By IFAwebnews  – July, 11, 2012          

Lump-sum payments in workers’ comp cases don’t halt return to work

Lump-sum settlements paid in workers’ compensation cases appear to encourage people to return to work, according to a new study.

The Workers Compensation Research Institute’s (WCRI) study, based on the analysis of 2,138 workers in Michigan who were injured in 2004, found that 78% of those injured workers receiving lump-sum settlements did not change their work status. The study tracked them through 2008.

“This is an important study because we need to find out whether settlements discourage return to work for injured workers who want to return to work or assist them in closing this chapter of their life and moving on with their career,” says Bogdan Savych, author and public policy analyst at WCRI.  “My hope is this research will help policymakers and other stakeholders understand how workers respond to receiving a lump-sum settlement.”

Many of those who were employed at the time of the lump sum stayed employed and those who were not employed remained unemployed, researchers found.

Of those injured workers that did change their employment status, 30% who were employed at the time of the lump-sump settlement left work and 19% of those who were not employed at the time of the lump sum attained employment.

On average, more injured workers returned to work after receiving a lump-sum settlement than exited. Average employment in the sample increased from 25% to 32% among workers one year after a settlement.  The exception is older workers who experienced a decline in employment after a settlement, according to the WCRI.

Employers should work hard to get employees back to work immediately after an injury or as soon as possible.  The solution is being on top of RTW.  If the owners of the company have given 100% devotion to the companies return-to-work program then settlements will be reduced significantly.  When I read this study it says “follow the money.”  Just like there are those that abuse workers comp because they get tax free cash staying home, there are those abusers who would like quick, nice settlements to buy a new car. 

Note that employers that have a large number of settlement claims are very likely to see their experience mods rise with NCCI’s new experience rating split point change.  Reduce workers comp premiums with workers compensation recovery.