Detailed Answer
When you’re injured on the job and pursue a third-party personal injury claim (for example, a car crash caused by a negligent driver), you may receive both workers’ compensation benefits and a settlement or jury award. Coordinating these benefits ensures you don’t receive a double recovery while protecting your right to full compensation.
1. Understand Your Insurer’s Lien Rights
Under Maryland law, your workers’ compensation insurer has a statutory right to reimbursement from any third-party recovery for amounts it has paid on your claim. See Md. Code, Lab. & Empl. § 9-610. The insurer’s lien generally covers:
- Past medical expenses paid by the insurer
- Past lost-wage benefits
2. Notify the Insurer in Writing
You must promptly inform your workers’ compensation insurer once you file a third-party claim. Early notice gives the insurer an opportunity to protect its lien through the Maryland Workers’ Compensation Commission rather than risk waiver for lack of timely notice.
3. Allocate Your Settlement Properly
Your settlement or award typically includes several damage categories:
- Economic damages (medical costs, lost wages, future care)
- Non-economic damages (pain and suffering)
- Punitive damages (where allowed)
Maryland law generally permits the insurer’s lien to attach only to economic damages. You should negotiate with the insurer to carve out non-economic damages and protect amounts earmarked for future medical care.
4. Petition the Commission if Necessary
If you and your insurer can’t agree on the lien amount or allocation, either party may file a statement of lien or a petition for reimbursement with the Maryland Workers’ Compensation Commission. The Commission can:
- Determine the reasonable lien amount
- Allocate settlement proceeds among all parties
Visit the Maryland Workers’ Compensation Commission for forms and guidance.
5. Draft a Detailed Release
Your settlement agreement should identify:
- Total recovery amount
- Breakdown of allocated damages
- Offsets or reductions for the workers’ compensation lien
- Any holdbacks for future expenses
Clear documentation prevents disputes and delays in disbursing your net settlement.
Disclaimer: This article is for educational purposes only. It does not constitute legal advice. You should consult a qualified attorney before making decisions about your claim.
Helpful Hints
- Record all communications with both insurers and opposing counsel.
- Keep copies of medical bills, wage statements, and Commission filings.
- Work with counsel experienced in both workers’ compensation and personal injury law.
- Outline your settlement allocation in writing before finalizing.
- Submit all notices and petitions to the Maryland Workers’ Compensation Commission on time.