to fight for benefits on your own. Trust the seasoned workers’ comp attorneys of Pond Lehocky Giordano.

Contact us to schedule your consultation and start exploring your legal options today. You can reach us at 1-800-568-5700.