4123.512; R.C.4123.65; R.C. 4123.88; O.A.C. 4123-3-34
R. Abrams, Chief Operating Officer
Policy and Legal Services
# CP-12-01, effective 07/12/17
06/24/13; Rev.11/25/14; 10/07/16; 07/12/17
purpose of this policy is to ensure that administrative lump sum settlements
and court settlements are processed consistently, timely and equitably, in
accordance with all applicable rules and law.
policy applies to BWC staff who process lump sum settlement applications.
A settlement of the medical and/or indemnity portion(s) of a workers’
compensation claim(s) pursuant to R.C. 4123.65.
purposes of this policy, one who seeks the lump sum settlement of medical
and/or indemnity benefits - typically the injured worker or a dependent
receiving death benefits.
settlement of a BWC claim(s) related lawsuit, which is approved by the court in
which the lawsuit is filed.
Payment Letter (CPL):
A notification from Medicare indicating the amounts Medicare has paid to the IW
for treatment that may relate to the conditions in the claim.
Benefits payable pursuant to R.C. 4123.59 and R.C. 4123.60 to a dependent of an
injured worker who has died as a result of an injury or occupational disease
received in the course of, and arising out of, the injured worker’s employment.
Disabled Workers’ Relief Fund (DWRF): A
special fund that supplements the benefits received by permanently and totally disabled
injured workers whose benefits fall below a threshold amount determined
annually, based on the cost of living index.
A settlement that includes only the compensation portion of a claim (e.g.,
temporary total disability, permanent total disability).
Sum Settlement: A
written agreement that results in closure of a claim(s), or part of a claim(s),
as defined by the terms of the settlement agreement. A lump sum settlement
agreement may be entered into at the administrative or court level.
Present Value (NPV):
The present value of a monetary award, as opposed to what the award would be
worth if spread out over a period of time (i.e., the time value of money).
Partial Settlement: Settlement of only
part of a claim or claims, leaving certain conditions, compensation and/or
benefits, or combinations of conditions, compensation and/or benefits open for
to a claim: The injured worker (IW) or IW’s dependent, the employer
A. It is the policy of BWC that a lump sum settlement (LSS)
may be initiated by an employer or a claimant:
1. At any time during the
life of the claim; or
2. Pursuant to R.C.
4123.512, with the filing of a notice of intent to settle.
B. Settlements Initiated
Pursuant to R.C. 4123.512
1. It is the policy of
BWC, that notices of intent to settle pursuant to R.C. 4123.512 must be filed
on a Notice of Intent to Settle (C-512) form.
a. The C-512 must be faxed
to BWC Legal Services at (614) 621-3395 or mailed to the address provided on
b. If the notice of intent
to settle is not submitted on the C-512 form, BWC staff may contact the filing party
and request that a C-512 be completed and submitted within the statutory
timeframes of R.C. 4123.512.
2. It is the policy of BWC
that BWC Legal Services will handle all settlement negotiations for settlements
initiated pursuant to this provision.
a. If a tentative
agreement is reached, the terms of the settlement shall be set forth on an Agreement
and Application for Approval of Settlement Agreement (C-240).
b. The party who filed the
notice of intent to settle shall have 14 days from the date the tentative
agreement was reached to submit the C-240 with the appropriate signatures.
3. It is the policy of BWC
that settlements initiated pursuant to R.C. 4123.512 must be completed and paid
(if applicable) prior to expiration of the extended statutory timeframe
provided by R.C. 4123.512 for appeal.
C. Submission of the Settlement
Agreement and Application for Approval of Settlement Agreement (C-240),
including settlements pursued pursuant to R.C. 4123.512.
1. It is the policy of BWC
that, to avoid delays in processing or the possibility of disapproval, a C-240
(whether filed to initiate the settlement or following the filing of a C-512):
a. Must be submitted to
BWC on the most recent version;
b. Must be completed in
its entirety including a statement indicating why the proposed settlement is
deemed desirable; and
supplemental forms and/or documentation as indicated on the C-240.
2. BWC will notify the
claimant or the claimant’s attorney if there is any required information and/or
documentation missing. BWC will disapprove a settlement request if the required
information or documentation is not received within fourteen (14) days after
notification by BWC.
3. It is the policy of
BWC, in order to maintain proper confidentiality, that a C-240 shall only
contain the name and related claims of one employer. If the settlement
agreement is seeking to settle claims involving different employers, a separate
C-240 must be submitted for each employer.
a. The claimant or the
claimant’s attorney must sign the C-240.
claimant’s attorney signs the C-240 on behalf of the claimant, the claimant
must sign and file an Amended Settlement Agreement and Release (C-241).
The claimant’s signature must be on either the C-240 or a C-241.
claimant has assigned power of attorney (POA) to another, or has an appointed
guardian, legally sufficient documentation must be submitted verifying the POA
or guardianship. (See Custody, Guardianship and Power of Attorney
iii. A custodial parent will
be presumed to be the legal guardian and no further documentation will be
required unless BWC receives evidence suggesting the presumption is erroneous.
b. The employer or the
employer’s attorney must sign the C-240 unless one of the following exceptions
apply, pursuant to R.C. 4123.65(A):
employer is no longer doing business in Ohio;
is no longer in the employer's industrial accident or occupational disease
experience as provided in R.C. 4123.34(B) and the claimant is no longer employed by
that employer; or
iii. The employer has failed
to comply with R.C. 4123.35.
employer’s signature is required, but missing, BWC will send the employer
notification of the filing of the C-240 and provide the employer the
opportunity to respond within 14 days. If the employer does not respond, BWC
will disapprove the settlement application.
d. If the employer’s
signature is not required, but the employer is still doing business in Ohio,
BWC will send the employer notice of the filing of the C-240 and provide the
employer 30 days to respond.
employer does not respond within 30 days, BWC will process the settlement
application without the employer’s signature.
employer responds and objects in writing to the settlement application, BWC
will disapprove the settlement application.
e. When DWRF benefits are paid as part of the settlement, the
employer’s signature is required on a C-240 if the employer’s policy has been
combined and the employer is now self-insured. BWC will bill
self-insuring employers for any DWRF benefits allocated in a settlement.
signatures required on the C-240 must be dated no more than 18 months prior to
the date of filing.
D. BWC Authority
1. BWC approval is
required before any administrative settlement becomes final.
2. It is the policy of BWC
to independently evaluate and determine a fair settlement value and attempt, as
appropriate, to facilitate agreement between the parties.
3. When a settlement has
been initiated with the filing of a C-240 (as opposed to the filing of a notice
of intent to settle), and the employer has indicated, by checking “Box A” on
the C-240, that it is supportive and agreeable to the settlement up to the
amount listed on the C-240, BWC may renegotiate the agreed settlement amount,
considering the following:
a. Is the agreed
settlement amount greater than BWC’s calculated value of the claim, and are the
parties willing to permit BWC to negotiate a lesser amount on their behalf;
b. Does an “arm’s-length”
relationship exist between the parties and the settlement outcome is not
unfairly influenced (e.g., the injured worker is not a relative or a
partner/proprietor in the company);
employer experience-rated and is the claim within the policy year experience
d. Does the settlement
exceed the claim’s maximum value as determined by BWC; and
e. Can the settlement be
E. Disapproval of a
1. It is the policy of BWC
to disapprove a settlement request when:
a. BWC has determined that
the settlement agreement is not equitable or in the best interests of a party
b. A party does not agree
Special Investigations Unit (SIU) or the Subrogation Department has requested
disapproval, and a BWC settlement attorney has agreed to the disapproval; or
d. BWC has requested
information, but a party has not timely submitted the requested information.
F. Medicare Set-Aside
1. Prior to approving a
settlement agreement, BWC will require an IW/claimant to establish a Medicare
Set-Aside and provide BWC a signed “Medicare Secondary Payer Act” (MSPA) letter
a. A full and final
settlement is valued at $10,000 or greater and
the IW/claimant is on
Medicare or has a reasonable expectation of receiving Medicare within thirty
(30) months because the IW:
Social Security Disability (SSD);
Is age 62½
iii. Has applied for SSD;
iv. Has had an adverse
decision regarding SSD but has appealed the denial; or
from end-stage renal failure; and
b. A full and final
settlement is valued at $100,000 or greater, even if the IW/claimant is not on
Medicare and does not have a reasonable expectation of receiving Medicare
within 30 months.
2. The MSPA letter:
a. Must be signed by the
b. Requires the
IW/claimant to acknowledge and agree that a Medicare set-aside trust fund
account will be established for all claim-related medical benefits; and
the name of the bank or financial institution where the account will be
3. BWC will disapprove the
settlement application if the MSPA letter is not provided within requested
timeframe (typically 14 days from the date of the request).
G. It is the policy of BWC
that the parties to an administrative settlement must execute an Amended
Settlement Agreement and Release (C-241) when any of the following apply:
1. The C-240 filed was not
the most recent version and BWC did not request a new C-240 be filed; or
2. A change is made to the
originally requested settlement amount, terms or conditions as submitted on the
3. The claimant’s original
signature is required.
H. Approval of a
Settlement Application, 30-Day Waiting Period and Industrial Commission (IC)
1. It is the policy of BWC
to send a letter notifying all parties of BWC’s approval of a settlement
a. The day after the
approval letter is sent is counted as day one of the 30-day waiting period.
b. The waiting period
cannot be waived by any party for any reason.
compensation and medical benefits are suspended effective the mailing date of the
2. Withdrawal from
a. Any party may withdraw
from a settlement prior to the expiration of the 30-day waiting period.
b. The withdrawal must be
in writing and sent to all other parties to the settlement.
receive the withdrawal prior to the expiration of the 30-day waiting period,
regardless of the date the withdrawal is mailed or sent.
3. IC review of
a. BWC must send all
administrative settlements to the IC for review.
b. If the IC finds a
“gross miscarriage of justice”, or finds the settlement terms “clearly unfair”
during the 30-day waiting period, the IC may disapprove the settlement.
If the IC
does not disapprove a settlement within the 30-day waiting period, the settlement
is approved by operation of law.
1. If the claimant dies
prior to BWC approval of the settlement, BWC will disallow the settlement as
abated by death.
2. If the claimant dies
during the 30-day waiting period:
a. Any party may void the
settlement for good cause shown; and
b. If BWC determines that
good cause does not exist to void the settlement, the settlement will be
reinstated and paid to the estate of the deceased claimant upon receipt of necessary
3. If the claimant dies
after the 30-day waiting period, the settlement becomes final.
a. If the warrant has been
issued but not yet endorsed at the time of the claimant’s death BWC will seek
to have the warrant returned; and
b. If the warrant is
returned, BWC will reissue the warrant payable to the estate of the claimant
upon receipt of necessary documentation.
claimant’s legal representative to receive the LSS warrant, the claimant must:
1. File an Authorization
to Receive Workers’ Compensation Check (C-230) form; or
2. Provide authorization
on the C-240.
K. DWRF, Family Support,
Subrogation and Fraud
1. Any LSS amount BWC pays
is a final release that is subject to valid court-ordered family support, even
if the family support amount is the entire LSS.
2. BWC’s subrogation
recovery rights are not impaired by an LSS.
3. A finding of fraud at
any time permits BWC to rescind the LSS agreement, seek and recoup
administrative overpayments due to the fraud, and refer the claimant for
criminal prosecution, if appropriate.
L. Self-Insured (SI)
1. Settlements with a
self-insuring employer must be filed on the Self-Insured Joint Settlement
Agreement and Release (SI-42) form.
2. The SI employer will
process the settlement request for LSS.
3. The IC will review and
approve or disapprove SI settlement agreements.
M. Settlement of a claim
does not prevent BWC from taking corrective action, including recovery of
benefits against a physician of record, a vendor, a claimant or an employer.
N. Court Settlement: BWC
will process a court settlement in compliance with the terms of the agreement
and as directed by the court.
BWC staff may refer to the
corresponding procedure for this policy entitled “Lump Sum Settlements” for