Missouri workers' compensation settlements are calculated using a formula that combines wage‑loss benefits, medical expenses, and a Permanent Partial Disability (PPD) award based on the state's schedule of awards; the PPD component often distinguishes Missouri from other states because it applies a percentage of the employee's average weekly wage to a predefined number of weeks for the specific injury.
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Key Components of the Settlement Formula
The total settlement amount is the sum of three primary elements:
- Temporary Total Disability (TTD) – wages lost during the period the employee cannot work.
- Medical Benefits – reimbursement for all reasonable and necessary medical treatment related to the injury.
- Permanent Partial Disability (PPD) – a lump‑sum payment calculated from the Missouri PPD schedule.
How Permanent Partial Disability Is Calculated
Missouri assigns each type of injury a specific number of weeks, known as the "schedule," which reflects the expected loss of earning capacity. The formula is:
| Component | Calculation | Notes |
|---|---|---|
| Average Weekly Wage (AWW) | Sum of the employee's earnings over the 52 weeks before injury ÷ 52 | Includes overtime, bonuses, and commissions if regular. |
| PPD Percentage | Medical evaluator's rating (0‑100%) of permanent impairment | Based on accepted medical guidelines. |
| Schedule Weeks | State‑provided weeks for the specific injury | Varies; e.g., loss of a thumb = 90 weeks, loss of a finger = 45 weeks. |
| PPD Award | (AWW × Schedule Weeks × PPD Percentage) ÷ 100 | Result is a lump‑sum payment. |
Temporary Total Disability (TTD) Benefits
While the employee is unable to work, Missouri pays 66⅔% of the AWW, capped at the state maximum. TTD continues until the employee returns to work, reaches maximum medical improvement, or the benefit period ends.
Medical Benefits
All medically necessary treatments, prescriptions, and equipment are covered without a deductible. The employer's insurance carrier pays these costs directly; they are not part of the lump‑sum settlement but affect the overall compensation package.
Negotiating a Settlement
When parties agree to settle, they typically convert the future TTD and PPD benefits into a single lump‑sum figure. The conversion factor often ranges from 1.0 to 1.5 times the calculated PPD award, reflecting the present value of future payments and the risk of litigation. Both sides must consider the employee's age, earning potential, and the likelihood of returning to work.
Factors That Can Alter the Formula
Several variables may increase or decrease the final amount:
- Pre‑existing conditions that affect the PPD rating.
- Employer's choice of a "capped" settlement, limiting the PPD weeks.
- Use of a "discount rate" to adjust future benefits to present value.
- Legal fees and attorney's contingency percentages, which are deducted from the gross settlement.