The Workers' Compensation Division (WCD) must approve settlements of workers' compensation claims.
Types of Settlements
The law provides for the following six types of settlements. The Workers' Compensation Commissioner must approve each settlement. The two fundamental types of settlements:
Agreement for Settlement
Compromise Settlement
The four remaining types of settlements are used in conjunction with one of the above. All settlements must be submitted on the prescribed forms.
The WCD will not approve a second compromise settlement for the approval of an MSA set aside. A file stamped addendum is all that will be accepted for filing. The addendum can then be attached to the original settlement and send to CMS. If a reliable source informs WCD that CMS is not accepting that as compliant, the division will revisit the issue once what CMS actually requires is clear.
Iowa Code Sections 85.35, 86.13
The parties may enter into an agreement resolving the amount and extent of compensation payment due. File the settlement with the Workers' Compensation Commissioner. A settlement approval confirms that the claim is valid. It also ensures the employee's rights are protected going forward.
When there is a disagreement about the employee's benefits, the parties may file a compromise settlement with the Workers’ Compensation Commissioner.
If approved, the compromise settlement ends both parties' future rights to benefits related to the settled injury.
Any settlement can include a condition that depends on a specific future event. If a settlement is contingent on an event that doesn't happen, the settlement and its approval may be canceled. Contingent settlements are often used when court or Medicare approval is also required.
A combination settlement establishes part of a claim as compensable using an agreement for settlement while disposing of the balance of the claim using a compromise settlement.
A combination settlement divides a claim into two parts. One part is settled through an agreement and confirms it as payable. The other part is resolved through a compromise settlement and resolves the remaining aspects of the claim.
A commutation involves receiving a lump sum payment instead of future benefits. It can be part of a settlement agreement or used after benefits are awarded in a contested case. For approval by the Workers’ Compensation Commissioner, a commutation must:
Show that the employee has a specific need for a lump sum payment.
Ensure that receiving a lump sum is in the employee’s best interest.
Additional filing requirements must be met for approval. When benefits are commuted, the future benefit amount is discounted to its present value.
There are two types of commutation:
Full Commutation (85.45, 85.47): This is a lump sum payment of all remaining future benefits. Approval ends all of the employee’s future rights to additional benefits, including medical benefits.
Partial Commutation (85.45, 85.47, 85.48): This is a lump sum payment of part of the remaining future benefits. Approval establishes the employee’s right to disability benefits but does not end their future rights.
For Full and Partial Commutations filed after June 30, 2017, both the employer and insurance carrier must agree to the commutation.
Visit the Iowa Judicial Branch's website for the current rate (which periodically changes) and other related information. (Use the Iowa Judicial Branch website link to follow to News Releases to check on the "Notice of One-Year Treasury Constant Maturity Index for Calculation of Interest.")
If your case is in litigation, you must give the WCD notice that you have reached a settlement agreement by:
eFiling notice of intent to settle on WCES; and
If the parties agree to settle a case close to the scheduled hearing time, email the presiding deputy. Make sure to include all parties on the email.
A late settlement penalty may result from a failure to provide WCD a timely notice of intent to settle. This includes less than 24 hour notice.
EFiling on WCES
You must file settlement documents online with the Workers' Compensation Electronic System (WCES). All parties must file WCD settlement documents online using WCES.
For more information about eFiling on WCES, visit the eFile on WCES page.
