Lump Sum Comp Settlements Helpful, Study Shows

The Workers Compensation Research Institute released its "Return to Work after a Lump-Sum Settlement" study July 11.

Policymakers wondering whether lump-sum settlements in workers' compensation cases help or hurt the injured workers’ return to work now have evidence suggesting they help. The Cambridge, Mass.-based Workers Compensation Research Institute has published a study, "Return to Work after a Lump-Sum Settlement," supporting that conclusion.

"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. My hope is this research will help policymakers and other stakeholders understand how workers respond to receiving a lump-sum settlement," said Bogdan Savych, the author and a public policy analyst at WCRI.

The study population was 2,138 workers who were injured in Michigan in 2004 and later received a lump-sum settlement, with WCRI following their employment experience through 2008. WRCI said 78 percent of them did not change their employment status. Of those who did change, 30 percent who were employed at the time of the lump-sump settlement left work and 19 percent of those who weren't employed at the time of the settlement did become employed.

"On average, more injured workers returned to work after receiving a lump-sum settlement than exited. Average employment in the sample increased from 25 percent of workers at the time of the lump sum to 32 percent of workers 1 year after a settlement. The exception is older workers who experienced a decline in employment after a settlement," according to WCRI.

For more information about the study or to buy it, visit this website.

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