Detailed Answer
When you receive workers’ compensation benefits for a workplace injury in Missouri, your employer’s insurer may claim a lien on any recovery you obtain from a third-party personal injury claim. This process protects the no-fault workers’ compensation system by allowing the insurer to recover its costs when a responsible party exists outside the workplace.
Missouri’s Lien Statute: RSMo § 287.120
Under Missouri Revised Statutes Section 287.120 (RSMo § 287.120), your employer or its insurer gains a lien for all benefits paid or payable if you settle or win a judgment against a third party. The insurer’s subrogation right allows it to step into your shoes and assert a claim against the responsible party.
Impact on Your Settlement
- Allocation of Funds: A portion of your settlement must go to reimburse the workers’ compensation insurer for benefits paid, such as medical bills and wage replacement.
- Priority: The workers’ compensation lien typically takes priority over your attorney’s fees in the third-party claim but may share pro rata reductions under certain circumstances.
- Negotiation: You and your attorney can negotiate the lien amount. If the lien seems excessive, you can petition the workers’ compensation division or court to reduce it.
- Net Recovery: Your final payout equals the total settlement minus (1) the workers’ compensation reimbursement, (2) attorney’s fees, and (3) case-related costs.
- Formal Notice: You must notify the insurer of your third-party claim. Failure to provide timely notice can lead to penalties or reduction of benefits.
Helpful Hints
- Review RSMo § 287.120 in full to understand your obligations and the insurer’s rights (link).
- Gather documentation of all workers’ compensation benefits you’ve received, including medical and wage-loss records.
- Work with an attorney experienced in both workers’ compensation and personal injury to navigate subrogation issues.
- Request a lien receipt or statement from the insurer before finalizing your third-party settlement.
- If you disagree with the lien amount, file a petition with the Missouri Division of Workers’ Compensation to challenge it.
- Keep detailed records of correspondence with your insurer to avoid disputes over notice requirements.
Disclaimer: This article is for educational purposes only. It does not constitute legal advice. Consult a qualified attorney for guidance specific to your situation.