201-880-7213

Firm News

Settlements in New Jersey: What gets deducted?

What does the petitioner have to pay back when a settlement is reached in a New Jersey workers’ compensation case?

Has to be paid back: State Disability

Any petitioner’s award is offset by any amounts paid to the petitioner by State Disability as provided by N.J.S.A. 34:15-57.1. Temporary disability paid by the state for injuries later deemed compensable or settled via Section 20 must be reimbursed to the state. Before settling a case, counsel should be expected to investigate all outstanding liens. The New Jersey workers’ compensation law judge can provide the parties with the amount of the State temporary disability lien at the time of settlement.

Has to be paid back: Health Insurance

By the very terms of the Act, workers’ compensation insurance is primary to medical insurance. Therefore, any amounts paid on behalf of the petitioner for treatment deemed by a judge “reasonable and necessary” to cure the petitioner of the effects of the work-related accident, can be collected by the health insurer at the time of settlement, or later. Recent case law instructs that even matters disposed of pursuant to Section 20 may not extinguish a health insurer’s lien.

The New Jersey Supreme Court has held that settlements made pursuant to N.J.S.A. 34:15-20 only resolve issues between those who were parties to that agreement. Hence, where a medical provider was not a party to the Section 20 settlement, it is not bound by that agreement and may pursue an action in the Law Division to enforce its contractual rights to payment for the medical services it provided to the petitioner. See Christodoulo v. University of Mass. Memorial Medical Center, Inc., 180 N.J. 334 (2004).

Gets an Offset: Pensions

Workers’ Compensation benefits should be offset by the petitioner’s ordinary disability retirement benefits, where the disability income is provided secondary to the same injury. Rosales v. State of New Jersey, 373 N.J. Super. 29 (App. Div. 2004), cert. denied, 182 N.J. 630 (2005).

Has to be paid back or set aside: Medicare.

As per the Medicare Secondary Payer Act, workers’ compensation is always primary to Medicare.

Has to be paid: Child Support

In reviewing the term “net proceeds” in N.J.S.A. 2A:17-56.23b concerning child support liens, the Appellate Division found that the first $2,000.00 of recovery by an individual, after allowances and litigation expenses, is not subject to the statutory automatic lien provisions of this statute. A child support lien does not apply to the first $2,000.00 of the net proceeds from a settlement. See Simpkins v. Adolfo Saiani, 356 N.J. Super. 26 (App. Div. 2002).

Has to be paid back: Motor Vehicle Medical Payments.

By the terms of the New Jersey Workers’ Compensation Act, workers’ compensation benefits are primary to New Jersey “PIP” (Personal Injury Protection) benefits.

Join In the Learning!

Register for our monthly webinars on New York workers’ compensation law, by clicking here. Sign up for our monthly newsletter below.

Download the New Jersey Workers’ Compensation Law Handbook

Download Our New Jersey Workers’ Compensation Law Handbook

This is the 2023 edition of Gregory Lois’New Jersey Workers’ Compensation Law Handbook.”

THE MOST PRACTICAL, up-to-date, and easy-to-understand guide to workers' compensation claims in New Jersey. This book is designed for employers, attorneys, claim adjusters, physicians, self-insured employers, and vocational rehabilitation workers. This guide is written in plain English by a New Jersey State attorney and provides a detailed analysis of relevant statutes and regulations; a complete recap of recent court decisions including 2021 & 2022 cases; and a full description of current practice.

Download Now

Learn More About New Jersey Workers’ Compensation Defense at LOIS

For more than 20 years we have represented insurance carriers, self-insured employers, third party claim administrators, and employers before New Jersey’s Division of Workers’ Compensation. Our founding partner, Gregory Lois, is co-author of the LexisNexis “Practice Guide to Workers’ Compensation in New Jersey” (2017, ISBN:9781632838735) and served as Law Clerk to Hon. Joan Mott, Administrative Supervisor of Workers Compensation.

Along with partners Karen Vincent and Joe Jones (New Jersey Practice Group Team Leader) and a dedicated team of experienced attorneys and paraprofessionals, we handle New Jersey cases from cradle-to-grave. We want to be by your side, moving cases aggressively to closure from the start of litigation all the way through to settlement.

We only assign one attorney and one paralegal to each case. The attorney/paralegal assignments are made based on the court the case will be listed in.

Learn More

Get articles delivered to your inbox, once a month.

Subscribe Today!