Disclaimer: This article provides general information under Indiana law and does not constitute legal advice. Consult a qualified attorney for advice tailored to your situation.
Detailed Answer
What triggers a workers’ compensation lien?
When you file a personal injury claim against a third party, your employer or its workers’ compensation carrier can seek repayment of the benefits it paid to you. Indiana Code § 22-3-2-26 grants employers a lien on any recovery you obtain from that third party.
How the lien amount is calculated
The lien cannot exceed the total amount of compensation the employer paid. Under Indiana Code §22-3-2-26(b), you and the employer share attorney’s fees proportionally. For instance, if your attorney fees are 33% of the gross settlement, the employer’s share of those fees reduces its reimbursement amount.
Example:
- Gross settlement with third party: $100,000
- Attorney fees (33%): $33,000
- Benefits paid by employer: $30,000
- Employer’s fee allocation: $30,000/$100,000 × $33,000 = $9,900
- Reimbursement to employer: $30,000 – $9,900 = $20,100
- Your net recovery: $100,000 – $33,000 – $20,100 = $46,900
How the lien affects your net recovery
The workers’ compensation lien reduces the amount you receive after legal fees. You must consider this deduction when negotiating a settlement. Your attorney will handle lien negotiations and ensure the employer’s lien is accurately calculated.
Filing deadlines and enforcement
To enforce its lien, the employer must file a petition with the Indiana Workers’ Compensation Board within two years of your third-party recovery or settlement, as outlined in Indiana Code § 22-3-2-26(f). Missing this deadline may forfeit the carrier’s recovery rights.
Helpful Hints
- Notify your employer’s carrier promptly about any third-party claim.
- Work with an attorney experienced in both workers’ compensation and personal injury law.
- Review the lien amount for accuracy, including a proportional share of attorney fees.
- Keep records of all workers’ compensation benefits you receive.
- Confirm that the Workers’ Compensation Board approves any lien settlement agreement.