Resolving a Workers’ Compensation Lien on a Personal Injury Claim in Nebraska

Detailed Answer

Under Nebraska law, an employer or its workers’ compensation insurer may assert a lien against any recovery you obtain from a third-party personal injury claim. See Neb. Rev. Stat. § 48-118 (https://nebraskalegislature.gov/laws/statutes.php?statute=48-118). To clear that lien, follow these key steps:

1. Identify and Preserve the Lien. Review your workers’ compensation file to confirm all benefits paid, including medical and wage-loss. Document the carrier’s lien amount and any future anticipated medical expenses.
2. Provide Timely Notice. Notify the workers’ compensation insurer in writing that you have filed—or plan to file—a third-party personal injury lawsuit. Nebraska courts generally require the carrier to receive prompt notice to protect its subrogation rights.
3. Calculate the Lien Value. Under § 48-118, the insurer is entitled to reimbursement of benefits paid, subject to a pro rata share of your attorney fees and costs. Work with your attorney to allocate fees between the compensation lien and the third-party recovery.
4. Negotiate a Settlement. You can often negotiate a reduction of the lien. Common factors include the strength of your third-party case, anticipated litigation costs, and policy limits. Aim to reach a stipulation in writing that specifies the exact lien amount the carrier will accept.
5. Obtain Court Approval. File the stipulation or a motion for approval in the appropriate Workers’ Compensation Court. A judge must sign off on any agreement that settles or compromises the lien under Nebraska law.
6. Finalize the Third-Party Release. Include language in your personal injury settlement or judgment releasing the third-party defendant and their insurer, plus requiring payment directly to the workers’ compensation carrier for the agreed lien amount.
7. Secure a Satisfaction of Lien. After payment, obtain a formal satisfaction or release document from the workers’ compensation carrier. File it with the Workers’ Compensation Court to clear the lien from the record.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney licensed in Nebraska to address the specifics of your case.

Helpful Hints

• Keep detailed records of all benefits paid and medical bills.
• Start lien discussions early—before finalizing your third-party settlement.
• Use a dedicated attorney experienced in coordinating workers’ compensation and personal injury claims.
• Review Neb. Rev. Stat. § 48-118 for lien rules and allocation of fees.
• Confirm all deadlines: statute of limitations for third-party claims (see Neb. Rev. Stat. § 48-1621) and court filing requirements.
• Get all agreements in writing and signed by all parties.