How Does Workers' Comp Work?

By Lauryn Page | 04/07/2017

Many employers don’t think about workers’ compensation until an injury occurs—and when it does, they’re usually not sure how it works. Every state has different regulations, and employers should know what’s covered before an injury happens.* Here’s what you—and your employees—should know about workers’ compensation. 

Okay, first: what is workers’ compensation insurance?

It’s a state-regulated insurance system that pays medical bills and some lost wages to employees who are injured on the job or who have work-related diseases or illnesses. Employees get benefits based on the type and severity of their injuries and/or illness. Federal employees are subject to different workers’ compensation guidelines.

What does workers’ compensation cover?

Job-related injuries and illnesses! These can include injuries they got by traveling, work errands, and attending business functions. Injuries and illnesses can be sudden or brought on by a repetitive action, such as carpal tunnel syndrome or repeated exposure to chemicals, air pollution, or radiation.

What doesn’t workers’ compensation cover?

Injured employees can be denied compensation for many reasons, including:

  • Injuries caused by intoxication or drugs
  • Self-inflicted injuries
  • Injuries from a fight started by the employee
  • Injuries resulting from horseplay or violation of company policy
  • Felony-related injuries
  • Injuries an employee suffers off the job
  • Injuries claimed after an employee is terminated
  • Injuries to an independent contractor

What benefits are available?

Although the amount varies by state, claimants can receive replacement wages and compensation for medical expenses. Claimants may also receive temporary disability payments, which in many states is equal to two-thirds of their average wages, up to a fixed amount. A permanently disabled claimant may qualify for a lump sum or benefits throughout the duration of their disability. The claimant must be unable to perform their previous work duties or be unable to work at all to receive these benefits. In case of death, the surviving dependents receive the deceased worker’s benefits. On-the-job training, education, or job placement assistance is also available in some states.

What are the employer’s responsibilities?

Each state has specific regulations as to what employers are responsible for regarding workers’ compensation. Employers are required by law to carry workers’ compensation insurance or risk fines or litigation by injured employees. California also has the Uninsured Employers Benefits Trust Fund for those employers who choose not to pay for workers’ compensation insurance.

Employers should also post notices advising employees of their legal rights. These must be posted in a convenient location frequented by employees during working hours. These notices typically tell employees if their employer is self-insured, display contact information regarding the company’s workers’ compensation carrier, and give details about available benefits. Posted notices should state that injured employees have the right to medical treatment and whether they can choose and/or change their treating physician, which differs by state.

How to file a workers’ compensation claim

When filing a workers’ compensation claim, employees should go over their state’s regulations with their employer. Regulations vary for each state, but the necessary steps are generally similar. Depending on the severity of the injury, employees may need to seek medical attention immediately. If the injury is not severe, most states set a time limit that can range from a few days to two years. Employers must typically provide a workers’ compensation claim form within 24 hours of receiving notice of the injury.

What is workers’ compensation fraud?

It’s when a claimant, employer, or health care provider knowingly fabricates an injury or claim for an injury to gain an advantage, savings, money, or other benefit. False workers’ compensation claims account for 25% of all insurance claims. Some sources indicate that 10% of all workers’ compensation claims are fraudulent and cost 5 billion dollars annually. These costs are passed on to consumers in the form of higher premiums. Insurance fraud is a crime punishable by fines and/or jail time if convicted.

 

Talk to a Concentra occupational medicine expert today to discuss how we can help you find the right workers’ compensation injury care solutions for your business.

 

*This document is an overview and does not constitute legal or medical advice.  Always seek legal advice specific to your state and situation.

 


 

[1] Workers' Compensation Basics for Employers | Nolo.com. (n.d.). Retrieved from http://www.nolo.com/legal-encyclopedia/workers-compensation-basics-employers-303

[2] Workers Compensation Investigations - PInow.com. (n.d.). Retrieved from http://www.pinow.com/investigations/workers-compensation