Section 32 Settlements

Under Section 32 of the Workers’ Compensation Law, the parties may reach an agreement to forever resolve the Lost Wage portion, often referred to as indemnity, and/or the medical portion.

Rather, a Section 32 agreement must be a voluntary agreement entered into by the injured worker and the Carrier.

A Section 32 settlement is often discussed immediately prior to a finding of MMI or the commencement of the permanency proceedings.

The amount of a Section 32 settlement dealing with indemnity is typically calculated based upon what the Carrier is likely to pay in the future. Sometimes, the amount is based upon the Reduced Earnings payments, the likely PPD payment, or a combination thereof.

As Workers’ Compensation is a wage-replacement law, there is no legal consideration of pain and suffering.

Rather, the amount of the Section 32 settlement is based upon the anticipated payments as a result of the loss of earning capacity.

What About My Medical?

The amount of the medical portion of a Section 32 settlement is dependent upon your past, present, and future treatment. The factors that are considered include, not only medical treatment, but prescriptions and other durable medical expenses.

If you are a recipient of Social Security Disability and enrolled in or eligible for Medicare, additional considerations are made to ensure that you are not violating the law by transferring your medical care from the New York State Workers’ Compensation system to the federal Medicare system.

Many times, a Section 32 agreement includes an allocation for future medical expenses. This allocation may or may not be approved by the Center for Medicare Set-Aside (CMS), depending on the amount and your Social Security status. Sometimes, a Medicare Set-Aside (“MSA”) account is established to provide for payment of future medical expenses.

The decision to forever resolve your case by way of a Section 32 agreement is significantly different than a decision to pursue a Schedule Loss of Use, a Permanent Partial Disability, or a Permanent Total Disability. At MCV Law, we strive to educate our clients so as to allow them to make an informed decision as their case approaches permanency.

How is a Section 32 Settlement Paid?

Once a Section 32 agreement has been reached, a written document is prepared for all parties’ signatures. In addition, the New York State Workers’ Compensation Board requires a disclosure form and an attorney’s fee request. All the documents are filed with the Workers’ Compensation Board and a hearing is scheduled.

At the hearing, the Workers’ Compensation Law Judge reviews the agreement to ensure that it is fair and reasonable, and voluntarily entered into. When the Judge is satisfied, the Section 32 agreement is provisionally approved. The Law affords all parties 10 days from the date of provisional approval to withdraw from the agreement. Once the provisional period has run, the Board issues a formal decision approving the Section 32 agreement. As a practical matter, this process typically takes about 3 weeks from the date of the hearing.

The Carrier is obligated to make payment within ten days of the formal decision, not the hearing date. The date of decision is set forth in the lower right hand corner of the Notice of Decision. The payment is made in a lump sum and is mailed to you in a manner similar to your weekly benefits.

If the payment is late, a penalty may be imposed. If you think your check is late, you should save the envelope in which it came, as the postmark is evidence of the date the check was mailed.