Detailed Answer
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney to address your specific situation.
Understanding Workers’ Compensation Liens in Minnesota
Under Minnesota law, a workers’ compensation insurer has a statutory lien on any third‐party recovery obtained by an injured employee. See Minn. Stat. § 176.061. The lien covers past medical expenses, past wage‐loss benefits, and allocated future medical benefits paid by the carrier on behalf of the injured worker.
Step 1: Request a Lien Statement and Verify the Amount
Promptly request a detailed lien statement from the workers’ compensation insurer. The statement must list all medical bills, indemnity payments, and any future benefit estimates. Review each entry to confirm accuracy—ensure dates, providers, and amounts match your records.
Step 2: Allocate Settlement Proceeds
Minnesota courts require a clear allocation between damage categories. Allocate settlement proceeds among:
- Past medical expenses
- Future medical expenses
- Past wage‐loss benefits
- Pain and suffering or other non‐economic damages
Accurate allocation minimizes disputes with the insurer and helps justify the lien amount.
Step 3: Seek Approval of the Settlement and Lien Resolution
File a petition with the Minnesota Workers’ Compensation Division (WCD) under Minn. Stat. § 176.231. Include:
- A copy of the settlement agreement showing allocations.
- The insurer’s lien statement.
- A proposed order approving the settlement and satisfaction of the lien.
The WCD will review the submission, confirm correct allocation, and issue an order approving the settlement and releasing the lien. If the insurer or the employee disputes the amount, the WCD may hold a hearing.
Step 4: Distribute Settlement Funds
After obtaining the WCD’s order:
- Pay the workers’ compensation insurer the approved lien amount directly from the settlement escrow.
- Disburse remaining proceeds to the injured worker and/or counsel.
Keep records of payments and the WCD approval for future reference.
Helpful Hints
- Start lien verification early to avoid settlement delays.
- Maintain organized records of all medical bills and indemnity payments.
- Consult a workers’ compensation specialist for complex lien calculations.
- Ensure settlement agreements include explicit allocation language.
- Confirm the WCD’s order is final before disbursing funds.