A settlement must meet the requirements of the Texas Labor Code.
A settlement must:
- be approved by the commissioner or someone the commissioner designates;
- accurately reflect the agreement between the parties;
- adhere to law and the policies of DWC; and,
- be in the best interest of the injured employee.
A DWC Form-025, Benefit Dispute Settlement should:
- Include the dates of the settlement’s payment periods. The dates of the periods of payment cannot be in the future. An injured employee is either able or not able to get benefits based on facts of the case.
- State that the settlement resolves entitlement to all income benefits.
Example: "All other income benefits have been paid and the claimant is not entitled to any further or future income benefits." - State that the parties give up their right to future DWC proceedings related to liability for and entitlement to income benefits.
- If appropriate, state the date of maximum medical improvement and the impairment rating based on a doctor's certification.
- State that the parties have the right to request DWC proceedings to resolve disputes regarding liability for and entitlement to medical benefits.
The terms of the settlement should be stated on the DWC Form-025. Parties should attach additional pages if more space is needed. Only one DWC Form-025 should be submitted. The number of additional pages should be noted at the end of Box 10. All participants signing the form should initial each additional page.
In addition to the DWC Form-025, the parties should provide:
A joint explanation or separate explanations from each party stating why the parties believe the settlement is in the best interest of the injured employee. The explanations must have supporting information. The parties can choose whether to include these explanations in the settlement itself. The supporting information should address:
- The amount of workers' compensation income benefits the injured employee would have received if found entitled to benefits during the periods covered by the terms of the settlement.
- The amount of social security disability indemnity (SSDI) benefit the injured employee receives with the offset for workers' compensation benefits and the amount that SSDI will increase once workers' compensation benefits end.
- Other sources of income or financial support for the injured employee.
General settlement considerations - helpful hints
Agreements
No agreements should be pending when a settlement is submitted. Any pending agreements should be withdrawn and included in the settlement.
Correcting settlement provisions
Only those who signed the settlement may make corrections. Corrections are made and effective only if each person who signed the settlement also initials the settlement where the change is made.
Court orders and judgments
Copies of all court orders and judgments relating to the settlement should be attached.
Dates
Dates must be correct as calculated by the Texas Labor Code.
There can be no partial supplemental income benefits (SIBs) quarters unless it is the last SIBs quarter and it is shortened because of the expiration of 401 weeks from the date of injury.
Income benefit payment amounts
Income benefit payment amounts shall not exceed the statutory maximum.
Legibility
Illegible settlements must be rejected because their terms are unknown and cannot be enforced. A common cause of illegible settlements is repeated faxing.
Maximum medical improvement (MMI) and impairment rating (IR)
An MMI date must be based on a doctor's certification. An IR must also be based on a doctor's certification. The parties may not settle on an IR without also settling on the MMI date.
Rejected settlements and reconsideration
Rejected settlements shall not be reconsidered; however, the parties may submit a new settlement. A copy of a previously rejected settlement is not a new settlement and will be rejected. The parties must sign the new settlement after the date the prior settlement was rejected. Before submitting a new settlement, the parties should make appropriate changes to the settlement that address the concerns that led to rejection of the prior settlement.
Settlement effective date
The settlement is not effective until it is signed and approved by the commissioner or the commissioner's designee. Until the settlement is signed and approved, the parties must continue to preserve all their rights (i.e. filing required paperwork within the required timeframes, complying with SIBs qualifying requirements, etc.).
Settlements may not:
- Limit or end an injured employee's right to medical benefits.
- Be made until the injured employee has reached MMI and a valid IR is established.
- Agree to a date of MMI and/or percentage of impairment that a doctor has not certified.
- Allow an insurance carrier to make a payment to any party in exchange for dropping their claim or stating that there was no compensable injury.
- Waive a party's right to third-party subrogation or agree to relieve a party from the effects of an administrative violation.
- Dismiss or withdraw an administrative complaint.
- Include issues that are addressed by a decision and order, Appeal Panel decision, or court decision that has become final.
Texas Labor Code
General Definitions
Section 401.011(3)
Section 401.011(40)
Settlements and Agreements
Section 408.005
Entitlement to Medical Benefits
Section 408.021
Resolution at Benefit Review Conference, written agreement
Section 410.029
Texas Administrative Code
Dispute Resolution - Agreements, Settlements, Commutations
Chapter 147
Forms
DWC Form-025, Benefit Dispute Settlement
Point of contact
For settlement related issues for injuries occurring after January 1, 1991:
Gerri Thomas
Chief Administrative Law Judge