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If you have an open workers’ compensation claim in New York, the insurance company may offer you a Section 32 settlement. In this type of settlement, instead of continuing to receive some or all of your workers’ compensation benefits, you agree to accept a set amount of money in exchange for giving up the benefits typically covered by workers’ compensation.
That can provide financial certainty, but it can also mean giving up benefits you may need years from now. Before accepting an offer, a Syracuse workers’ compensation lawyer at Catalano Law can review the terms, explain what you would be giving up, and determine whether the proposed settlement accounts for your future needs.
What Is a Section 32 Settlement?
Under New York Workers’ Compensation Law § 32, an injured worker and the workers’ compensation insurance carrier can negotiate an agreement that settles some or all of the benefits associated with a claim.
A Section 32 settlement may be paid as:
- A Lump Sum: You receive the settlement in one payment.
- An Annuity: You receive payments over time according to an agreed-upon schedule.
A Section 32 agreement can settle indemnity benefits, which compensate you for lost wages, medical benefits, or both. You do not have to settle everything at the same time. For example, you could settle your right to future wage replacement benefits via a Section 32 agreement while keeping your medical benefits claim open.
This flexibility makes the exact language of the agreement extremely important.
What Happens to Your Benefits After a Section 32 Settlement?
Once a Section 32 agreement becomes final, the insurer is no longer responsible for the benefits you waived.
| What You Settle | What Happens |
| Lost-Wage Benefits | Future weekly wage replacement payments end. Medical benefits can remain open. |
| Medical Benefits | You become responsible for future treatment related to the settled claim. |
| Both | Future wage replacement payments and insurer-paid medical care end. |
The Workers’ Compensation Board warns that if the money allocated for future medical treatment runs out after settling your claim through a Section 32 agreement, the insurer will not provide additional settlement money to cover those expenses or resume wage-replacement payments.
How Are Section 32 Settlements Calculated?
There is no single formula for determining the value of a Section 32 settlement. Factors that can affect negotiations include:
- Your current benefit rate and degree of disability
- The severity and permanence of your injury
- Your ability to return to work and future earning capacity
- Expected medical treatment, including possible surgery
- Disputed issues in your workers’ compensation case
Before accepting an offer, consider whether the amount fairly reflects the benefits and protections you would be giving up.
What Should You Consider Before Accepting a Section 32 Settlement?
A large payment can be appealing, particularly if an injury has already put financial pressure on you and your family. Before accepting, consider whether the settlement is enough to address your long-term needs.
Your Future Medical Needs
Consider the treatment you may need in the months and years ahead, including therapy, medications, injections, or surgery. Before closing medical benefits, talk with your treating physician about your prognosis, likely future treatment, and what that care could cost.
Your Lost Earning Capacity
Consider not only whether you can return to work, but whether your injury will prevent you from returning to your former occupation or earning what you did before the accident. A permanent reduction in earning capacity can affect the value of the benefits you are giving up.
Your Financial Stability
Consider how a lump-sum settlement will fit with your regular expenses, income, employment prospects, medical costs, and other financial obligations. The settlement may need to cover needs that would have been addressed by workers’ compensation benefits over many years.
Do You Have Time to Change Your Mind?
New York law provides a short period for reconsidering a proposed Section 32 agreement.
The Workers’ Compensation Board cannot approve the agreement for at least 10 days after it is submitted. An interested party can ask the Board to disapprove the agreement during that period. The Board may review the agreement through a hearing or a desk-review process.
The Board requires injured workers to watch its “Settling Your Claim” video before entering into a Section 32 waiver agreement to help ensure they understand the agreement they are entering into.
The Workers’ Compensation Board also explains that a worker who changes their mind must notify the Board in writing within the applicable 10-calendar-day period. Once that period has passed and the agreement is approved, it becomes final and binding.
The Board reviews Section 32 agreements and must approve them unless it finds grounds such as the agreement being unfair, unconscionable, improper as a matter of law, or based on an intentional misrepresentation of a material fact.
However, the Board does not negotiate your settlement for you. It is up to you and the insurer to negotiate the terms.
What About Medicare and Future Medical Expenses?
If a Section 32 settlement includes future medical expenses, Medicare’s interests may also need to be considered. In some cases, part of the settlement may be placed in a Medicare Set-Aside (MSA) to pay for future treatment related to the work injury.
Failing to properly consider Medicare’s interests can affect Medicare’s payment for future treatment associated with the injury. A medical allocation in a Section 32 agreement is not automatically the same as an MSA.
What Are the Pros and Cons of a Section 32 Settlement?
A Section 32 settlement can make sense for some injured workers, but the advantages need to be weighed against the rights being surrendered.
| Potential Advantages | Potential Risks |
| Provides a lump sum or structured payments | Settled benefits cannot be reopened |
| Gives you more control over the money | Future wage-replacement checks may end |
| Can resolve disputes with the insurer | You may become responsible for future medical costs |
| Provides certainty about the amount received | Future treatment may cost more than expected |
| Can close an ongoing workers’ compensation case | A lump sum may need to last for many years |
The value of settling depends on your injury, medical prognosis, ability to work, finances, and the specific terms being offered.
Why Would an Insurance Company Offer a Section 32 Settlement?
For an injured worker, it can eliminate uncertainty about future disputes and provide access to a defined amount of money. For the insurance carrier, settling can limit or eliminate future financial responsibility for the claim.
If your medical benefits are closed, for example, the carrier no longer faces the possibility of paying for covered treatment years into the future. Settling wage benefits can end its responsibility for future payments covered by the agreement.
Understanding what the insurer gains from the settlement can help you evaluate what you should receive in exchange for giving up those rights.
How Can a Syracuse Workers’ Compensation Lawyer Help?
You do not have to accept a Section 32 offer because the insurance company makes one. You can negotiate, reject the offer, or potentially structure an agreement that settles only certain benefits.
Before signing, a Syracuse workers’ compensation lawyer at Catalano Law can:
- Review the proposed settlement and explain what you would give up
- Evaluate your future medical needs and lost earning capacity
- Determine whether the offer accounts for your long-term needs
- Negotiate with the insurance carrier for fair compensation
- Help identify benefits that may be more valuable if left open
If you have received a Section 32 offer or are considering settling your workers’ compensation claim, contact Catalano Law for a free consultation. Our Syracuse workers’ compensation attorneys can review your case, explain your options, and negotiate with the insurance company on your behalf.
