Stipulated findings and award agreements establish a disability rating and typically result in periodic benefit payments and possible future medical care. Compromise and release (C&R) agreements pay a lump sum and close the carrier's future liability. Choose based on expected future treatment, cash needs, and state-specific rules; consult a workers' compensation attorney before signing.

Understanding the two common ways a workers' compensation case ends helps you choose the right deal for your situation. Two settlement types that appear frequently in U.S. practice are a stipulated findings and award (often called a stipulated award) and a compromise and release (C&R). Exact rules and names vary by state, so check local law or consult an attorney.

What a stipulated findings and award does

A stipulated award records an agreement between the injured worker and the insurer that mirrors what a judge might order after a hearing. The parties agree on a permanent disability rating and on whether the employer or carrier will provide future medical care.

Payments under a stipulated award are typically paid over time as periodic disability benefits, not as a single lump sum. The disability percentage and resulting benefit level come from medical evaluations, and the formula often takes into account the worker's age, occupation, and the treating physician's opinion.

Common issues with stipulated awards

  • The parties often disagree about the disability rating; that rating directly affects the amount paid.
  • Benefits are usually paid in installments, which may not suit workers who want immediate cash.
  • Entitlement and rates can depend on the injury date and your state's benefit schedule.

What a compromise and release does

A compromise and release resolves the claim in a lump sum. The insurer typically pays a single negotiated amount and is released from future medical and indemnity obligations related to that injury.

Workers consider a C&R when they have no further medical needs, can afford future care themselves, or want immediate access to cash. Because the insurer gains certainty and avoids future exposure, the lump-sum amount usually reflects a discount from the net present value of future scheduled benefits.

When a C&R may not be appropriate

If you expect significant future treatment (for example, surgery or long-term therapy), a lump-sum settlement can leave you unprotected. In those cases, preserving the carrier's obligation for future medical care (as in a stipulated award) or arranging a structured settlement/other protections may be safer.

Practical steps before you sign

  • Get a current medical opinion about future treatment needs.
  • Ask an attorney or claims specialist to model the long-term value of periodic benefits versus a lump sum.
  • Confirm state-specific rules and whether a court or administrative judge must approve the settlement.
  • Check the tax treatment for your state and federal rules on workers' compensation settlements .
State laws, procedural requirements, and common names for these agreements differ. Talk to a workers' comp attorney licensed in your state before accepting any settlement.
  1. Confirm current federal and state tax treatment for workers' compensation settlements and when allocations trigger taxable income.
  2. Verify state-by-state terminology and which states commonly use the terms "stipulated findings and award" and "compromise and release" versus alternative labels or procedures.

FAQs about Workers Compensation Settlements

What is the main difference between a stipulated award and a compromise & release?
A stipulated award typically preserves periodic disability payments and may leave future medical care in place. A compromise & release pays a lump sum and usually ends the insurer's obligation for future treatment.
Can I get a lump sum from a stipulated award?
Not usually. Stipulated awards are most often paid over time. If you want a lump sum, you would negotiate a C&R or another form of lump-sum settlement, subject to your state's rules.
When should I avoid a C&R?
Avoid a C&R if you expect significant future medical treatment (e.g., major surgery or ongoing care), because the lump sum ends the carrier's responsibility for future bills.
Do settlement rules and names differ by state?
Yes. Terminology and procedures vary. Some jurisdictions use different labels or require administrative approval. Consult a licensed workers' comp attorney in your state.
Will workers' compensation settlements be taxed?
Workers' compensation benefits for medical care and disability are generally not taxable, but tax treatment can vary with how a settlement is allocated or structured. Confirm with a tax advisor and attorney .