Structured Settlements for Worker’s Compensation

Not unlike a personal injury settlement, a worker’s compensation settlement is often best paid through a structured settlement plan. Since 1997, the tax law related to worker’s compensation and structured settlements has allowed these payment types to be income tax-free.

With the help of the right professionals—such as those at American Settlement Corporation—setting up a worker’s compensation structured settlement is a reasonably straightforward process. An employer or its insurance company simply contacts a structured settlement specialist who then drafts a deal based on the particular situation, including the injured employee’s age, annual earnings at the time of the injury, and projected medical costs. If both the employer and the employee agree on the deal, the specialist then arranges the financing.

Why Choose a Structured Settlement for Worker’s Compensation?

Being awarded a large sum of money can attract unsavory characters. These include “factoring companies,” which should not be confused with legitimate structured settlement specialists. Factoring companies purchase payment streams from claimants in return for a lump-sum payment that is typically a fraction of the value.

These companies surfaced in the 1990s and initially purchased lottery winning payment streams. They have since turned their focus to the courts and seek out recipients of worker’s compensation and other personal injury settlements.

Legislation in nearly half of the United States is being passed to limit the activities of and place severe restrictions on factoring companies; however, it is not yet enough. Be wary of these types of solicitations, and feel free to contact us with questions about this or other aspects of a worker’s compensation structured settlement.

A reasonable expectation for someone becoming a Medicare recipient includes having applied for or been approved for Social Security Disability Income benefits, having been denied and are appealing the decision, having end-stage renal disease but do not yet qualify for Medicare, or are 62 ½ years of age.