Detailed Answer
Under Maryland law, if you recover money from a third party after a work-related injury, your workers’ compensation insurer gains a lien on your settlement. Md. Labor & Employment § 9-504 grants subrogation rights, and § 9-507 governs notice and reimbursement. Follow these seven steps to verify and satisfy the lien:
1. Identify the Third-Party Claim
Determine whether your injury gives rise to a third-party lawsuit (for example, a motor vehicle collision or defective product). Confirm that you filed a personal injury case against the at-fault party.
2. Notify the Insurer & Provide Claim Documents
Before you settle, send written notice to your workers’ compensation insurer. Include copies of the complaint, summons, and any demand letters. This notice requirement arises under Md. Lab. & Empl. § 9-507. Early notification protects the insurer’s subrogation interest and avoids delays.
3. Request a Lien Statement
Ask the insurer for a detailed statement of the lien. The statement should list all benefits paid, accrued interest, and any statutory fees or penalties. Verify calculations against Md. Lab. & Empl. § 9-504.
4. Seek Commission Approval
File a Joint Petition for Approval of Third-Party Settlement (Form HC-377) with the Maryland Workers’ Compensation Commission. Attach the proposed settlement agreement and the lien statement. The Commission gives the insurer at least 15 days to object.
5. Allocate Settlement Proceeds
Maryland requires clear apportionment of the settlement among damages (e.g., medical expenses, lost wages, pain and suffering). Proper allocation prevents double recovery and ensures the lien covers only reimbursable portions.
6. Pay the Lien from Net Recovery
After deducting attorneys’ fees and court-approved costs, remit the lien amount directly to the workers’ compensation insurer. Retain proof of payment, such as a bank receipt or insurer acknowledgment.
7. File Notice of Satisfaction
Submit a Notice of Satisfaction of Lien to the Commission and all involved parties once the insurer confirms full repayment. This document officially discharges the lien in the Commission’s records.
Helpful Hints
- Track all deadlines for notice and Commission filings to avoid waiver of the insurer’s lien rights.
- Keep detailed records of benefits paid and communications with the insurer.
- Allocate settlement proceeds in writing to document compliance with subrogation rules.
- Coordinate with your personal injury counsel to streamline the joint petition process.
- Consult the Maryland Workers’ Compensation Commission website (wcc.state.md.us) for forms and procedural guidance.
Disclaimer: This article provides general information about Maryland law and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.