Once your workers’ compensation case reaches the end of treatment, you may be eligible to settle your claim. But what kind of settlement should you accept? In California, there are two main types: a Compromise & Release (C&R) and a Stipulated Award.
Each settlement type has important pros, cons, and consequences for your medical care, future employment, and overall payout. Here’s the full breakdown from Employees First Labor Law (EFLL) so you can settle your case the smart way.
1. When Can You Settle a Workers’ Comp Case?
You can settle your workers’ comp case once you reach MMI — Maximum Medical Improvement — which means your condition is stable and unlikely to change. At this point, your doctor issues a Permanent Disability (PD) rating, and your claim is eligible for resolution.
You may also settle earlier in some cases, if your injury is minor or the insurer wants to close the file quickly — but you should never settle without understanding your rights or consulting counsel.
2. Types of Workers’ Compensation Settlements
A. Stipulated Findings and Award (“Stips”)
A Stipulated Award is a settlement where:
- You and the insurance company agree to your PD rating, weekly benefit amount, and duration.
- You receive biweekly payments over time.
- Your future medical care remains open for life (for the accepted injury only).
- The Workers’ Compensation Appeals Board (WCAB) issues an official award enforceable by the court.
Good for: Workers who want continued treatment or may need surgery later.
B. Compromise & Release (C&R)
A C&R settlement is a lump-sum buyout that:
- Pays all benefits up front, including Permanent Disability, future medical, and sometimes unpaid Temporary Disability (TD).
- Closes your case permanently — including your right to any more medical care.
- Usually results in a higher overall payout than Stips.
- Requires a signed agreement and WCAB approval.
Good for: Workers who want closure, don’t want to deal with insurance anymore, or plan to seek care outside the workers’ comp system (e.g., through private insurance or Medicare).
A sample Compromise & Release form can be found here: Sample 1 and Sample 2.
3. Key Differences: C&R vs. Stipulated Award
| Feature | Stipulated Award | Compromise & Release (C&R) |
|---|---|---|
| Payment Method | Biweekly checks | One-time lump sum |
| Future Medical | Stays open | Closed permanently |
| Court Involvement | Approved as award | Approved as settlement |
| Flexibility | May reopen for new disability | Final closure |
| Negotiable Amount | Limited to rating | Highly negotiable |
| Time to Get Paid | Paid over time | Paid quickly in one check |
🧠 Example: A delivery driver with a 15% PD rating and open back surgery recommendation may choose Stips to preserve treatment rights. Another with the same rating but who wants to move out of state and never return to that job may prefer a C&R.
4. What If I Have a Medicare Set-Aside?
If you’re a Medicare beneficiary (or likely to become one within 30 months), CMS may require a Medicare Set-Aside (MSA) as part of any C&R settlement. This allocates part of your settlement for future medical care.
💡 Pro tip: EFLL helps clients structure C&R settlements to comply with MSA requirements and avoid Medicare coverage issues.
5. Can I Reopen My Case After Settlement?
When your workers’ compensation case settles, your ability to reopen it depends entirely on how the case was resolved. In California, there are two main types of workers’ comp settlements: Compromise & Release (C&R) and Stipulated Findings and Award (Stipulated Award). Each has different consequences.
Compromise & Release (C&R): Final and Non-Reopenable
A Compromise & Release is a full and final settlement. In exchange for a lump-sum payment, you agree to close your entire case—including any rights to future medical treatment or additional benefits.
Once a C&R is approved by the Workers’ Compensation Appeals Board (WCAB), it is final. You cannot reopen your case later—even if your condition worsens.
⚠️ Caution: This is why it’s critical to consult an attorney before agreeing to a C&R, especially in serious or long-term injury cases.
Stipulated Award: Reopenable Under Specific Conditions
A Stipulated Award is different. It typically provides:
- Ongoing payments for permanent disability
- Access to future medical treatment
The case remains technically “open,” and you may be able to reopen it later if your condition gets worse.
When Can You Reopen a Stipulated Award?
You can file a Petition to Reopen for new and further disability under California Labor Code § 5410 if:
- Your condition has worsened significantly (e.g., additional surgeries, loss of mobility)
- There is new evidence of increased disability
- It’s still within 5 years of the date of injury
🗓️ Important: The 5-year limit runs from the date of injury, not from the date of settlement or last payment. You must act before that window closes.
6. Don’t Settle Without Legal Help
Insurance companies often:
- Lowball PD ratings
- Delay MMI status to avoid paying
- Pressure injured workers to settle early
- Dispute or undervalue medical needs (e.g., surgery or injections)
At EFLL, we:
- Negotiate both types of settlements to full value
- Get second opinions and QME evaluations if needed
- Challenge unfair disability ratings
- Protect your right to future medical care — or maximize cash-out if you prefer C&R
7. Ready to Settle? Let EFLL Guide You
Whether you want a clean break with a C&R or ongoing care with a Stipulated Award, Employees First Labor Law will protect your rights and help you make the right choice.
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