How Does Workers’ Comp Work?

If someone gets hurt at work, they might be eligible for workers’ compensation. Workers’ compensation is a type of insurance. It pays employees wage replacement and medical benefits if they’re hurt. The objective is to provide a short-term solution that helps employees. There are also benefits to employers, such as protecting them from private lawsuits by their employees if they’re hurt. 

The following outlines how workers’ compensation generally works

The Basics

Workers’ compensation insurance, as mentioned, can cover medical bills and then some of a worker’s salary if they’re hurt on the job. It protects employers from liability as well. 

Employers have to make sure their coverage is compliant with the requirements in their state. 

There is a state workers’ compensation office that manages communication. 

The benefits broadly apply to employees who are hurt while they’re performing their job. If someone is hurt at their workplace, but they’re not on the clock, then they aren’t covered. 

There are also exceptions to when an injury occurring on the job is covered. If an injury is caused by the drug or alcohol use of the employee, for example, then it’s not covered. Injuries stemming from misconduct, negligence, or refusal to use a safety device aren’t covered by workers’ comp, nor are self-inflicted injuries that were intentional. 

Workers’ compensation can cover care for occupational diseases as well as illnesses that stem from workplace exposure. 

The Employee Needs to Seek Medical Care After They’re Hurt

If an employee is hurt at work, it can be scary and overwhelming, but it’s important to get health care as soon as is reasonably practical. 

When you get to care for an injury, even if you’re not sure you need it at the moment, it begins to create a trail of documentation. You should keep copies of all your records. 

Reporting the Injury

The actual workers’ compensation process starts when an employee reports they were hurt at work. You should report it as soon as you can if you’re injured. If you don’t report your injuries in a timely way, you could lose out on the opportunity to use workers’ comp benefits. 

As an example, in California, if you wait longer than 30 days to report an injury, you could lose the right to receive benefits. 

Once an employee reports they’ve been injured, the employer should give them a claims form. The claims form asks for details about the injury. 

Then, once the employer has this information, they are required legally to file a claim with their insurance provider within a certain window of time. Depending on the state, the employer might also need to report the injury to the state department for workers’ compensation. 

An Investigation

After a claim is submitted, the insurance company investigates it to decide if it’s going to approve it or deny it. The process can be extensive and may include interviewing the employer and the employee and going over all the relevant documentation. 

If a claim gets denied, the employee will have the opportunity to appeal. To appeal, the employee should file it with the compensation agency in their state, and it will then be reviewed by the agency or a judge. 

Benefits Are Paid 

If your claim is approved, you can start receiving payments for coverage of lost wages and medical bills. 

A health care provider will send your bills directly to the insurance provider if your claim is approved, and they’ll pay them. 

There’s a disability benefit that covers your lost wages and is paid to you directly if you’re the employee. 

There is a rehabilitation benefit that helps you gradually recover from your injuries. 

If someone is killed on their job, there is a death benefit that pays out to the family and covers funeral costs. 

Most states pay around 2/3 of the wages for the employee. There’s a minimum and a maximum. The benefit will last throughout the disability in most cases, but some states limit the total. 

If a worker is partially disabled, workers’ compensation covers part of the difference between the wage they earn as they’re recovering and the wage they would have otherwise earned had they not been injured. 

For employers, after there’s a claim, the cost of insurance might go up. Changing insurers won’t erase previous claims from an employer’s history, but employers can shop around and get quotes to save money. 

From the employer’s perspective, the best thing you can do to keep your workers’ compensation costs low is to keep the workplace safe to prevent injuries from happening in the first place. 


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