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Workers' Compensation Award can be Offset by Disability Benefits


After receiving an injury on the job, people are commonly left astray in what to do. Many have questions regarding if they qualify for workers’ compensation, if and when they should seek medical treatment, and what benefits are they entitled to for missing work.

Sometimes employers will even go as far as encouraging their employees to seek out their own medical help through their own private insurance providers. It’s important to know that if you are injured on your job, you are entitled to payment of all medical expenses through the Alabama Workers’ Compensation Act. However, this act is full of complicated procedures and leaves many employees feeling hopeless and lost on what to do.

The intricate rules and procedures of the workers’ compensation act are demonstrated in a case that arises out of Jefferson County, Alabama in City of Birmingham v. Thomas. Here, the employer and employee reach a settlement in October 2013, after the employee was injured on the job.

In the agreement, the employee had relinquished all rights from future claims against the City of Birmingham (“the City”) in the consideration that the City would pay the employee $225,000 award. Furthermore, the judgment approving the settlement recited that the employee has been informed of his right to apply for disability.

Subsequently in December 2013, the employee filed an “Application for Disability Benefits” that was addressed to “Members of the Retirement and Release Pension Board” (“the Board”). However, in September 2015 the employee filed a “Motion to Enforce Settlement Agreement” to the trial court stating that the City had unilaterally decided to reduce the available benefits owed to the employee.

The City asserted that the employee was informed that if he sought out disability benefits that it would offset his workers’ compensation when he applied for disability. However, the trial court stated that by failing to expressly include the disability set-off in the settlement that the City had waived, or was estopped from asserting a set-off.

The Court of Civil Appeals reversed the order. The City asserts, and the appellate court agrees, that the workers’ compensation settlement merely reserved the employee’s right to apply (i.e., not a right to receive disability). The appellate court stressed the fact that the City and the Board were two separate entities; therefore, the City could not expressly waive the rights of the Board. Accordingly, the appellate court reversed the trial court’s order and allowed for the employee’s workers compensation to be offset.

To conclude, workers’ compensation claims are confusing and require strict adherence. It’s important to remember that if you are injured on the job that you should always notify a supervisor as soon as possible and seek medical help immediately.

Before you consider a settlement, consult with an experienced attorney to assess your claim and the value you should receive. Let us atIngram Law, LLC work for you in order to ensure that you are provided the correct financial support to maintain your quality of life. Please contact Joseph A. Ingram at (205) 335-2640 if you re injured on the job.

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