Around the States
Settlement Agreements • Approval Requirements • Medical Benefits • Lump-Sum Payments
Current reference: September 2026
Workers’ compensation settlements can take many forms. Depending on the jurisdiction and claim circumstances, a settlement may resolve indemnity benefits while leaving medical benefits open, close future medical benefits, commute future payments into a lump sum, or resolve disputed compensability and other issues.
The biggest practical difference among states is how much governmental review is required before a settlement becomes effective.
Some states require a workers’ compensation agency, commission, board, court or judge to approve settlements. Other states permit settlements without substantive agency approval in certain circumstances—particularly when the employee is represented by counsel.
This chart focuses on the principal settlement framework in each state.
50-State Settlement Chart
StateSettlement ApprovalCan Settlement Close Future Medical?Principal Settlement Feature / AuthorityAlabamaGenerally no routine commission approvalYes, subject to settlement terms and applicable lawSettlements are permitted; court approval may become relevant in particular cases involving minors, incompetents or disputed rights. Ala. Code § 25-5-56AlaskaWorkers’ Compensation Board approval required for agreements releasing future liabilityYesBoard reviews agreed settlements and approves only when supported by evidence that approval is in the employee’s best interest. 8 AAC 45.160ArizonaIndustrial Commission approval requiredYesCompromise and settlement agreements are submitted to the Industrial Commission; statutory and administrative requirements apply. Ariz. Rev. Stat. § 23-941ArkansasWorkers’ Compensation Commission approval requiredYesCompromise settlements must be submitted to and approved by the Commission. Ark. Code Ann. § 11-9-805CaliforniaWorkers’ compensation judge approval requiredYesCompromise & Release may resolve future medical; Stipulations with Request for Award generally leave medical open. Cal. Lab. Code §§ 5000–5006ColoradoGenerally no routine preapproval of represented-party settlements; statutory requirements applyYesSettlements are subject to statutory restrictions; Division/ALJ involvement may be required in particular circumstances. Colo. Rev. Stat. §§ 8-43-204, 8-43-207ConnecticutWorkers’ Compensation Commission approval generally requiredYesStipulation agreements are reviewed by the Commission; settlements may resolve future indemnity and medical rights. Conn. Gen. Stat. § 31-315DelawareIndustrial Accident Board approval generally requiredYesLump-sum agreements and settlements are submitted to the Board for approval. 19 Del. C. § 2353FloridaDepends on representationYesRepresented claimants may settle all benefits subject to attorney-fee approval; special statutory approval rules apply to unrepresented settlements. Fla. Stat. § 440.20GeorgiaState Board approval requiredYesStipulated settlements and lump-sum advances are reviewed and approved by the State Board. O.C.G.A. § 34-9-15HawaiiDirector approval requiredYesCompromise settlements generally require approval by the Director of Labor and Industrial Relations. Haw. Rev. Stat. § 386-78IdahoModernized system: most settlements no longer require routine approvalYesSince July 1, 2022, most settlement agreements need not be affirmatively approved, but must be filed with the Industrial Commission. Commission review remains required for pro se parties, minors and legally incompetent persons, and may occur at either party’s request. Idaho Code § 72-404; Idaho Industrial Commission guidanceIllinoisWorkers’ Compensation Commission approval generally requiredYesSettlement contracts are submitted to the Commission for approval; Commission approval is important to finality. 820 ILCS 305/16IndianaWorkers’ Compensation Board approval requiredYesCompromise settlements must be submitted to the Board; Board approval is required for enforceability. Ind. Code § 22-3-4-5IowaWorkers’ Compensation Commissioner approval requiredYesIowa recognizes agreement, compromise, contingent and combination settlements; all settlements must be approved by the Commissioner. Iowa Code § 85.35KansasWorkers’ compensation settlement subject to statutory approval requirementsYesSettlements resolving compensation generally require appropriate filing/approval; Kansas distinguishes settlement from award procedures. Kan. Stat. Ann. § 44-512cKentuckyAdministrative Law Judge approval requiredYesSettlements must be submitted for approval; ALJ reviews the agreement for statutory compliance. Ky. Rev. Stat. § 342.265LouisianaWorkers’ compensation judge approval requiredYesLump-sum or compromise settlements must be presented to a workers’ compensation judge. La. Rev. Stat. § 23:1272MaineWorkers’ Compensation Board approval generally requiredYesAgreements resolving future benefits are submitted for Board review; represented and unrepresented claims receive different procedural treatment. Me. Rev. Stat. tit. 39-A, §§ 221, 222MarylandWorkers’ Compensation Commission approval required for settlement of disputed claimsYesSettlement agreements are submitted to the Commission; Commission considers adequacy and statutory compliance. Md. Code, Lab. & Empl. § 9-722MassachusettsDepartment of Industrial Accidents approval requiredYesSection 48 agreements require administrative approval; settlement cannot circumvent statutory benefit protections. Mass. Gen. Laws ch. 152, § 48MichiganWorkers’ compensation magistrate approval requiredYesRedemption agreements are submitted for approval and can close future liability, including medical, depending upon agreement. Mich. Comp. Laws § 418.835MinnesotaWorkers’ Compensation Division approval generally requiredYesStipulation agreements are submitted for approval; settlements can resolve future indemnity and medical benefits. Minn. Stat. § 176.521MississippiWorkers’ Compensation Commission approval requiredYesLump-sum settlements and agreements are subject to Commission approval. Miss. Code Ann. § 71-3-37MissouriDivision of Workers’ Compensation approval requiredYesSettlements are filed and approved through the Division; final settlements can release future liability. Mo. Rev. Stat. § 287.390MontanaWorkers’ Compensation Court/Department procedures applyYesCompromise settlements may resolve future benefits, but approval requirements depend upon the type of claim and parties involved. Mont. Code Ann. §§ 39-71-741, 39-71-2905NebraskaWorkers’ Compensation Court approval requiredYesCompromise settlements require Court approval; settlement must be found to be in the employee’s best interest. Neb. Rev. Stat. § 48-139NevadaDivision of Industrial Relations approval requiredYesCompromise and release agreements require administrative approval. Nev. Rev. Stat. § 616C.235New HampshireLabor Commissioner approval requiredYesLump-sum settlements require approval under the state’s workers’ compensation statutes. N.H. Rev. Stat. § 281-A:37New JerseyWorkers’ Compensation Court approval requiredYesSettlements are commonly resolved through formal orders/judgments; Section 20 settlements can provide a full and final release. N.J. Stat. Ann. § 34:15-20New MexicoWorkers’ Compensation Administration / judge approval requiredYesCompromise settlements are submitted through the Administration and may resolve future benefits. N.M. Stat. §§ 52-5-12, 52-5-7New YorkWorkers’ Compensation Board approval requiredYesSection 32 agreements require Board approval; Board reviews the proposed agreement before it becomes effective. N.Y. Workers’ Comp. Law § 32North CarolinaIndustrial Commission approval requiredYesCompromise settlements must be approved by the Commission; Commission must determine that settlement is fair and just. N.C. Gen. Stat. § 97-17North DakotaWorkforce Safety & Insurance approval requiredYesLump-sum and settlement arrangements are subject to WSI statutory procedures. N.D. Cent. Code § 65-05-37OhioBWC/Industrial Commission approval generally requiredYesSettlements involving state-fund claims are submitted through BWC/Industrial Commission procedures; self-insured claims follow applicable Commission requirements. Ohio Rev. Code § 4123.65OklahomaWorkers’ Compensation Commission/Court approval requiredYesCompromise settlements are submitted for approval under Oklahoma’s post-2013 workers’ compensation system. 85A O.S. § 47OregonWorkers’ Compensation Division / Workers’ Compensation Board procedures applyYes, but restrictions are significantClaim disposition agreements and disputed claim settlements are governed by detailed statutory and administrative rules. Or. Rev. Stat. §§ 656.236, 656.313PennsylvaniaWorkers’ Compensation Judge approval required for compromise & releaseYesC&R agreements require WCJ approval; judge must determine employee understands the agreement and that it is adequate. 77 P.S. § 1000.5Rhode IslandWorkers’ Compensation Court approval requiredYesLump-sum and structured-type settlements require Court approval and must satisfy the statutory best-interest standard. R.I. Gen. Laws § 28-33-25South CarolinaWorkers’ Compensation Commission approval requiredYesAgreements and settlements are submitted to the Commission for approval. S.C. Code § 42-17-90South DakotaDepartment approval required for lump-sum/compromise settlementsYesSettlements are subject to statutory approval procedures and requirements. S.D. Codified Laws § 62-7-36TennesseeWorkers’ Compensation Appeals Board/Court approval requiredYesSettlements must be approved under the Tennessee workers’ compensation statutory framework. Tenn. Code Ann. § 50-6-240TexasDWC approval generally required for disputed claims; different procedures for agreements and networksYesTexas distinguishes agreements, contested cases and benefit-review procedures; settlement of workers’ compensation benefits is subject to statutory restrictions. Tex. Lab. Code § 408.005UtahLabor Commission approval requiredYesCompromise settlements must be approved by the Utah Labor Commission. Utah Code § 34A-2-420VermontDepartment of Labor approval requiredYesAgreements settling future workers’ compensation liability are subject to Department approval. Vt. Stat. tit. 21, § 662VirginiaWorkers’ Compensation Commission approval requiredYesAgreements are submitted to the Commission; Commission approval is required before a compromise agreement becomes effective. Va. Code § 65.2-701WashingtonDepartment/Board approval depends upon settlement typeLimitedWashington’s structured settlement system is unusual: qualifying structured settlements can close wage-loss benefits while medical benefits generally remain available; other settlement mechanisms have different requirements. Wash. Rev. Code § 51.04.063West VirginiaWorkers’ Compensation Office procedures applyYesSettlement of workers’ compensation claims is permitted subject to statutory requirements and agency approval. W. Va. Code § 23-5-7WisconsinDepartment of Workforce Development approval generally requiredYesCompromise agreements are submitted to DWD; department approval is required for agreements that resolve disputed benefits. Wis. Stat. § 102.16WyomingDivision/Office approval required for compromise settlementsYesCompromise settlements are subject to approval and statutory limitations. Wyo. Stat. § 27-14-601
The first question should not be:
“Does this state allow workers’ compensation settlements?”
Virtually every state permits some form of settlement.
The better question is:
What rights are being settled, and what approval is required for that particular settlement?
A settlement can involve several separate components:
Indemnity
Temporary disability, permanent partial disability, permanent total disability or other monetary benefits.
Medical
Future medical treatment, prescriptions, surgery, rehabilitation and related expenses.
Vocational rehabilitation
Where applicable.
Compensability
Whether the injury or condition is covered by workers’ compensation.
Penalties / interest
Depending on the jurisdiction and settlement language.
Other disputed issues
Attorney fees, liens, offsets and related matters.
1. Indemnity Settlement With Medical Left Open
Under this structure:
Worker receives negotiated monetary benefits
↓
Future medical remains open
↓
Employer/carrier continues responsibility for authorized compensable medical treatment
This can be particularly important when the worker has a significant possibility of future treatment.
California provides a useful illustration.
A Stipulation with Request for Award generally leaves medical care open, while a Compromise & Release can resolve future medical obligations. California’s Division of Workers’ Compensation specifically describes these as two different ways a case can be resolved.
Under a full settlement:
Indemnity
Future medical
Other settled rights
↓
Lump-sum settlement
The employee gives up future rights that are expressly released by the agreement.
The exact scope of the release is highly jurisdiction-specific.
Alaska
Alaska provides a particularly clear example of substantive governmental review.
Under Alaska’s administrative rule, the Board reviews a settlement that releases the employer from future liability and approves it only when the evidence demonstrates that approval is in the employee’s best interest. The Board may also require an independent medical examination before acting on the settlement.
WorkersCompensation.com takeaway: Alaska is not merely a “file the settlement” state. The Board has substantive review authority.
California
California distinguishes between:
Stipulations with Request for Award
The parties agree on disability benefits while medical treatment generally remains available.
Compromise & Release
The parties negotiate a lump-sum settlement that can close future medical care.
California requires workers’ compensation settlements to be reviewed by a workers’ compensation judge to determine whether they are adequate.
Florida
Florida is one of the states where representation status makes an enormous difference.
Under Florida Statute § 440.20, an unrepresented claimant’s lump-sum settlement releasing future medical and compensation benefits is subject to judicial approval under specified circumstances.
For a represented claimant, Florida permits the claimant to waive workers’ compensation benefits through a settlement agreement in exchange for a lump-sum payment. The judge’s approval is directed to the attorney’s fee rather than substantive approval of the settlement itself.
This makes Florida particularly important in a national settlement chart.
It’s not just:
“Florida — approval required.”
The accurate answer is:
Approval depends upon representation and the type of settlement.
Georgia
Georgia’s State Board maintains a dedicated Settlement Division to review and approve stipulated settlements and lump-sum advances. The Board provides specific filing guidance for attorneys, employers, insurers and injured workers.
Georgia Code § 34-9-15 expressly provides for settlements between the employee and employer and establishes the Board’s approval role.
Idaho
Idaho is particularly important because its rules changed significantly.
Effective July 1, 2022, most settlement agreements no longer require affirmative Industrial Commission approval.
However:
- All settlement agreements must be filed with the Commission.
- Settlements involving unrepresented parties are subject to Commission review.
- Settlements involving minors or legally incompetent persons receive Commission review.
- Either party can request Commission review.
- The Commission can approve an agreement when it determines approval is in the parties’ best interests.
Editorial classification:
Idaho — Filing required; approval conditional.
That is much more informative than “approval: no.”
Iowa
Iowa has one of the most structured settlement systems in the country.
The Iowa Workers’ Compensation Division identifies:
- Agreement settlements
- Compromise settlements
- Contingent settlements
- Combination settlements
- Full commutations
- Partial commutations
The Workers’ Compensation Commissioner must approve each settlement. Iowa also requires particular findings for commutations, including consideration of the employee’s need and best interests.
Louisiana
Louisiana requires a lump-sum or compromise settlement to be presented to a workers’ compensation judge.
Where the employee is represented, affidavits can establish that the attorney explained the employee’s rights and the consequences of settlement and that the employee understands those consequences. The judge then approves the settlement by order.
New York
New York’s Section 32 settlement procedure is one of the most recognizable workers’ compensation settlement mechanisms in the country.
A Section 32 agreement can resolve future workers’ compensation benefits, subject to Workers’ Compensation Board approval.
This makes New York particularly different from states in which the parties can simply execute a private settlement agreement.
Pennsylvania
Pennsylvania uses a Compromise and Release Agreement.
A WCJ reviews the settlement and must ensure that the claimant understands the agreement and its consequences before approving it.
The C&R can resolve both indemnity and medical benefits.
This is one of the strongest examples of substantive judicial review of a workers’ compensation settlement.
Rhode Island
Rhode Island expressly permits lump-sum or structured-type payments in lieu of future weekly benefits.
The Workers’ Compensation Court must determine that the settlement is in the best interests of the parties, including the employee, employer, insurer and, where applicable, other interested entities.
Washington
Washington deserves its own box in any national settlement resource.
Washington’s Claim Resolution Structured Settlement Agreement is substantially different from the traditional “close everything for a lump sum” model.
The Social Security Administration’s current state-specific guidance describes Washington structured settlements as potentially closing the claim while not including future medical benefits, meaning medical treatment may remain available under the claim.
That makes Washington an important exception to the assumption that:
“Settlement = medical closed.”
These terms should not be treated as synonyms.
Settlement
The parties compromise disputed or future rights.
Commutation
An existing stream of future compensation is converted into a lump-sum payment, often subject to a present-value calculation and specific statutory requirements.
Iowa provides a particularly clear example. A full commutation can terminate future rights, including medical benefits, while a partial commutation can convert only part of future benefits into a lump sum while leaving other rights intact.
A national settlement resource should also include a prominent warning:
Medicare eligibility can materially affect settlement structure.
A settlement may need to account for Medicare’s interests when future medical expenses are being resolved.
The settlement agreement may therefore contain:
- Medicare Set-Aside analysis
- Allocation of settlement proceeds
- Conditional-payment resolution
- Medicare reporting considerations
- Future medical treatment allocation
These issues are not uniform among the states, and Medicare requirements are federal rather than state workers’ compensation law.
Therefore, the 50-state chart should treat Medicare as a separate federal overlay, rather than assigning a Medicare rule to each state.
A settlement checklist for claims professionals should address:
Liability
- Compensability
- Accepted conditions
- Disputed conditions
- Accident date
- Jurisdiction
Indemnity
- Temporary total disability
- Temporary partial disability
- Permanent partial disability
- Permanent total disability
- Vocational benefits
- Future indemnity
Medical
- Past medical
- Current treatment
- Future medical
- Prescription expenses
- Surgery
- Rehabilitation
Financial
- Gross settlement
- Attorney fees
- Costs
- Liens
- Child support
- Tax considerations
- Medicare considerations
Procedural
- Required settlement form
- Agency/court approval
- Employee representation
- Hearing requirement
- Settlement effective date
- Payment deadline
Release
- What claims are released?
- What conditions are released?
- Is future medical released?
- Are employment claims released?
- Are third-party claims affected?
Before signing a workers’ compensation settlement, determine:
1. What benefits am I giving up?
2. Is future medical care being closed?
3. What happens if my condition gets worse?
4. Does the settlement require governmental approval?
5. Are there Medicare, Medicaid, child-support or other liens/interests that must be addressed?
ClassificationMeaning🟦 Agency ApprovalSettlement requires approval by workers’ compensation agency/commission🟨 Judicial ApprovalJudge/court approval required🟩 Conditional ApprovalApproval depends upon representation, settlement type or other circumstances🟧 Filing / ReviewSettlement is filed but does not routinely require affirmative approval🟥 Private Settlement PermittedParties can settle without routine administrative approval🟪 Special StructureState has a distinctive statutory settlement mechanism
There is no single American workers’ compensation settlement model.
The major differences are:
Who can settle?
What can be settled?
Who must approve it?
Must the agreement be filed?
Can future medical benefits be released?
Can future indemnity be commuted?
Does representation change the approval requirement?
What happens if the claimant is a minor or incompetent?
What federal interests must be considered?
Those questions are much more useful to claims professionals than simply asking whether a state “allows settlements.”
Source & Methodology
The principal cross-jurisdictional framework for this resource is the WCRI/IAIABC Workers’ Compensation Laws as of January 1, 2025, which provides comparative statutory and regulatory information across U.S. workers’ compensation jurisdictions. WCRI/IAIABC notes that the publication contains jurisdiction-specific footnotes and caveats because workers’ compensation systems differ substantially in their definitions and procedures.
For settlement-specific rules, state agency materials and statutory sources should control where available. Examples include Florida’s statutory settlement provisions, Georgia’s State Board settlement procedures, Iowa’s detailed settlement and commutation guidance, Idaho’s post-2022 settlement rules, Louisiana’s settlement-approval statute, California’s settlement guidance, Alaska’s agreed-settlement regulation and Rhode Island’s lump-sum settlement statute.
Last reviewed: September 2026
Disclaimer: This chart is an educational and research reference and is not legal advice. Settlement requirements can depend upon date of injury, claim status, representation, settlement type, disputed issues, medical status, minors/incompetent parties, liens, Medicare interests and other jurisdiction-specific circumstances. The applicable statute, regulation, agency rule and case law should be reviewed before relying upon any entry for a particular claim.
