Short Answer: Whether you can get an advance on your workers’ compensation will vary depending on the specifics of your situation and the state where you live. If an advance is available, you may be able to request a partial advance or a lump-sum payment, and you will either need to work directly with your insurer or petition your state’s labor board. For more information on how to request a workers’ comp advance, see below.
Can I Get an Advance on My Workers’ Comp?
You may be able to get an advance on your workers’ compensation benefits, but it will depend on your specific situation and your state of residence. The process of requesting an advance on workers’ compensation benefits varies state. Your options will also vary based on the type of claim (temporary total, temporary partial, permanent partial, or permanent total disability).
We reviewed state legal codes, read through attorney filings, and called several state labor boards to find examples of how to do this. Below are the options we found, along with some potential complications to be aware of:
- Request an advance directly from your insurance carrier. Insurers are not obligated to offer advances, and they may need state approval to give an advance. When petitioning the insurance company, you will need to provide a reason for the request and demonstrate financial need.
- Note: Any advance will decrease the balance of the monies owed to you. If the insurer denies your request, you can hire an attorney to advocate for you.
- Request an advance through your state’s official petition process. Some state labor boards have petition processes for requesting an advance or partial lump-sum payment. These states include Colorado, Connecticut, Georgia, Hawaii, Michigan, Mississippi, Oregon, Texas, and Utah. To begin the process (where available) or find out more about your eligibility, contact your state labor board.
- Note: Some states may discount your advance, meaning that you might be depleting your balance more than you think. In some cases, receiving an advance may keep you from receiving certain benefits in the future.
- Request a full lump-sum payment of your benefits. Lump sums are typically only available in permanent partial disability or permanent total disability cases and comes with several limitations. You will still need to negotiate with your insurer, and receiving a lump-sum payment usually means you’ll have to appear before a judge, director, commissioner, or workers’ compensation board. Such government bodies won’t approve a lump sum unless they believe it’s in your best interest.
- Note: Many lump-sum settlements are also discounted, meaning you’ll get less money than what is owed from your original claim. In almost every case, receiving a lump-sum payment closes out your case and keeps you from receiving any future benefits.
Beware: Workers’ Compensation Funding Loans
While trying to get an advance on your workers’ compensation, you may encounter companies advertising workers’ compensation funding options. This type of funding is not an advance on your workers’ comp; it’s a loan, and it typically comes with high interest rates and/or other fees.
Amaxx Risk Solutions, a clearinghouse for workers’ compensation information aimed at employers, calls such loans “high-risk lending.” Amaxx attorney Rebecca Shafer writes, “With some funding companies, they loan 10 or 15% of the projected settlement and charge interest at a high rate until they are repaid. Others provide the loan in exchange for a set percentage of the future settlement.” Such loans, which are typically called cash advances or pre-funding settlements, are very expensive.
Tips for Quick Claim Administration
If you decide that you don’t want an advance on your settlement, or if you expect that you will not be eligible to receive one, there are still steps you can take to make the claim approval process work as quickly as possible. You should report your injury or illness to your employer immediately, fill out all documentation accurately, provide all necessary medical records, and follow up with your insurer and/or workers’ compensation office regularly for the duration of your claim. If the claim is administered correctly, payments should begin within two to three weeks.