R.C. 4123.88; O.A.C. 4123-3-34
Percy, Chief of Operational Policy, Analytics & Compliance (Signature on
Policy and Legal Services
# CP-12-01, effective 11/14/2014
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.
Workers’ Relief Fund (DWRF): A special fund that supplements the benefits
received by permanently and totally disabled injured workers whose benefits fall
below the current cost of living.
Settlement: 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 any party to a claim.
B. Requirements for Initiating an Administrative
1. It is the policy of
BWC that an
administrative settlement request must be submitted to BWC on the most recent
version of a Settlement Agreement and Application for Approval of Settlement
Agreement (C-240) form. To avoid delays in processing or the possibility of disapproval, the C-240:
a. Must be filled out in
its entirety including a statement indicating why the proposed settlement is deemed desirable; and
b. Include supplemental forms
and/or documentation as indicated on the C-240.
2. 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.
i. If the 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.
ii. If the 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 policy).
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
must sign the C-240 unless one of the following exceptions apply, pursuant to
i. The employer is no
longer doing business in Ohio;
ii. The claim 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.
c. If the 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
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.
i. If the employer does not respond within 30 days, BWC will process the
without the employer’s signature.
ii. If the employer
responds and objects in writing to the settlement application, BWC will
disapprove the settlement application.
e. If the employer’s
state fund risk has been combined, and the combined-risk employer is now
self-insuring, the employer’s signature is required when Disabled Workers’
Relief Fund (DWRF) benefits will be paid as part of the state fund settlement, even if the claim is
out of the employer’s experience.
f. All signatures required on the C-240 must be dated no more than 18 months prior to the date of filing.
C. BWC Authority
1. BWC approval is required
before any administrative settlement becomes final.
2. It is the policy of
independently evaluate and determine a fair settlement value and attempt, as
appropriate, to facilitate agreement between the parties.
3. If the employer has indicated, by checking “box A” on the C-240, that it is supportive and
up to the amount listed on the C-240, BWC will consider 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);
c. Is the employer
experience-rated and is
claim within the policy year experience period;
d. Does the settlement exceed
the claim’s maximum value
as determined by BWC;
e. Can the settlement be
D. 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 and/or BWC;
b. A party does not
agree to settle;
c. The 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.
E. 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:
i. Is on Social Security
ii. Is age 62½ or
iii. Has applied for SSD;
iv. Has had an adverse
decision regarding SSD but has appealed the denial; or
v. Suffers 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
c. Provides the name of
the bank or financial institution where the account will be located.
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).
F. 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; or
3. The claimant’s
original signature is required.
G. Approval of a
Settlement Application, 30-Day Waiting Period and Industrial Commission (IC) Review
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.
c. On-going compensation
and medical benefits are suspended effective the mailing date of the approval
2. Withdrawal from
a. Any party may
withdraw from a settlement prior to the expiration of the 30-day waiting
b. The withdrawal must
be in writing and sent to all other parties to the settlement.
c. BWC must 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.
c. If the IC does not
disapprove a settlement within the 30-day waiting period, the settlement is
approved by operation of law.
H. Death of the Claimant
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
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.
I. For the 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.
J. 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.
K. Self-Insured (SI)
1. Settlements with a
self-insuring employer must be filed on the Self-Insured Joint Settlement Agreement
and Release (SI-42)
2. The SI employer will process the
3. The IC will review
and approve or disapprove SI settlement agreements.
L. 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.
M. 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 further