Detailed Answer
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a licensed attorney to discuss your specific situation.
1. Understand the Two Coverages
In Washington, workers’ compensation (RCW 51) covers work-related injuries and provides medical care and wage replacement. A personal injury claim covers negligence by a third party. When both apply, coordinating benefits ensures you don’t recover twice for the same loss, while preserving your full legal rights.
2. Recognize the Insurer’s Subrogation and Lien Rights
Under RCW 51.24.060, your workers’ comp insurer has a lien on any third-party recovery up to the amount it paid for your medical bills and wage benefits. You must reimburse the insurer from your settlement or judgment.
3. Calculate the Lien Amount
- Gather all compensation benefit statements from the insurer.
- Sum medical payments and wage-loss benefits directly related to the injury.
- Exclude non-reimbursable items such as vocational rehab or death benefits.
4. Allocate Your Settlement
Work with your attorney to break down the gross settlement into categories: medical expenses, lost wages, and pain & suffering. Proper allocation can reduce the insurer’s recoverable portion, since subrogation attaches only to benefits already paid.
5. Negotiate With the Insurer
Often insurers will accept a percentage of their lien rather than the full amount. You can:
- Propose a pro-rata sharing of attorney fees and costs.
- Argue that certain damages (e.g., future pain & suffering) fall outside the lien.
6. Complete Reimbursement and File Documentation
Once you settle your case, pay the agreed lien amount to your insurer. Then file a satisfaction of lien with the Department of Labor & Industries to clear your title to any remaining proceeds.
7. Review Third-Party Settlement Statute
RCW 51.32.210 governs employer and insurer rights in third-party actions. See RCW 51.32.210 for timing and notice requirements.
Helpful Hints
- Notify your workers’ comp insurer early about the third-party claim.
- Keep detailed records of all comp benefits and medical bills.
- Ask your attorney to prepare a joint stipulation of method of allocation.
- Confirm your insurer’s lien amount in writing before settlement.
- Factor in attorney fees and court costs when negotiating the lien.
- File lien satisfaction promptly to avoid future collection efforts.