Penalties for late settlement check

How an administrative rule change could easily fix the problem of late settlement checks but nobody seems to care about this issue.

Late settlement checks are a major problem in workers comp. Many of our clients have not received any income for months or even years.

These individuals cannot pay bills and are losing their homes to foreclosure. Settlement becomes the only viable option to get their life back on track.

We understand and do everything possible to speed up payment. This includes asking a magistrate to approve a settlement before the next scheduled hearing date.

Appeal Period

A workers comp settlement is not final until fifteen days after the magistrate approves the redemption. This time period allows both sides to request a settlement be overturned. A check should be mailed about two weeks after the settlement is final.

A settlement cannot be overturned during the appeal period without good cause. Changing your mind is not sufficient. Finding out that your medical condition is much worse than previously believed could be a justification.

It is possible to waive the fifteen day appeal period and have the check mailed right away. Both sides must agree and the Agency needs to sign off. This is usually accomplished with a telephone hearing after the redemption.

A settlement check should be mailed immediately if the fifteen day waiver is approved. Some insurance companies ignore this requirement and still take thirty days or more to issue a check.

Possible Solution

The administrative rules have no penalty for a late settlement check. We recently had an employer take two months to issue a draft. This is simply unacceptable when the appeal period has been waived.

Magistrates should be empowered to award penalties for late checks. This would certainly get the attention of claims adjusters who are sitting on files.

Penalties of $50 per day, up to a maximum of $1,500, already exist for late payment of weekly compensation benefits and medical bills. We think this rule could easily be applied to redemptions that are not paid within ten days of becoming final.

To speak with one of our workers comp lawyers in Michigan, call (855) 221-2667 for a free consultation.

Alex Berman is the founder of Michigan Workers Comp Lawyers. He’s been representing injured and disabled workers exclusively for more than 35 years. Alex has helped countless people obtain workers comp benefits and never charges a fee to evaluate a case.

Related Information:

Michigan workers comp lawyer explains the pros and cons of settlement and how to get the most money for your case.

Photo courtesy of Creative Commons, by scottjwaldron.

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