Most people understand the basics of workers’ compensation. When an employee gets hurt on the job, they receive money for missed work and medical bills. However, there are a few things people need to know about how it works.
What is workers’ compensation?
Workers’ compensation is a legal mandate. It helps protect workers and businesses from financial losses when an employee gets hurt or has a job-related illness. While worker’s compensation benefits employees, it also protects employers from potential damages of a workers’ comp claim.
What to know about workers’ compensation laws
Every state has laws that require companies of a certain size to provide workers’ compensation benefits. If you are subject to these laws, you should know what benefits are payable. Here’s what most states require:
- Workers are entitled to the benefits of an accidental job-related injury or illness.
- Employees lose their right to sue to receive a settlement.
- Employees have the right to sue negligent third parties.
- Laws define the type of employees covered. This usually does not involve independent contractors.
If a work accident were to occur, you must take two important actions to adhere to state laws. First, you are required to file an accident report. Second, you should treat every injury as legitimate to avoid a lawsuit.
Each state has its own requirements determining the period you have to file a report.
What to consider about workers’ compensation
If state workers’ compensation laws apply to you, you should consider a few things.
Who needs workers’ compensation?
Workers’ compensation is required if you have at least one employee, so you must purchase coverage before hiring. Some states, like Texas and South Dakota, make workers’ compensation optional for employers. However, voluntary participation in a state’s program can benefit your workers and business, so you should strongly consider purchasing a policy as soon as you hire an employee.
Should an employee suffer a work-related illness or injury, you could be subject to paying a heap of legal and medical bills.
Benefits employees receive from workers’ compensation
Worker’s compensation provides coverage and financial benefits that fall within four categories:
- Medical benefits. These may cover doctor’s visits, hospital care, medications, physical therapy, medical equipment and chronic pain management. The benefits aren’t subject to deductibles and copays. Moreover, some states limit coverage of medical bills based on treatment type.
- Disability benefits. These are temporary or permanent depending on the employee’s level of impairment. However, disability covers the loss of wages during recovery and medical treatment. These benefits can replace a partial loss of income for life or until the employee is ready to return.
- Rehabilitation benefits. They provide support for injured workers who remain permanently disabled. Benefits typically cover costs associated with job training, skills assessment, résumé assistance, job placement, tuition and other expenses. These benefits cover the costs of retraining an employee to acquire new skills needed to resume work.
- Death benefits. These are also known as survivor’s benefits and provide support for dependents if an employee dies from a work-related injury. These may cover loss of income, burial and funeral expenses.
How the process of filing a claim works
Once an employee sustains a work injury or becomes ill, you must file a formal claim and process it. Typically, a human resources team will ensure the worker’s medical needs are met. They will also provide an overview detailing the claims process.
Workers will need to know how and where to receive medical care and wage supplementation. Furthermore, an employer should file a claim within 24 to 48 hours after an injury or illness occurs.
The employer should maintain contact between all parties until the claim is approved or denied. Once the insurer notifies the denial of a claim, the employee has the right to demand further assessment. They can receive ongoing medical care and return to work upon clearance if the claim is approved.
Make the workers’ compensation process work for you
Workers’ compensation can help you avoid business losses. If a work-related injury or illness occurs, you should speak to a lawyer about benefits and expectations. Furthermore, you should advise your employee to do the same. Regular communication should help the claims process proceed smoothly.
Ginger Abbot has written for The National Alliance for Mental Illness, HerCampus, Motherly, and more. When she’s not freelancing, she works as chief editor for the learning publication Classrooms, where you can read more of her work.