When an injured worker reaches a point of medical stability or the ability to return to gainful work in their claim, the most common questions are: Can I settle my workers’ compensation claim? How much will I receive?
In Washington State, the answer is “it depends.” Unlike many other states, Washington’s workers’ compensation system — administered by the Department of Labor & Industries (L&I) — does not normally allow full, lump-sum “buyouts” of claims except under very limited exceptions when a self-insured employer is involved. In the vast majority of cases, several options exist for settling different parts of a claim, each with specific rules and consequences.
At Staton Silber, P.S., our attorneys — Robert Silber and Natasha Staton — help injured workers understand these options, make informed decisions about their financial future, and then navigate the complexities of the law and bureaucracy to achieve desired results. Below is an overview of the main types of settlements available under Washington law.
1. Claim Resolution Settlement Agreements (CRSAs)
The most common form of negotiated settlement in Washington is the Claim Resolution Settlement Agreement (CRSA). Created by the Legislature in 2011, CRSAs allow workers aged 50 and older to settle most monetary aspects of their claim while retaining rights to medical benefits for accepted conditions.
A CRSA can cover the value of:
- Time-loss (wage replacement) benefits
- Vocational retraining benefits
- Permanent partial disability
- Total permanent disability
CRSA proceeds may be made in a single lump-sum payment or in installments over time. The Board of Industrial Insurance Appeals (Board) must approve every CRSA to ensure the agreement is in the worker’s best interest. If a worker is not represented by an attorney, the worker must appear at a hearing before the Board for examination and to receive formal approval.
A CRSA may be a good option if:
- Your industrial injury or occupational disease has reached maximum medical improvement (MMI), in other words, further treatment will not result in permanent improvement of your condition.
- You want to avoid lengthy litigation against the Department of Labor and Industries or self-insured employer before the Board of Industrial Insurance Appeals.
- You wish to move on from your claim while still maintaining lifetime medical coverage.
Given a CRSA is meant to resolve all financial value of a claim, this type of workers’ compensation settlement tends to be larger than other types of settlements in L&I. However, because a CRSA permanently ends time loss benefits, retraining rights, and even any claim for total permanent disability, i.e., a pension, it is essential to consult a qualified workers’ compensation attorney before signing any agreement to ensure you are maximizing the value of your claim. Lawyers at Staton Silber, P.S., are particularly equipped to answer any questions and assist you with a CRSA.
Here is a link to an article providing further information about this CRSA option.
2. Permanent Partial Disability (PPD) Award Settlements
A Permanent Partial Disability (PPD) award compensates workers for a measurable loss of function, which has become permanent, due to their industrial injury or occupational disease. Although a PPD is not technically a “settlement,” it often represents the financial closure of a claim once the worker’s industrial injury or occupational disease has reached maximum medical improvement and the injured worker is returned to employability.
Key points about PPD awards:
- Payment is based on the degree of permanent impairment, either in terms of a percentage of impairment or category system, assigned by a qualified medical provider.
- The award is determined by a statutory schedule of benefits and cannot be negotiated.
- The PPD award is paid only once the claim closes.
- The claim can be reopened later if the industrial injury or occupational disease objectively worsens.
In self-insured cases, employers may negotiate timing or payment details as part of a broader claim settlement, but the PPD amount itself is set by law. Here is a link to an article further explaining this PPD settlement option.
3. Vocational Retraining Option 2 (“Opt-Out”) Settlements
If the Department of Labor and Industries determines you cannot return to your job-of-injury or physically suitable employment for which you have relevant skills and, as such, require vocational retraining services, you’ll be assigned a vocational consultant to help you to develop a vocational rehabilitation plan. However, not all workers want or are able to participate in formal retraining.
In these cases, Washington law allows an alternative known as Option 2, sometimes referred to as a vocational opt-out settlement.
Under Option 2, you may:
- Decline the formal retraining plan (Option 1)
- Receive nine months of time-loss compensation (in a single payment upon request)
- Access self-directed retraining funds to use on your own terms for a five-year period
- Close the claim for wage-loss and retraining, while keeping medical benefits open
For many injured workers, Option 2 provides flexibility and faster closure, but it’s vital to understand that it permanently ends eligibility for L&I-funded retraining and time-loss payments. It is not uncommon for L&I or self-insured employers to push for this type of settlement in order to avoid liability for an L&I disability pension. As such, it is critical to consult an attorney before agreeing to an Option 2 settlement.
4. Sidebar Agreements with Self-Insured Employers
Large companies in Washington often manage their own workers’ compensation programs under oversight by the Department of Labor and Industries Self-Insurance Section; these are called self-insured employers. In such cases, workers and employers may negotiate “sidebar agreements” — informal but irreversible settlements that address specific disputed issues outside of a formal CRSA.
Sidebar agreements may involve:
- Paying disputed back time-loss
- Denial of a contended medical condition
- Resolving a claim for permanent total disability, i.e., a pension
- Agreeing to withdraw an appeal or clarify benefit entitlement
These agreements can be practical tools for resolving narrow disputes. They allow an injured worker to receive compensation for a dispute and avoid costly, time-consuming litigation. Even so, these agreements must still comply with Washington workers’ compensation laws. These types of settlements are most commonly negotiated between attorneys for self-insured employers and injured workers.
Key Takeaways
- Washington generally does not allow full lump-sum settlements that forever waive a worker’s right to medical coverage for an accepted condition.
- Claim Resolution Settlement Agreements (CRSAs), Option 2 vocational settlements, and side-bar agreements are the primary ways to partially settle workers’ compensation claims.
- PPD awards provide compensation for permanent impairment, are determined by formal schedules of benefits, and, as such, are not negotiable.
- Sidebar agreements may resolve disputes with self-insured employers but must follow L&I rules.
Each option carries different consequences for your benefits, medical coverage, and ability to reopen your claim. Understanding these differences is crucial before making any decision.
Get Help from Experienced Washington Workers’ Compensation Attorneys
At Staton Silber, P.S., we have decades of combined experience guiding injured workers through the complexities of the Washington State workers’ compensation system. Whether you’re considering a CRSA, vocational opt-out settlement, or PPD award, we’ll help you evaluate your options and protect your rights every step of the way.
Contact Staton Silber, P.S. today for a free consultation to discuss your L&I claim and learn which settlement approach best fits your goals.
