Structured Settlements Workers' Compensation Structured Settlements 3

Question 1

What is the primary regulatory body that must approve most workers' compensation structured settlements?

Accepted Answer

Workers' compensation judge or board in the applicable state

Answer

State insurance commissioner

Answer

IRS district office

Answer

Federal court

Question 2

Can structured settlement payments from a workers' compensation claim be subject to SSPA transfer restrictions?

Accepted Answer

Yes — many state SSPAs apply to WC structured settlements, requiring court approval for any transfer to a factoring company

Answer

No — workers' comp settlements are entirely exempt from SSPA requirements

Answer

Only if the original claim was in federal court

Answer

Only if the payments exceed $50,000 per year

Question 3

What does 'temporary total disability' (TTD) mean in a workers' compensation claim?

Accepted Answer

A temporary condition in which the worker cannot perform any work while recovering from the injury

Answer

A permanent partial loss of a body function

Answer

A disability causing the worker to reduce hours but remain employed

Answer

A psychological condition not covered by workers' comp

Question 4

What is 'subrogation' and how does it affect workers' compensation structured settlements?

Accepted Answer

The insurer's right to recover WC benefits paid from a responsible third party's settlement proceeds, which can reduce the net structured settlement amount available to the worker

Answer

The worker's right to sue the employer for pain and suffering

Answer

The structured settlement consultant's right to a commission

Answer

The state's right to recoup Medicaid expenditures

Question 5

What is 'apportionment' in a workers' compensation context involving a structured settlement?

Accepted Answer

The allocation of disability between a current work injury and a pre-existing condition or prior injury

Answer

The division of annuity payments among multiple claimants

Answer

The split of the settlement between indemnity and medical components

Answer

The proportional share of the annuity premium borne by each party

Question 6

Why might a claimant receiving workers' compensation choose to structure a settlement rather than take a lump sum?

Accepted Answer

To ensure long-term income stability, avoid rapid depletion of funds, and maintain tax-free payment status under IRC §104(a)(1)

Answer

To avoid mandatory SSDI offset rules that only apply to lump sums

Answer

Because state law mandates structuring for all WC claims over $100,000

Answer

To maximize the workers' compensation offset on SSDI