In Texas workers compensation claims, there is a general legal prohibition on lump sum settlements. However, often benefits will be paid in a lump sum under the right circumstances.
One of those is following a dispute where benefits were denied.
Texas Labor Code 408.081 contains the first stipulation regarding benefit payment:
(a) An employee is entitled to timely and accurate income benefits as provided in this chapter.
However, this does not mean that an insurance carrier cannot dispute entitlement to benefits. If an insurance carrier stops payment of benefits based on a dispute, that dispute can be resolved by a designated doctor report, benefit dispute agreement, or contested case hearing or appeals panel decision within the administrative phase.
If an insurance carrier thus has to go back and pay benefits it previously disputed or failed to pay, it must pay those accrued benefits in a lump sum with interest. This must happen even without an order or specific stipulation as to interest. 408.081 also provides:
(b) Except as otherwise provided by this section or this subtitle, income benefits shall be paid weekly as and when they accrue without order from the commissioner. Interest on accrued but unpaid benefits shall be paid, without order of the commissioner, at the time the accrued benefits are paid.
Past due income benefits that are paid by order are required to be paid in a lump sum, with interest, and the order must specifically include the requirement to pay interest. This would include a contested case hearing decision or appeals panel decision.
(a) An order to pay income or death benefits accrued but unpaid must include interest on the amount of compensation due at the rate provided by Section 401.023 .
(b) Accrued but unpaid compensation and interest shall be paid in a lump sum.
Comments