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Disclaimer: This article is for informational purposes only and does not constitute legal advice.

Detailed Answer

When you settle a personal injury claim in Michigan but your employer’s workers’ compensation carrier paid your medical bills or wage benefits, the carrier has a statutory lien under MCL 418.811. You must verify and satisfy that lien before distributing settlement proceeds. Follow these key steps:

1. Obtain a Lien Statement: Promptly request an itemized statement from the carrier showing all benefits paid (medical, wage loss, mileage) plus interest and approved expenses. Michigan law requires the carrier to provide this information upon written request under MCL 418.811. MCL 418.811.
2. Review and Authenticate: Compare the lien statement to your records and medical summaries. Ensure each charge aligns with the care you received and wage-loss payments you claimed.
3. Calculate Pro Rata Attorney Fees: Under MCL 418.827, attorney fees and costs on the third-party recovery must also be apportioned against the carrier’s lien. Confirm that the carrier applied a proper percentage deduction. MCL 418.827.
4. Negotiate Discrepancies: If amounts or fees seem inflated, negotiate with the insurer. Provide supporting documentation (invoices, pay stubs) to resolve disputes informally.
5. Petition the Agency if Needed: If you cannot agree with the carrier, file a petition for hearing with the Michigan Workers’ Compensation Agency under MCL 418.847. A judge can confirm the lien amount. MCL 418.847.
6. Seek Agency Approval of Compromise: Michigan law requires agency approval of any third-party compromise that affects the carrier’s lien under MCL 418.825. Submit the proposed settlement and lien terms to the agency for formal approval. MCL 418.825.
7. Allocate and Disburse Funds: Once approved, distribute settlement funds. First, subtract pro rata attorney fees and costs. Then pay the carrier directly up to the approved lien. Distribute the balance to the claimant.
8. Document Final Satisfaction: Obtain a lien satisfaction letter from the carrier and file it with the agency or with your court file. Keep records of all correspondence and payments.

Helpful Hints

• Start lien verification early—don’t wait until right before settlement.
• Maintain clear records of medical bills, wage-loss claims, and receipts.
• Engage your personal injury attorney and compensation attorney collaboratively.
• Confirm that interest and mileage reimbursements are calculated correctly.
• Track all deadlines for written requests and agency filings.
• Consider the impact of attorney fee allocations on net recovery.
• Keep copies of all agency orders and correspondence in your file.
• If disputes persist, consider an informal mediation before a formal hearing.