Answered by a Cherry Hill, NJ car accident injury lawyer.
You only have to pay the workers’ compensation carrier back if you recover financial compensation from a subsequent car accident lawsuit. Because you were injured in a car accident which occurred in the course and scope of your employment, i.e., while working, you filed a workers’ compensation claim. Any medical treatment related to your car accident was paid by workers’ compensation. However, treatment must be approved by the workers’ comp carrier.
If you file a lawsuit against the driver who caused the car accident and recover financial compensation, you would need to pay back the money workers’ compensation paid. This is to prevent you from “double dipping.” In other words, the financial compensation you receive from the other driver as a result of the accident includes the medical expenses you incurred from the car accident. Therefore, you cannot have your medical expenses paid by workers’ comp and then turn around and pocket that amount from the lawsuit settlement.
The money you need to pay back is called a statutory right of subrogation, basically the workers’ compensation carrier’s lien or claim on your settlement funds. However NJ law recognizes that in these situations, the employee has done all the work with respect to the lawsuit. Therefore, the workers’ compensation lien is reduced by a third (33.33%). In addition, $750 is also subtracted from the lien. This amount represents the lawsuit expenses that the workers’ compensation carrier is responsible for, and is laid out in the NJ workers’ compensation laws.
For example, if workers’ comp paid $12,000 for your medical expenses, that lien would be reduced by 33.33%. Therefore, the lien would be reduced to $8,000. That amount would then be reduced by $750; the final lien amount you have to pay back would be $7,250.
It is important to keep in mind that if you have “verbal threshold” or “limitation on lawsuit” in your car insurance policy, you may not be able to sue the other driver for pain and suffering unless your injury meets certain statutory exceptions, such as a displaced fracture. For more information about the statutory exceptions, see New Jersey Car Accidents & Verbal Threshold – Can Injured Car Accident Victims Recover Damages?
Of course, if you do not file a lawsuit or otherwise settle a claim with the at fault driver, you do not have to pay back the workers’ compensation lien.
If you would like to discuss your auto accident while you were working, feel free to call me at 800.281.8695. I offer a FREE initial consultation, and we can go over your legal options and the workers’ compensation lien.