When an injured Californian is ready to settle their workers’ compensation claim, they may be given two options: a “stipulated” award or a “compromise and release.” Both resolve the claim, but they have very different consequences.
What’s the right choice? The answer to this question generally depends on your medical condition, financial need and future plans. Before you accept either settlement offer, you need to understand the pros and cons of each.
How does each award work?
With a stipulated award, you and the claims administrator must agree on the amount of permanent or temporary disability benefits you are still owed. Once that is established, the amount is paid at a weekly installment rate (usually distributed in biweekly checks or deposits) until fully paid. That can be a matter of a few months, if your condition is temporary or fairly minor, to many years, if your injuries are serious or disability is permanent.
In addition, a stipulated award usually allows you the option of future medical care for your work-related injuries, so long as the treatments are reasonably necessary. This may be critically important if you expect to need ongoing doctor visits, therapy, surgery or other healthcare. However, you will generally still be subject to the same provider networks and other rules that govern other workers’ comp claims.
In comparison, a compromise and release (C&R) closes the claim completely. Once you and the claims administrator agree upon a figure, which typically includes anticipated future medical care, the entire settlement amount will be paid in a lump sum. However, you then become responsible for your own medical needs, even if the cost of your care ultimately exceeds the amount included in the C&R.
A stipulated award may be preferable when an injury is likely to require substantial ongoing care. A compromise and release may make more sense when the employee understands the likely future costs and values flexibility or a clean break from the workers’ compensation system. In general, it’s a decision that should be made in consultation with a skilled attorney.