Colorado law allows injured workers to seek compensation for injuries they suffer while on the job. When such injuries prevent use of arms, fingers or legs, the law allows for scheduled payments that correspond with the severity of the particular injury. These payments, whether assigned to permanent partial disability (PPD), permanent total disability (PTD) or death benefits, are based on what the worker would have earned if he or she would not have been injured.
While some workers may prefer monthly workers' compensation benefit payments, others may prefer a lump sum payment - a one-time disbursement for the total value of the injury. This may help some workers because it provides the flexibility to make major life changes to accommodate a disability, such as purchasing a new vehicle or making home improvements. Others may use lump sums to pay off accumulating debts from not being able to work.
Lump sum payments may not be granted for six months after original injury or death. They are subject to a 4 percent per annum discount from the total award, and such payments may not exceed $60,000.
To receive a lump sum payment, an injured worker must send a completed request form to the Workers' Compensation Division of the Colorado Department of Labor and Employment (DLE). A copy must also be sent to the insurer. The form must detail the injury suffered and the payment amount requested. Once received, the insurer must respond to the petition and award payment, or set forth specific reasons denying payment. The insurer may also provide a different amount for the payment.
If counsel represents an injured worker, the process is slightly different. In this process, the attorney will send the petition to DLE and the insurer. The insurance carrier has 10 days to review the claim and issue payment or a denial. Again, the insurer must set forth specific reasons for denying the claim. If you have questions regarding your eligibility for a lump sum payment, contact an experienced workers' compensation attorney.
A smaller lump sum of up to $10,000 is payable upon request, once the carrier has admitted for permanent partial disability benefits. This lump sum can be obtained even if the claimant contests the rating, maximum medical improvement, or the amount of permanent disability being paid. It is also subject to a 4 percent discount.