Under Iowa law, no agreement between an injured worker and an employer or insurance company is final and binding unless the agency, the Iowa Division of Workers’ Compensation, has approved it. However, a verbal agreement between the parties is considered binding upon the parties, and either side can go to the agency to enforce the terms of that approval. Do not agree to any settlement terms, thinking you can change your mind until it is in writing; the courts have always said that a verbal agreement to settle a work injury case is an enforceable legal contract. So if the agency approves, it is binding. Either party can take the other parties to Court to enforce the terms of an oral agreement to settle a workers’ compensation claim.


There are two kinds of settlements in Iowa, an open-file agreement, under the terms of Section 86.13 of the Iowa Code and a closed-file agreement, under the terms of Section 85.35 of the Iowa Code. There are good reasons for the employer and insurance carrier or administrator to prefer a closed-file agreement, and there may be good reasons for the injured worker to prefer either an open-file or a closed-file settlement. This topic is complex enough that it should not be considered without talking to an attorney. If the employer, insurance carrier or insurance administrator draws up a settlement document for the consideration of an injured worker, or has an attorney draw up an agreement, the worker should not rely on the representations of the party preparing the agreement. Instead, the worker should consult with an attorney with a good deal of experience in Iowa workers’ compensation law about the legal impact of the agreement.


Mediation


The decision to settle a work injury claim is always within the power of the injured worker. No lawyer for an injured worker can agree to a settlement without the permission of the worker. If the worker does not agree with the lawyer’s suggestion to offer certain settlement terms, the worker should make that clear. On the other hand, the injured worker who has hired an attorney to represent the worker should give serious consideration to the opinions and recommendations of his or her lawyer. Where the injured worker and the insurance carrier or administrator cannot agree on a case, it is possible to arrange for a settlement conference, or mediation. While mediations can be arranged through the state agency, the Iowa Division of Workers’ Compensation, they can also be arranged through a private mediator, a lawyer with a good deal of experience in workers’ compensation cases. At a mediation, the parties meet, usually for 2 to 3 hours, to see if they can agree to resolve their differences, usually by settling for a cash figure in return for a closed-file settlement under Section 85.35 of the Iowa Code.


Injured workers going into a settlement conference need to make sure what bills have been paid and have not been paid, so that can be discussed during the mediation. If the parties verbally agree to the terms of a settlement, they will be bound by that agreement, just as much as if they had signed an agreement containing those terms. While the settlement is still subject to approval by the Workers’ Compensation Commissioner, the parties have agreed to live by the terms of the settlement upon the Commissioner’s approval. Read on for more information

Beware of Free Advice


The worker may get advice from well-meaning people giving their opinion as to what a work injury is worth. Often, the person offering the advice is relying on information about a claim by someone in a personal injury accident, someone who had a work injury in another State, or someone with a completely different injury, earning history, education, age and physical

restrictions. That person may reach his objectives by impressing you, but it does not help you at all, and will probably be harmful to you. Some people will even tell you to lie at hearing, cover up facts or to not tell your lawyer everything. They are not only not helping, they will get you in serious trouble if you listen to them. If you intend to listen to someone and take their advice rather than your lawyer’s advice, let your lawyer know right away. He or she may decide to withdraw from the case, rather than be a party to your getting yourself into trouble while they are representing you. In many cases, your lawyer is ethically obligated to withdraw at that point.


The Impact of a Workers’ Compensation Settlement on Future Social Security Disability Benefits

Social Security Disability can be reduced by the receipt of workers’ compensation benefits. The issue is complicated, and the legal impact of any such settlement should only be made upon consultation with an attorney experienced in Iowa workers’ compensation law and the possible impact of a worker’s compensation settlement.


It is also possible that a worker who settles a workers’ compensation settlement and is receiving Social Security Disability benefits or will soon be receiving Disability, can lose Medicare coverage, or be asked to pay Medicare back for services that they have already paid for. An attorney who does not have extensive experience in both workers’ compensation and Social Security Disability may not be familiar with the severe impact that a workers’ compensation settlement can have on Social Security Disability benefits and on Medicare coverage.


Section 85.35 of the Iowa Code provides: “85.35 Settlement in contested case.

The parties to a contested case, or persons who are involved in a dispute which could culminate in a contested case may enter into a settlement of any claim arising under this chapter or chapter 85A, 85B or 86, providing for final disposition of the claim, provided that no final disposition affecting rights to future benefits may be had when the only dispute is the degree of disability resulting from an injury for which an award for payments or agreement for settlement under section 86.13 has been made. The settlement shall be in writing and submitted to the workers’ compensation commissioner for approval. The settlement shall not be approved unless evidence of a bona fide dispute exists concerning any of the following:


1. The claimed injury arose out of or in the course of the employment.

2. The injured employee gave notice under section 85.23.


3. Whether or not the statutes of limitations as provided in section 85.26 have run. When the issue involved is whether or not the statute of limitations of section 85.26, subsection 2, has run, the final disposition shall pertain to the right to weekly compensation unless otherwise provided for in subsection 7 of this section.


4. The injury was caused by the employee’s willful intent to injure the employee’s self or to willfully injure another.


5. Intoxication, which did not arise out of and in the course of employment but which was due to the effects of alcohol or another narcotic, depressant, stimulant, hallucinogenic, or hypnotic drug not prescribed by an authorized medical practitioner, was a substantial factor in causing the employee’s injury.


6. The injury was caused by the willful act of a third party directed against the employee for reasons personal to such employee.


7. This chapter or chapter 85A, 85B, 86 or 87 applies to the party making the claim.


8. A substantial portion of the claimed disability is related to physical or mental conditions other than those caused by the injury.


Approval by the workers’ compensation commissioner shall be binding on the parties and shall not be construed as an original proceeding. Notwithstanding any provisions of this chapter and chapters 85A, 85B, 86 and 87, an approved settlement shall constitute a final bar to any further rights arising under this chapter and chapters 85A, 85B, 86 and 87. Such payment shall not be construed as the payment of weekly compensation.”

Section 86.13 of the Iowa Code provides in part: “This section does not prevent the parties from reaching an agreement for settlement regarding compensation. However, the agreement is valid only if signed by all parties and approved by the workers’ compensation commissioner.”

Settling Work Injury Claims

We Care

"To show the love of Jesus Christ through excellent and caring services, at the professional and staff level, for injured and disabled workers."

MISSION

Workers' Compensation and Social Security Disability

Call Today: 641-682-8119

Toll Free:  (800)747-8119


  • Commitment and dedication
  • Sensitivity towards our clients
  • Experienced attorney and staff
  • Flexibility to work around your needs
  • Open communication
  • Accurate assessment of your claim
  • ​​Attention to detail