Workers' Compensation Structured Settlements Flashcards
6 cards from real Structured Settlements practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Workers' Compensation Structured Settlements flashcards as text
What is the primary regulatory body that must approve most workers' compensation structured settlements?
Answer: Workers' compensation judge or board in the applicable state
Most state WC systems require a judge or the WC board to approve settlement agreements, including structured ones, to ensure the settlement adequately compensates the worker.
Can structured settlement payments from a workers' compensation claim be subject to SSPA transfer restrictions?
Answer: Yes — many state SSPAs apply to WC structured settlements, requiring court approval for any transfer to a factoring company
Many state SSPAs broadly define covered structured settlements to include WC periodic payment agreements, subjecting transfers to the same court approval requirements as tort structured settlements.
What does 'temporary total disability' (TTD) mean in a workers' compensation claim?
Answer: A temporary condition in which the worker cannot perform any work while recovering from the injury
TTD benefits replace a portion of wages during the period the worker is completely unable to work due to the injury but is expected to eventually recover.
What is 'subrogation' and how does it affect workers' compensation structured settlements?
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
When a third party (e.g., a negligent equipment manufacturer) is also responsible for the worker's injury, the WC insurer can assert a subrogation lien against any third-party recovery, reducing what remains for the structured settlement.
What is 'apportionment' in a workers' compensation context involving a structured settlement?
Answer: The allocation of disability between a current work injury and a pre-existing condition or prior injury
Apportionment determines what portion of the worker's current disability is attributable to the new work injury versus prior conditions, affecting the amount the employer or insurer owes.
Why might a claimant receiving workers' compensation choose to structure a settlement rather than take a lump sum?
Answer: To ensure long-term income stability, avoid rapid depletion of funds, and maintain tax-free payment status under IRC §104(a)(1)
Structuring a WC settlement provides a guaranteed, tax-free income stream that protects against financial mismanagement of a lump sum and supports long-term financial security.