Can a Workers' Comp Claim Stay Open Indefinitely?

Can a Workers' Comp Claim Stay Open Indefinitely?
9
min read
November 21, 2022

As an employer, you know that workers’ compensation exists to protect both you and your employees. You, from unwanted lawsuits, and your employees, from financial challenges following a work-related injury.

After that, though, the rules and regulations in place for workers’ compensation claims can get a little complicated—and you might have some questions. For example, if you’ve ever wondered whether there are time limits on workers comp claims, read on as we break down this common question and take a look at the factors that impact the length of time your employee’s claim may stay open.

How Are Workers’ Comp Cases Resolved?

Understanding how workers’ comp claims are settled is the first step in learning how long a claim may stay open. There are two basic ways that workers’ comp settlements are handled:

There is also the possibility of a judicial ruling in a workers’ compensation case if the participants cannot reach one of the two settlement types listed above.

How Long Can a Workers’ Comp Claim Stay Open?

Simple workers’ comp claims can stay open for a few weeks, while more complex claims that require ongoing medical treatment can stay open anywhere from one to several years. If a worker has an injury that left them with a lasting disability that requires regular medical care, their claim may stay open for their lifetime.

As you might guess, the type of settlement you arrive at in a workers’ comp claim impacts the length of time the case will remain open.

...with Compromise and Release Settlements

If the workplace injury has stabilized and the employee is finished with medical care and able to return to work, a compromise and release settlement might be a good option.

If that’s the case, the workers’ comp case will only be open long enough for participants to agree on the sum and the employee to receive the check. At that point, the case closes. This usually takes a fairly short time, and the case could be resolved within a few weeks.

...with Stipulation and Award Settlements

For more complex cases, where continuing medical treatment is required and the employee suffers from temporary or permanent disability, a stipulation and award settlement sometimes makes more sense. 

Often, the settlement will be delayed while the worker is still recovering, since it’s not clear how much the insurer will need to pay for medical costs. The insurer, however, is required in many states to pay for medical costs while the settlement is still pending. In California, for example, the insurer must provide up to $10,000 for treatment while the case is being considered by the claims administrator.

In these cases, a workable settlement may not be arrived at for more than a year, and the workers’ compensation benefits might continue for years, providing financial support for the employee as they deal with a personal injury that has a lasting impact.

If that happens, the insurer may be paying for medical expenses long after the date of injury. There is no set statute of limitations on claims; in some cases, the workers’ compensation coverage may end or diminish when the worker reaches the age of 65 and Medicare kicks in. In other cases, it may last as long as the employee lives. The terms of the settlement will have dictated the length of time the claim is paid out. 

Are Workers’ Comp Rules the Same No Matter Where the Employee Lives?

Workers’ compensation insurance is partly governed by rules created by the Division of Workers’ Compensation in the state where the business operates. So the answer to a question such as “How long can you be on workers’ comp in Texas?” could be different from “How long can I be on workers’ comp in Ohio?”

In general, state laws regarding workers’ comp deadlines are more often concerned with the length of time the employee has to file the claim—not the length of time for which they can receive benefits

If a worker needs care for the rest of their life, their claim may stay open for their lifetime—and that doesn’t vary much from state to state. It’s possible that the payments may be reduced when the employee begins to collect social security retirement benefits, but there is no age limit for workers’ compensation.

If you or your employee are concerned with possible state laws limiting benefits, your best bet is to consult the law firm of a workers’ compensation attorney. These legal professionals understand the labor code in your state and can speak to the potential length of an injury claim.

If you are using a payroll or workers’ comp system such as Hourly’s easy-to-use app, you can be sure your state laws will be taken into account. This ensures that you are paying neither too much nor too little on your premiums and that you stay in compliance and avoid headaches down the road.

Does Workers’ Compensation Follow You around?

Another question you or your employees might have is whether a work injury claim stays open if the employee leaves the business to work elsewhere. Here, once again, the type of settlement plays a role.

If a worker with a job-related injury and the insurance company agree on a stipulation and award settlement, with multiple payments over time, there is no issue with the employee working elsewhere—or, if their injuries are severe, living on full or partial disability benefits.

Some insurers, however, will refuse to agree on a compromise and release settlement if the claimant wishes to return to work for the same employer. Why? Because insurers claim that the claimant could, in the future, open a new claim with the same insurer for the same injury. 

No insurer wants to pay twice for the same injury, so they will likely turn down a proposed settlement under those conditions. Whether this is truly the case or not is open to debate and is not stipulated by law, but it is a fact that often if there is a lump sum payment, the expectation is that the worker will not be returning to their job. 

What Is the Difference between Workers’ Comp Settlements and Lawsuits?

A workers’ comp settlement is when an employee, employer and insurance company agree on the amount of money that should be given for a workplace injury (and that money is provided), whereas a lawsuit is when they can’t agree and someone sues, which lands the case in court.

With a lawsuit or hearing, the participants in the claim, including the employee, their workers’ compensation lawyer, if they have one, and a representative from the insurance company go before a judge who has experience dealing with workers’ compensation laws. 

There is no jury, however. 

The judge will hear testimony on the case, review medical records and past settlement attempts, and decide on the claim and how much money shall be given to the claimant—or, conversely, rule that the claimant has no right to a payout.

An injured employee may ask for the case to be settled by a judge if the claim was denied and they wish to appeal it or if the amount that the insurer wants to pay seems inadequate. They may need to undergo a medical exam from an independent medical provider, and they may want to get legal advice and retain a lawyer if they have not done so previously.

Deadlines for Workers’ Comp Claims 

Although a case can stay open for as long as the injured worker is alive, there are deadlines, mostly imposed by the state, for filing a claim. Let’s take California, for example. In California, they include the following: 

Other states may have different regulations and deadlines. If you’re unsure of the regulations or deadlines in your state, talk to your insurance agent.

What Is the Most Common Question Claims Adjusters Ask?

The first and possibly most important question a claims adjuster will ask an employee is: “What happened?” If you are the person who was injured and you’re not sure exactly how the accident happened, it’s a good idea to talk to eyewitnesses so you can answer this question accurately.

The injured worker should not embellish, exaggerate, or lie, as these will raise red flags that might impact the adjuster’s final report. The adjuster may take the time to talk to others who were on the scene, and any discrepancy between what they say and the worker’s own account would be noticed.

If you are the business owner, the adjuster will want to ask for your version of the accident or injury. They may also want to talk to you about safety conditions in your place of business, as well as protocols in place to protect your employees from likely accidents. This is one reason it's a good idea for business owners to be compliant with all OSHA safety requirements and state-mandated safety regulations well before there is an accident.

Here are a few more tips to make that meeting as smooth as possible, and to handle frequently asked questions that the adjuster might have.

Know How to Answer Your Employees’ Questions on Comp Benefits

You don’t necessarily have to be a workers’ compensation expert to be a business owner—but some basic knowledge about what happens when an employee is injured in an on-the-job accident can be helpful. If that happens, you will be involved in helping them settle their claim in a way that is fair for all those involved.

Now that you know a little more about how claims work, the types of settlements that are offered, and how long a claim can stay open, you’ll be able to answer questions that your employee may have about the process and how it will progress.

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