Detailed Answer
Under West Virginia law, when you receive both workers’ compensation benefits and a personal injury settlement from a third party, the workers’ compensation insurer has a right to reimbursement for benefits it paid related to your injury. To coordinate benefits effectively, follow these key steps:
1. Notify the Workers’ Compensation Insurer Early
As soon as you pursue a third-party claim, inform your workers’ compensation insurer in writing. Early notification helps protect your interests and ensures compliance with WV Code § 23-2-6.
2. Allocate the Settlement
Structure your settlement agreement to itemize damages. Typical categories include:
- Bodily injury
- Pain and suffering
- Lost wages
- Medical expenses
Allocating helps calculate how much the insurer can claim. The insurer may seek reimbursement for medical and indemnity benefits under WV Code § 23-2-7 (subrogation).
3. Account for Attorney Fees and Costs
West Virginia law allows you to reduce the insurer’s lien by a proportionate share of attorney fees and litigation costs. Document these amounts in your settlement documents.
4. Obtain a Lien Waiver or Approval
Before finalizing the settlement, get the insurer’s written agreement on the lien amount or a court order resolving any dispute. If the insurer objects, you can file an interpleader action to seek court determination of the lien.
5. Disburse Funds Correctly
Once the settlement closes, pay the agreed lien amount directly to the workers’ compensation insurer. Retain proof of payment to show you’ve satisfied your subrogation obligation.
Hypothetical Example: Jane, an office worker in Charleston, suffers a back injury at work. She collects $20,000 in workers’ compensation benefits and later sues a negligent contractor, settling for $100,000. Jane allocates $30,000 to medical bills, $20,000 to lost wages, and $50,000 to pain and suffering. After accounting for 30% attorney fees and court approval, she reimburses her insurer $45,000 for benefits paid, in line with WV Code §§ 23-2-6 & 23-2-7.
Disclaimer
This article provides general information only and does not constitute legal advice. Consult a qualified attorney to discuss your specific situation.
Helpful Hints
- Keep detailed records of all workers’ compensation payments.
- Request a written lien statement from your insurer before settlement.
- Ensure your settlement documents clearly allocate damages.
- Consult an attorney experienced in WV subrogation law.
- Review WV Code Chapter 23, Article 2 for statute details.