Lump Sum Payments of Permanent Disability Benefits
Serving Injured Workers in Colorado
Colorado workers’ comp lawyer R. Mack Babcock helps you obtain permanent total (PTD) or partial (PPD) disability benefits if your injuries prevent you from working
There are 2 main types of financial benefits paid in most workers’ compensation cases:
- Wage loss benefits (also called temporary disability benefits), and
- Permanent disability benefits (paid at the conclusion of the claim).
Determining how much your claim is worth and what benefits you are entitled to depends greatly on the temporary and permanent disability benefits you are owed.
After a period of regular doctor’s appointments and medical procedures aimed at treating your workplace injuries, doctors will decide your condition has stabilized, moving you into the next phase of the Colorado workers’ compensation process. Statutes in Colorado require an injured worker receive compensation for permanent impairment based on the severity of their injuries.
If the severity of your injuries prevents you from holding any kind of job, you are considered permanently and totally disabled. In this case, workers’ compensation laws dictate that you receive 2/3 of your average weekly wage for either the rest of your life or until you are no longer permanently and totally disabled.
Workers’ compensation insurers in Colorado and elsewhere sometimes try to deny injured workers like you these necessary benefits. Without this financial lifeline, you could be put in a very tough position financially.
In this article, we’ll explain everything you need to know about permanent disability benefits, including how much can be paid, how often, and how they differ from wage loss (temporary disability) benefits.
We’ll always be there for you through the whole process. Every step of the way.
What Are Temporary Disability Benefits?
Colorado’s Workers’ Compensation Act states that wage loss benefits, when they are due, have to be paid at least every 2 weeks. Weekly or bi-weekly is the only way temporary disability benefits are paid when they are due.
If an injured worker is in the middle of their case receiving bi-weekly temporary disability benefits and they need or want to get money in a lump sum, their only option would be to try and negotiate a full and final settlement in exchange for closing their entire claim.
Continue reading: Maximum Benefit Rates for Colorado Workers’ Compensation
What Are Permanent Disability Benefits?
Permanent disability benefits are paid at the end of some workers’ comp cases when an injured worker has ongoing problems as a result of a work injury or has suffered permanent impairment.
There are 2 types of permanent disability benefits in Colorado:
Permanent total disability (PTD) benefits are wage loss benefits either for the rest of the person’s life or until a person is able to go back to work. PTD benefits are very difficult to obtain in Colorado and therefore apply in very few cases. In order to be entitled to PTD benefits, an injured worker has to be completely unable to work in any capacity.
It doesn’t matter if the person cannot go back to their pre-injury profession. If an injured worker can do anything in an employment capacity, that person will likely not be entitled to permanent total disability benefits.
Most cases involve permanent partial disability (PPD) benefits. PPD benefits don’t take into account an injured worker’s ability to work or any resulting wage loss at all in calculating what benefits are due. PPD benefits are based entirely on impairment ratings assigned by an injured worker’s treating physician pursuant to the American Medical Association’s Guides to the Evaluation of Permanent Impairment (3rd Edition, Revised). The impairment ratings assigned by a treating physician are used in 1 of 2 equations – scheduled or whole person – to calculate an injured worker’s permanent partial disability benefits. Which equation is used depends on the body part(s) injured in the accident.
Unlike permanent total disability benefits that can last for the rest of the person’s life, permanent partial disability benefits are a set amount. For example, if a person’s PPD award is $25,000, the carrier stops paying once they’ve paid that full amount. At the same time, once a carrier agrees to PPD benefits and an injured worker accepts that amount, they are bound to pay the full amount.
Importantly, an injured worker can work and receive permanent partial disability benefits at the same time. In the case of PTD benefits, however, injured workers are only entitled to workers’ comp payouts while they are unable to work. As soon as the insurer gets the notion that you are capable of working, they will set forth measures to check if you’re still disabled. These methods include requiring frequent checkups with a physician, as well as hiring a private investigator. If you’re cleared to work, they’ll stop payments.
It’s a known fact:
The judge reviewing your case will take into account your current skills, education, training, and examine whether there are any vocational opportunities available in your job market before making their final call. It is possible for the workers’ comp insurer to offer vocational retraining options to you, but they rarely—if ever—do in our experience.
Even though you will not receive your full pre-injury wage, permanent total disability benefits will provide you with an important lifeline to maintain yourself for however long you need to.
Requesting a Lump Sum of Permanent Disability Benefits
Once an insurance carrier admits liability for permanent disability benefits of any kind (total or partial), an injured worker can make a “lump sum” request. Colorado places “caps” or limits on how much a worker can receive in combined temporary total disability benefits and permanent partial disability benefits.
For injuries occurring before July 1, 2015, the lump sum total could not be more than $60,000.
Fortunately, thanks in part to the work of R. Mack Babcock, founder of The Babcock Law Firm and recent president of the Workers’ Compensation Education Association (WCEA), Colorado law was recently changed to increase the lump sum limit and add a provision so that the limit adjusts for inflation every year. Therefore, the lump sum limit applying to your case depends on the date of injury.
The effect of requesting a lump sum in PPD cases versus PTD cases is different. In a permanent total disability case, the carrier gets to reduce the weekly or bi-weekly benefits. In permanent partial disability cases, the carrier gets to apply an annual 4 percent reduction from the award total.
If an injured worker doesn’t do a lump sum request, benefits are paid weekly or bi-weekly. How they are paid is completely up to the injured worker.
The surviving loved ones of a worker who was killed on the job can also submit lump sum requests. It works like PTD cases where the weekly benefit amount is reduced for the lump sum. The lump sum limit is the same if there’s only 1 dependent receiving death benefits. If there are multiple dependents (spouse and children), they can each make a lump sum request, but they are all limited to an amount equal to twice the individual limit.
Legal Advice on Lump Sum Requests
Deciding whether to receive your workers’ compensation benefits in the form of gradual payments or as a lump sum can be a difficult decision. The benefits of taking a lump sum are that all parties agree with the amount of the award.
This approach is advantageous for several reasons, the most significant being that any financial professional will tell you that you can beat the 4% rate of return used when calculating the present value discount. On top of that, most people want control of their funds and don’t want to wait for them to be trickled out over a few years.
Talk To a Colorado Attorney About Your Workers’ Comp Benefits
Clearly, there’s no one-size-fits-all solution. To determine the best course of action in your individual case and how to obtain your injury benefits, you should talk to an experienced workers’ compensation attorney.
If you’re experiencing problems obtaining the maximum permanent total disability benefits allowed under Colorado law, contact The Babcock Law Firm for your free consultation. Colorado workers’ compensation lawyer R. Mack Babcock understands the challenges injured workers have in obtaining their benefits.
Serving Injured Workers Throughout Colorado
From our office in Denver, we represent injured workers across the state—including in Colorado Springs, Littleton, Boulder, Aurora, Broomfield, Louisville, Lafayette, Lakewood, Golden, Thornton, Westminster, Longmont, Loveland, Fort Collins and many other Colorado cities.