In Pennsylvania, Worker’s Comp gets paid back from a settlement or recovery in a Personal Injury Case or Settlement.
The Pennsylvania Worker’s Compensation Act provides that in exchange for you being covered by Worker’s Compensation Insurance if you are injured in the course of work, if it is the fault of someone else, Comp entitled to a “lien” against any settlement or recovery you get against the at-fault party. This makes sense. If another party is responsible for causing your medical bills and/or lost wages, then that party or their insurer should have to reimburse your the Worker’s Compensation Carrier. NOTE: If you do not pursue a personal injury case, then your Comp benefits do not get paid back. Also, you can not sue your employer for personal injury in Pennsylvania. So, this lien issue only comes up when your injuries are caused by someone other than your employer or another employee of your employer.
Basically, this means that that if you were working and were injured due to someone else’s negligence, Worker’s Compensation’s Insurance Company will be reimbursed for the wage and medical benefits paid to you if you get a personal injury settlement.
An example: You are driving a work truck as a delivery driver for your employer. Someone rear ends your work truck. You have injuries and make a personal injury claim against the at-fault driver. Worker’s Compensation will have a lien against the injury settlement.
Dealing with the lien can get very complicated and is based on the Worker’s Comp Statute which provides formulas for calculating the amount owed by to Worker’s Comp. You should consult with an experienced lawyer before trying to settle the case. Dealing with the lien is tricky. However, you should argue in the personal injury case that the lien amount owed is over and above the damages owed to you for your bodily injuries. That is, if the lien is $10,000 and your injuries are worth $12,000, then the at-fault insurer should owe $22,000. It shouldn’t come out of your share. You may also be able to get the Worker’s Comp Insurer to “compromise” their lien- that is, accept less than what is otherwise owed.