Compliance Corner
Under Iowa law, the Workers’ Compensation Commissioner must approve all settlements involving work injuries. As Simply Research subscribers know, the Hawkeye State allows four different types of settlements:
(1) Full Commutation
A full commutation pays all remaining future benefits in one lump sum. Because an approved full commutation ends all right to additional weekly benefits and may end all rights to medical benefits, it must show that the worker has a specific need for the full benefit payment now, such that the lump sum payment is in the worker’s best interest.
(2) Partial Commutation
A partial commutation pays a part of remaining future weekly benefits in a lump sum. An approved partial commutation contains the worker and employer’s (and its carrier’s) agreement that the worker is entitled to disability benefits. It does not end the worker’s right to future weekly or medical benefits.
(3) Agreement for Settlement
An agreement for settlement is a voluntary agreement between the worker and the employer (and its carrier) as to the amount and type of compensation payments the worker is currently due. The Workers’ Compensation Commissioner’s approval of the agreement does not end the worker’s future rights to additional weekly benefits or additional medical benefits.
(4) Compromise Settlement
A compromise settlement is a voluntary agreement between the worker and employer (and its carrier) as to the worker’s entitlement to benefits. An approved compromise settlement ends any rights to future weekly benefits and may end all rights to medical benefits for the settled injury.
