Detailed Answer
Coordinating benefits between a workers’ compensation insurer and a personal injury settlement in Oregon requires understanding subrogation rights, statutory set-offs and settlement allocation. Below is an overview of the key steps under Oregon law.
1. Understand Subrogation Rights
Under Oregon law, if you receive workers’ compensation benefits for an on-the-job injury, your employer or its insurer obtains a subrogation right against any third-party recovery. This means they can claim reimbursement for the benefits already paid. See ORS 656.262.
2. Apply Statutory Set-Off (ORS 656.268)
ORS 656.268 establishes how an insurer’s lien reduces your third-party award. The insurer can recover the full amount of compensation paid, but the repayment is reduced by attorney fees and costs related to the third-party claim. For details, see ORS 656.268.
3. Allocate Your Settlement
Work with your personal injury attorney to divide the settlement into categories such as general damages, lost wages, and medical expenses. Courts and insurers typically respect a reasonable allocation. A clear allocation can minimize disputes with the workers’ compensation insurer.
4. Notify the Workers’ Compensation Insurer
Provide written notice of any third-party claim or settlement to the workers’ compensation insurer as soon as practical. Early notification helps prevent surprises and allows both parties to calculate the lien accurately.
5. Calculate the Repayment Amount
To compute the insurer’s repayment, subtract your third-party attorneys’ fees and costs from the total settlement, then apply that net amount against the insurer’s lien. The result is the amount you must repay. Your attorney should prepare a detailed statement showing these calculations.
6. Finalize and Disburse Funds
Once the insurer agrees to the repayment amount, you can finalize the settlement. The third-party settlement check typically goes into escrow. Your attorney will pay the insurer’s lien directly, then distribute your net recovery.
Helpful Hints
- Review ORS 656.262 and 656.268 for subrogation and set-off rules.
- Keep clear records of all workers’ compensation payments and medical bills.
- Ask your attorney for a lien worksheet to verify the insurer’s calculations.
- Negotiate your attorney’s fee on the third-party claim to maximize your net recovery.
- Request a written release from the insurer once the lien is paid.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney to address your specific situation.