Administrative rule change needed to help with when a workers’ comp settlement check is late.
Late payouts are a major problem in the Michigan work injury compensation system. Many of our clients have not received income for months and need financial relief. These individuals cannot put food on the table or pay rent. Lump sum cash payouts become the only viable option to get their life back on track. Here is some information about speeding up the redemption process and why penalties are needed for a workers’ comp settlement check that is late.
It can take up to eighteen months to litigate a disputed workers’ comp case. Magistrates do not even consider a case ripe for trial until twelve months have passed. Appeals can go on for several years afterwards. Most people cannot wait this long and want to settle now. The settlement process can be accomplished in a matter of weeks and payments can be mailed out immediately.
We understand and do everything possible to speed up payment. This includes asking a magistrate to approve the amount awarded before the next scheduled hearing date. All payouts must be approved by a magistrate and this can dramatically speed up the process. We also hound defense attorneys to get their clients to pay on time. But there is not much that can be done about a workers’ comp settlement check that is late.
Appeal period after redemption hearing
A lump sum cash payout is not final until fifteen days after the magistrate approves the redemption. This period allows both sides to request the amount be overturned. Payment should be mailed about two weeks after the amount becomes final.
A settlement cannot be overturned during the appeal period without good cause or a legal reason. Changing minds is not sufficient cause for either side. Finding out that a medical condition is much worse than previously believed could be a good justification.
It is possible to waive the fifteen day appeal period and have the check mailed immediately. Both sides must agree, and the Workers’ Disability Compensation Agency needs to sign off. This is usually accomplished with a telephone call after the redemption hearing.
Payment is supposed to be processed and mailed immediately following a fifteen day waiver. Some insurance companies ignore this requirement and still take thirty or more days to issue a check.
Penalties for a workers’ comp settlement check that is late
The administrative rules have no penalties for a workers’ comp settlement check that is late in Michigan. We recently had an insurance company take over two months to issue a draft. That is unacceptable when the appeal period has been waived.
Magistrates should be empowered to award penalties for when a workers’ comp settlement check is late. This would certainly get the attention of claims adjusters who are sitting on payouts.
Penalties of $50 per day, up to a maximum of $1,500, already exist for late payment of weekly checks. We think this administrative rule could easily be applied to settlements that are not paid within a reasonable period of becoming due.
Michigan Workers Comp Lawyers never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled employees exclusively for more than 35 years. Call (844) 316-8033 for a free consultation today.