How Much Is My Minnesota Workers’ Compensation Case Worth?

One of the first questions many injured workers ask is:

“How much is my workers’ compensation case worth?”

It is an entirely reasonable question.

Unfortunately, there is no reliable “average Minnesota workers’ compensation settlement,” and there is no formula that can determine the value of a case simply by entering your age, injury, and weekly benefit rate into a calculator.

Two employees can suffer similar injuries and have dramatically different settlement values.

Why?

Because the value of a Minnesota workers’ compensation claim depends not just on the medical diagnosis, but on the future benefits potentially owed, the employee’s ability to earn a living, future medical needs, permanent disability, vocational issues, and the legal risks faced by both sides.

A meaningful settlement evaluation requires looking at the entire claim.

What Determines the Value of a Minnesota Workers’ Compensation Settlement?

Several factors can substantially affect settlement value.

They include:

your pre-injury earnings;
your workers’ compensation rate;
whether you are currently working;
how much you are currently earning;
whether your work restrictions are temporary or permanent;
whether you can return to your pre-injury occupation;
your age;
your education and work history;
the number of weeks of wage-loss benefits potentially remaining;
permanent partial disability;
future medical treatment;
potential surgery;
vocational rehabilitation or retraining;
whether the insurer has accepted or denied liability;
competing medical opinions;
whether you have reached maximum medical improvement;
the strength of the medical causation evidence;
the likelihood of succeeding at hearing; and
what benefits are being closed by the proposed settlement.

A good settlement evaluation does not focus on a single number.

It asks:

What benefits could this employee reasonably receive if the case does not settle?

Then it evaluates the likelihood, timing, and risk associated with obtaining those benefits.

There Is No Standard Settlement Amount for a Particular Injury

You may find websites suggesting that a shoulder injury, back injury, knee injury, or other condition has an “average” settlement value.

Those figures are rarely useful in evaluating an individual Minnesota workers’ compensation claim.

Consider two employees who both undergo rotator cuff surgery.

The first employee returns to the same job at the same wage without permanent restrictions.

The second employee receives permanent restrictions preventing a return to a physically demanding occupation the employee has performed for 30 years.

Although the medical diagnosis may be similar, the economic consequences are completely different.

The second employee may face years of reduced earning capacity, vocational rehabilitation, possible retraining, and substantially greater future wage-loss exposure.

The injury matters. But what the injury does to the person’s ability to work can matter even more.

Wage-Loss Benefits Are Often a Major Part of Settlement Value

One of the first things we evaluate is potential future wage-loss exposure.

Minnesota workers’ compensation provides different types of wage-loss benefits, including:

temporary total disability;
temporary partial disability; and
permanent total disability.

The potential value of those benefits can vary enormously.

Temporary Total Disability

Temporary total disability, or TTD, is generally payable when an employee is medically unable to work because of the work injury and meets the applicable statutory requirements.

An important settlement question is:

How many weeks of potential TTD remain, and how likely is the employee to qualify for them?

For example, suppose an injured worker has a compensation rate of $1,200 per week.

Fifty weeks of TTD represents $60,000 in potential benefits.

One hundred weeks represents $120,000.

That does not mean an insurer will simply pay the mathematical maximum as a settlement.

The parties still have to consider whether the employee is likely to remain entitled to TTD, whether employment may become available, whether maximum medical improvement affects the claim, and other legal and factual risks.

But the calculation provides an important starting point for understanding the insurer’s potential exposure.

Temporary Partial Disability Can Be Extremely Valuable

Temporary partial disability, or TPD, is one of the most important—and sometimes undervalued—components of a Minnesota workers’ compensation case.

TPD may be payable when an injured employee returns to work but earns less because of disability resulting from the work injury.

For example, an employee who previously earned $1,800 per week but can now earn only $1,000 because of permanent restrictions may have substantial ongoing TPD exposure.

When evaluating settlement, we consider:

the employee’s pre-injury average weekly wage;
current earnings;
the amount of weekly TPD;
the number of weeks potentially remaining;
likelihood of future wage increases;
likelihood that earnings will improve;
permanent restrictions;
vocational prospects; and
whether the current wage loss is likely to continue.

A relatively modest weekly TPD benefit can become substantial when projected over a long period.

That is one reason looking only at the employee’s current weekly check can dramatically underestimate the value of a claim.

Permanent Total Disability Can Change the Entire Value of a Case

Some injuries permanently prevent an employee from maintaining substantial gainful employment.

In appropriate cases, the employee may claim permanent total disability, or PTD.

Potential PTD exposure can materially change settlement negotiations because the claim may involve substantial future wage-loss benefits.

These cases require careful evaluation of more than the employee’s medical diagnosis.

Important considerations can include:

age;
education;
transferable skills;
work history;
physical restrictions;
psychological conditions where compensable;
ability to perform sustained work;
vocational expert opinions;
Social Security disability status;
labor-market evidence; and
the interaction of multiple medical conditions.

A settlement involving potential permanent total disability should not be evaluated as though it were simply a settlement of a particular body-part injury.

The economic impact on the employee may be much larger.

Permanent Partial Disability Is Another Component

Permanent partial disability, or PPD, compensates an injured worker for permanent functional impairment.

Minnesota uses disability schedules to determine the percentage of permanent partial disability associated with qualifying medical findings.

The PPD rating is then converted into a monetary benefit under the applicable workers’ compensation law.

When evaluating a settlement, important questions include:

Has PPD already been paid?
Has the treating doctor issued a rating?
Has the IME physician issued a different rating?
Is the employee entitled to additional PPD?
Are multiple body parts involved?
Is further surgery likely to change the ultimate rating?

PPD may be only one piece of the settlement.

In a significant wage-loss case, the value of future earning-capacity benefits may substantially exceed the value of the PPD rating itself.

Your Compensation Rate Matters

Workers’ compensation wage-loss benefits are tied to the employee’s pre-injury earnings, subject to Minnesota’s statutory calculation rules and benefit limits.

That means two employees with identical injuries may have different settlement values simply because they earned different amounts before the injury.

An employee with a high average weekly wage may create considerably greater future indemnity exposure than an employee earning substantially less.

That is why determining the correct average weekly wage and compensation rate is an important part of evaluating settlement.

Even a relatively small error in the weekly rate can become significant when projected over years of potential benefits.

Age Can Matter—But Not in the Way People Sometimes Assume

There is no simple rule that an older or younger employee automatically has the more valuable claim.

Age interacts with many other factors.

A younger employee with permanent restrictions may face decades of reduced earning capacity.

An older employee with a long history in a physically demanding occupation may have few realistic opportunities to transition into another type of work.

Age may therefore affect:

employability;
retraining feasibility;
future wage-loss exposure;
permanent total disability arguments;
retirement issues; and
the value of future medical benefits.

Age is part of the analysis, not a stand-alone settlement formula.

Permanent Work Restrictions Can Be More Important Than the Diagnosis

When evaluating settlement value, one of the questions we consider most carefully is:

What can this person realistically do for work for the rest of his or her working life?

That can be more important than the name of the injury.

Permanent restrictions involving lifting, standing, walking, repetitive use, overhead work, bending, reaching, or hours worked may eliminate an employee’s previous occupation.

If the employee has spent decades performing physical work and has few transferable skills for lighter employment, those restrictions can have substantial economic consequences.

Conversely, an employee who returns to a well-paying job with no wage loss may have much less future indemnity exposure even after significant medical treatment.

The settlement should reflect the economic consequences of the injury, not simply the diagnosis appearing on an MRI.

Your Education and Work History Matter

Workers’ compensation cases involve real people, not theoretical labor-market participants.

We therefore look at:

education;
literacy;
computer skills;
licenses and certifications;
English-language ability where relevant;
transferable skills;
previous occupations;
physical nature of past employment;
supervisory experience;
geographic labor market; and
actual ability to obtain suitable work within the employee’s restrictions.

An employee who can realistically transition into comparable-paying employment presents a different future exposure than an employee whose entire work history consists of jobs now medically prohibited.

This is one area where vocational evidence can significantly affect settlement value.

Retraining Can Create Significant Exposure

Minnesota workers’ compensation may provide vocational retraining in appropriate cases.

Retraining can involve formal education intended to return an injured employee to suitable gainful employment.

A viable retraining claim may materially affect settlement value because the insurer’s potential exposure can include not only the cost of schooling but also wage-loss benefits and other rehabilitation expenses associated with an approved retraining plan.

Therefore, when an injured employee cannot return to the pre-injury occupation, settlement analysis should sometimes include the question:

What happens if this employee pursues retraining instead of settling?

Ignoring potential retraining exposure can undervalue a claim.

Future Medical Treatment Can Be Extremely Important

A Minnesota workers’ compensation settlement may leave future medical benefits open, close some medical benefits, or close future medical treatment more broadly depending on the agreement.

That distinction can dramatically affect settlement value.

Before agreeing to close future medical benefits, consider what treatment may reasonably be required.

For example:

additional surgery;
revision surgery;
injections;
pain management;
medications;
physical therapy;
diagnostic imaging;
durable medical equipment;
specialist visits; and
long-term treatment for chronic conditions.

A settlement that includes closure of significant future medical exposure should not be evaluated the same way as a settlement that leaves reasonable and necessary work-related medical treatment open.

A Future Surgery Can Change Settlement Value Substantially

Suppose an orthopedic surgeon says an employee is likely to need another surgery.

That future surgery may have economic consequences beyond the cost of the procedure itself.

It can involve:

hospital expenses;
surgeon and anesthesia charges;
post-operative therapy;
medications;
additional time off work;
renewed TTD exposure;
additional PPD; and
potentially different permanent restrictions.

Closing that exposure transfers the risk from the insurance company to the injured worker.

The settlement should be evaluated with that transfer of risk in mind.

Open Medical Versus Closed Medical Matters

Many injured workers focus on the lump-sum amount and overlook what the settlement language says about future medical treatment.

That can be a serious mistake.

A settlement of wage-loss benefits with future medical benefits remaining open is materially different from a full, final, and complete settlement that closes future medical claims.

A larger check today is not automatically the better settlement if it requires the employee to assume substantial future medical costs and risks.

The settlement documents must be read carefully to determine exactly what is being closed and what remains open.

Medicare Can Affect Settlement Planning

For some injured workers, Medicare’s interests must be considered when settling future workers’ compensation medical benefits.

This issue may arise particularly when an employee is a Medicare beneficiary or is expected to become Medicare-eligible within an applicable period.

Depending on the case, settlement planning may involve consideration of a Medicare Set-Aside arrangement or other measures designed to account for Medicare’s interests.

The existence of significant future medical treatment can therefore make settlement considerably more complicated than simply negotiating a lump-sum payment.

Whether the Insurance Company Has Accepted the Claim Matters

Settlement value is not determined solely by calculating the maximum possible benefits.

The strength of the underlying claim matters.

Consider two cases with identical potential exposure.

In the first, the insurer accepts the injury, treating doctors support permanent restrictions, and the medical and vocational evidence strongly supports ongoing wage loss.

In the second, the insurer denies that the work injury caused the employee’s condition and has a well-supported IME opinion on causation.

The theoretical maximum exposure might be similar.

The settlement value may not be.

That is because settlement reflects both:

potential exposure and litigation risk.

Medical Causation Can Have a Major Effect on Settlement

A workers’ compensation insurer may argue that an employee’s symptoms result from:

degeneration;
arthritis;
a prior injury;
a personal medical condition;
an intervening incident;
natural aging; or
another non-work cause.

The employee’s treating physician may instead conclude that the work injury is a substantial contributing cause.

Those competing opinions can materially affect settlement negotiations.

The stronger the medical support for the employee’s position, the greater the insurer’s litigation exposure may become.

That is why obtaining a thoughtful, well-founded medical opinion can sometimes change the settlement posture of a case significantly.

An IME Can Affect Settlement Value—But It Does Not Automatically Determine It

The insurance company may obtain an independent medical examination.

The IME physician may conclude that:

the injury has resolved;
no further treatment is necessary;
the employee can work without restrictions;
the employee has reached MMI;
proposed surgery is unnecessary;
current symptoms are unrelated to work; or
the employee has little or no permanent disability.

Those opinions can affect the insurer’s willingness to pay.

But the IME report is only evidence.

The treating physician may disagree, and a compensation judge may ultimately have to decide which medical opinion is more persuasive.

Settlement evaluation requires considering the IME as a litigation risk—not automatically accepting it as the value of the case.

How Strong Is the Evidence?

A large part of settlement evaluation is asking what would happen if the case went to hearing.

We consider questions such as:

Are the employee’s doctors supportive?
Are their opinions adequately explained?
Are there significant inconsistencies in the medical records?
Is the employee credible?
Is there a documented job search?
What does the QRC say?
Are the employee’s restrictions permanent?
Is suitable work realistically available?
How persuasive is the insurer’s IME?
Are there surveillance or other evidentiary issues?
What testimony will the employer offer?
What is the likely range of outcomes before a compensation judge?

No attorney can guarantee the result of litigation.

But identifying the strengths and weaknesses allows an informed assessment of settlement value.

Settlement Value Is Not the Same as Maximum Possible Exposure

This distinction is critical.

Suppose an insurer faces $250,000 in theoretical future benefit exposure.

That does not necessarily mean the case is worth $250,000 in settlement.

Why?

Future benefits may never all become payable.

The employee could:

return to higher-paying employment;
improve medically;
stop qualifying for a particular benefit;
lose a contested issue at hearing; or
resolve the claim through another mechanism.

Similarly, benefits payable years in the future do not necessarily have the same present economic value as benefits payable today.

Settlement negotiations therefore typically involve discounting potential future exposure for:

litigation risk;
future contingencies;
timing; and
the certainty provided by a present settlement.

The important question is whether the amount of that discount is reasonable under the circumstances.

Why the Insurance Company’s First Offer May Not Reflect the Full Value of the Claim

An insurer’s settlement offer represents what the insurer is willing to pay at that point in time.

It does not necessarily represent an objective valuation of everything the employee may potentially receive.

Before evaluating an offer, we want to know:

What benefits is the insurer buying out?

What is the potential dollar exposure for those benefits?

What are the strongest arguments for the employee?

What are the insurer’s strongest defenses?

What is likely to happen if the employee does not settle?

Without answering those questions, it is difficult to determine whether an offer is reasonable.

Timing Can Affect Settlement Value

A case may become more or less valuable as facts develop.

For example, settlement posture may change after:

surgery;
maximum medical improvement;
permanent restrictions;
a PPD rating;
an IME;
a failed return to work;
completion of job-placement services;
development of a retraining plan;
a favorable medical report;
deposition testimony;
a mediation; or
a workers’ compensation hearing.

Sometimes an early settlement makes sense.

Sometimes waiting until the medical or vocational picture becomes clearer is substantially more advantageous.

The question is not simply:

“Can I settle now?”

It is also:

“Is now the right time to settle?”

Should I Settle My Minnesota Workers’ Compensation Case?

There is no universal answer.

Settlement can provide important advantages.

It may give an employee:

financial certainty;
control over a lump sum;
an end to ongoing litigation;
freedom from repeated disputes with the insurer; and
the ability to move forward without continued workers’ compensation administration.

But settlement also involves giving up rights.

Depending on the agreement, an employee may permanently give up the right to claim:

future TTD;
future TPD;
permanent total disability;
additional PPD;
vocational rehabilitation;
retraining;
future medical treatment; or
other workers’ compensation benefits.

Once those rights are closed, reopening an approved settlement is difficult and permitted only in limited circumstances under Minnesota law.

A settlement therefore should be evaluated based not only on the check being offered today, but also on what the employee is giving up tomorrow.

What Is a Stipulation for Settlement?

Most Minnesota workers’ compensation settlements are documented through a written Stipulation for Settlement.

The stipulation identifies the parties, describes the claims and disputes, states the terms of the agreement, and explains which benefits are being resolved or closed.

When required, the settlement is submitted for approval and an Award on Stipulation is issued.

The settlement documents matter.

Terms such as “full, final and complete,” future medical closure, rehabilitation closure, and reservation of particular claims can have substantial consequences.

An injured employee should understand exactly what rights are being resolved before signing.

Can I Settle Only Part of My Claim?

Yes.

A settlement does not necessarily have to resolve every possible workers’ compensation benefit.

Depending on the circumstances, parties may resolve some issues while leaving others open.

For example, a settlement might resolve disputed wage-loss claims while preserving certain future medical benefits.

The important point is that the specific language of the settlement controls what is being resolved.

Never evaluate a settlement solely by looking at the gross dollar amount.

How Does a Workers’ Compensation Attorney Evaluate a Settlement Offer?

A thorough evaluation should involve more than simply comparing the offer to previous settlements.

When evaluating a Minnesota workers’ compensation case, we may calculate and analyze:

Potential remaining TTD exposure
Potential TPD exposure
Possible permanent total disability exposure
Unpaid or disputed PPD
Future medical exposure
Potential surgery
Rehabilitation expenses
Possible retraining exposure
Average weekly wage and compensation rate
Permanent restrictions
Age and work-life considerations
Education and transferable skills
Current and likely future earning capacity
Medical causation evidence
Treating-doctor opinions
IME opinions
Vocational evidence
Likelihood of succeeding at hearing
Benefits already paid
Exactly which rights the proposed settlement would close

Then we consider the risks on both sides.

That produces a much more meaningful picture than asking what another employee received for a superficially similar injury.

A Simple Example

Consider an employee who earned $1,800 per week before a work injury.

After surgery, the employee receives permanent restrictions and can earn only $1,100 per week in suitable employment.

A settlement analysis should not stop with the employee’s PPD rating.

We would want to evaluate:

the weekly TPD benefit generated by the $700 wage difference;
how long TPD might continue;
whether the wage gap is likely to narrow;
whether the employee can realistically return to higher-paying work;
whether retraining could become appropriate;
whether permanent total disability is a realistic issue;
whether additional surgery is anticipated;
future medical exposure;
the strength of the medical restrictions; and
the likelihood that the insurer could successfully terminate or reduce benefits.

A settlement that ignores those future economic consequences may significantly undervalue the claim.

The Best Settlement Is Not Always the Largest Check

The largest gross settlement is not automatically the best outcome.

For one employee, preserving future medical treatment may be extremely important.

Another employee may strongly prefer a complete resolution that eliminates future dealings with the workers’ compensation insurer.

A younger worker may need to think carefully about decades of future earning capacity.

An older employee with substantial permanent restrictions may face different vocational and retirement considerations.

The right settlement depends on both the economic value of the claim and the employee’s individual circumstances and goals.

When Should I Talk to a Workers’ Compensation Attorney About Settlement?

Consider obtaining legal advice before accepting a settlement if:

the insurer has made you an offer;
you have permanent restrictions;
you cannot return to your old job;
you are earning less because of the injury;
you may need future surgery;
the insurer wants to close future medical treatment;
you have been declared at MMI;
you have a permanent partial disability rating;
you are receiving TTD or TPD;
retraining may be an option;
permanent total disability may be an issue;
Medicare considerations are involved; or
you simply do not know whether the amount being offered is fair.

Once a settlement is approved, changing it later can be difficult.

It is worth understanding the claim before giving up future rights.

Minnesota Workers’ Compensation Settlement Attorneys for Injured Workers

Lemmon & Tanasychuk, LLC represents injured employees throughout Minnesota.

We represent workers—not employers or insurance companies.

One of the most important things we do for our clients is evaluate the full value of a workers’ compensation claim before recommending settlement.

That means looking beyond the immediate settlement offer.

We evaluate potential future wage loss, permanent restrictions, permanent disability, medical treatment, vocational issues, retraining exposure, and the legal risks facing both sides.

Our goal is to help our clients understand not only what the insurance company is offering, but also what they may be giving up in exchange for that offer.

If you have received a workers’ compensation settlement offer—or simply want to understand what factors may affect the value of your Minnesota workers’ compensation claim—contact Lemmon & Tanasychuk, LLC for a free consultation.

This article provides general information concerning Minnesota workers’ compensation law and is not legal advice. Settlement value depends on the individual facts of each claim. No attorney can guarantee a particular settlement or litigation outcome.