Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.
Detailed Answer
When an employee in Indiana who has received workers’ compensation benefits also pursues a personal injury claim against a third party, the workers’ compensation insurer holds a right of subrogation. Under Indiana Code IC 22-3-2-18, the insurer can recover amounts it paid for medical treatment, lost wages and other covered benefits from any third-party settlement or judgment.
Subrogation works by allowing the insurer to step into the injured worker’s shoes and assert a lien on settlement proceeds. To protect your net recovery, your settlement agreement should clearly allocate damages among medical expenses, lost earning capacity and non-economic damages like pain and suffering. The insurer’s subrogation claim is generally limited to the amounts it actually paid for medical and wage benefits.
Indiana’s Workers’ Compensation Act also imposes rules on settlement approval and allocation. See IC 22-3-3-12 for court approval of compromise settlements and required allocation of funds. Proper allocation helps ensure the insurer recovers only what it is entitled to and preserves the remainder for your personal recovery.
To coordinate benefits effectively, communicate early with the workers’ compensation insurer. Request a detailed statement of benefits paid. Negotiate settlement language that acknowledges the insurer’s lien but limits its recovery to designated categories. After you reach a tentative personal injury settlement, obtain a clearance letter or lien waiver from the insurer before finalizing the agreement.
If the third-party recovery is less than the sum of all benefits paid and associated attorney fees, you may negotiate a reduced subrogation payout. Courts often approve compromises that reflect the reality of limited settlement funds, subject to the insurer’s agreement or court review.
Coordinating benefits protects your right to full compensation while satisfying the insurer’s subrogation claim. Always involve legal counsel familiar with both workers’ compensation and personal injury in Indiana to ensure compliance with statutory requirements and deadlines.
Helpful Hints
- Notify the workers’ compensation insurer before filing a third-party claim.
- Obtain an itemized statement of all benefits the insurer paid.
- Allocate settlement proceeds clearly among medical costs, lost wages and pain and suffering.
- Include subrogation release language in your settlement documents.
- Request a lien waiver or clearance letter from the insurer before disbursing funds.
- Track any deadline for the insurer to assert its lien under IC 22-3-2-18.
- Work with counsel experienced in Indiana workers’ compensation and personal injury law.