Detailed Answer
When you suffer a work-related injury in Ohio and receive workers’ compensation benefits, your employer’s insurer gains a legal right—called a lien or subrogation interest—to recover those benefits if you later secure a third-party personal injury settlement. This right originates from Ohio Revised Code §4123.931 and §4123.93.
Here’s how a workers’ compensation lien generally affects your settlement:
- Statutory Basis: Under Ohio Rev. Code §4123.931, an employer or its insurer may assert a lien for compensation it has paid. Ohio Rev. Code §4123.93 grants that lien priority over other claims.
- Notice and Timing: You or your attorney must notify the workers’ compensation carrier before finalizing any third-party settlement. Early notice helps avoid delays and disputes over lien amounts.
- Calculating Reimbursement: The carrier’s reimbursement comes from your share of the recovery only. Ohio law requires the lien to be reduced by the proportion of attorney fees and case expenses. For example, if you settle for $100,000, pay $30,000 in attorney fees and $5,000 in costs, the carrier’s lien applies to the remaining $65,000.
- Negotiating the Lien: You may negotiate or seek a formal lien waiver from the insurer before closing. This step clarifies the exact reimbursement amount and protects your net recovery.
- Net Recovery: After you satisfy the lien and pay attorney fees and costs, you keep the balance. For instance, if the carrier paid $40,000 in benefits and its reduced lien equals $25,000, you would receive the remainder of your settlement net of those amounts.
Helpful Hints
- Notify the workers’ compensation insurer as soon as you file a third-party claim.
- Work with your attorney to review and verify the lien calculation.
- Obtain a written lien waiver or formal release before finalizing any settlement.
- Clarify responsibility for medical liens, future treatment costs, and subrogation.
- Consult a personal injury attorney experienced with Ohio subrogation rules.
Disclaimer: This article provides general information on Ohio law and does not constitute legal advice. Consult a licensed Ohio attorney to discuss your specific situation.