2021 Arizona Revised Statutes
Title 23 - Labor
§ 23-941.01 - Settlement of claims; full and final; exception; definitions

23-941.01. Settlement of claims; full and final; exception; definitions

A. The interested parties to a claim may:

1. Settle and release all or any part of an accepted claim for compensation, benefits, penalties or interest.

2. If the period of temporary disability is terminated by a final notice of claim status, award of the commission or stipulation of the interested parties, negotiate a full and final settlement of an accepted claim.

B. Any full and final settlement shall:

1. Be in writing.

2. Be signed by the carrier, special fund or self-insured employer or an authorized representative of the carrier, special fund or self-insured employer and the employee or the employee's authorized representative.

3. Acknowledge that the employee had the opportunity to seek legal advice and be represented by counsel.

4. Include a description of the employee's medical conditions that have been identified and contemplated at the time of the settlement agreement.

5. Have attached the information provided by the carrier, special fund or self-insured employer pursuant to subsection C, paragraphs 2 and 3 of this section.

C. A full and final settlement shall include the following signed attestations:

1. The employee understands the rights settled and released by the agreement.

2. The employee has been provided information from the carrier, special fund or self-insured employer that outlines any reasonable anticipated future medical, surgical and hospital benefits relating to the claim, the projected cost of those benefits, an explanation of how those projected costs were determined and a disclosure of the amount of the settlement that represents the settlement of future medical, surgical and hospital benefits.

3. The employee has been provided information from the carrier, special fund or self-insured employer that discloses the total amount of future indemnity benefits, the employee's rated age, if applicable, the employee's life expectancy, the source of the employee's life expectancy, the present value of future indemnity benefits, the discount rate used to calculate present value and the amount of the settlement that represents the settlement of future indemnity benefits.

4. The employee understands that monies received for future medical treatment associated with the industrial injury should be set aside to ensure that the costs of the treatment will be paid.

5. The parties have considered and taken reasonable steps to protect any interests of medicare, medicaid, the Indian health service and the United States department of veterans affairs, including establishing a medicare savings account if necessary.

6. The parties have conducted a search for and taken reasonable steps to satisfy any identified medical liens and unpaid medical charges.

7. Coercion, duress, fraud, misrepresentation or undisclosed additional agreements have not been used to achieve the full and final settlement.

D. If an administrative law judge of the commission determines that the requirements of subsection B of this section are satisfied, the attestations of subsection C of this section are present and the employee is represented by counsel, the administrative law judge shall approve the settlement.

E. If the employee is not represented by counsel, the employee shall appear before an administrative law judge of the commission and the administrative law judge shall make specific factual findings regarding whether the requirements of subsections B and C of this section are satisfied. The administrative law judge shall conduct a hearing and perform a detailed inquiry into the attestations provided by the unrepresented employee pursuant to subsection C of this section. The inquiry shall include whether the unrepresented employee understands the specific rights being settled and released, the information, computation and methodology provided by the carrier, special fund or self-insured employer, and the employee's responsibility to protect the interests of other payors and ensure the payment of future treatment costs.

F. The commission may not approve a full and final settlement if the requirements of subsections B and C of this section are not met.

G. A full and final settlement payment shall be made to the employee within fifteen days after the award approving the settlement becomes final.

H. The carrier, special fund or self-insured employer shall notify the attending physician of the approval of a full and final settlement if the full and final settlement terminates the employee's entitlement to medical benefits. Unless medical benefits rendered before the approval date of the full and final settlement are subject to a dispute or payment for the treatment was included in the full and final settlement agreement, the carrier, special fund or self-insured employer remains responsible for payment for the treatment not covered by the full and final settlement agreement as provided by this chapter.

I. Notwithstanding subsection A of this section, a full and final settlement may not be negotiated to settle issues resulting in total and permanent disability pursuant to section 23-1045, subsections C and D.

J. A full and final settlement agreement may not include the settlement of claims unrelated to the claim for compensation, benefits, penalties and interest.

K. This section does not apply to the settlement of claims that have been denied.

L. For the purposes of this section:

1. " Full and final settlement" means a settlement in which the injured employee or, if the injured employee is deceased, the employee's estate, surviving spouse or dependent waives any future entitlement to benefits on the claim and any future right to change the claim pursuant to section 23-1044, subsection F or reopen the claim pursuant to section 23-1061, subsection H.

2. " Special fund" means the special fund established by section 23-1065.