7 FAQs of Workers’ Compensation

Many employers and employees alike don’t think about workers’ compensation, or they don’t entirely know how it works. If you own or operate a company, it’s your job to understand workers’ comp insurance and ensure that your company abides by state laws and has the best possible policy.

If you’re a new business owner or you’re thinking about changing the workers’ comp policy you have in place, it’s time to get to know the ins and outs of workers’ compensation.

1. What Is Workers’ Compensation?

In general, workers’ compensation, also known as workman’s comp, helps to financially protect businesses and give financial support to their employees in cases of work-related injury or illness. Though workers’ comp regulations vary by state, if you run a business with one or more employees, you must have a workers’ comp policy.

2. Who Does Workers’ Comp Cover?

Who a workers’ comp policy covers depends on the nature of the company that the plan insures. When you purchase workers’ comp insurance for your business, most of your traditional employees will be covered. However, independent contractors and volunteers do not get coverage through your company’s policy.

3. What Does Workmans’ Compensation Cover?

Workmans’ compensation covers most job-related injuries, but it does depend on your state’s laws and regulations regarding workers’ comp.

Employees generally receive workers compensation benefits for injuries that occur while at work. For example, if an employee slips, trips, or falls on company property, they can receive workers’ comp benefits.

Workers’ comp also covers injuries sustained over time. For example, if an employee develops back problems due to long-term overexertion on the job, they will receive coverage for medical costs.

Certain industries have common occupational diseases that result from work conditions such as heart conditions, lung disease, or infectious illness from exposure at work. If you run a business with high associated risks, your policy will likely be more expensive than plans for safer workplaces if you purchase workers’ comp through a private insurer.

Workers’ comp pays the medical expenses necessary for the diagnosis and treatment of the injury. Ongoing care costs are also usually covered. Insurance also offers injured workers disability payments (usually a percentage of their regular salary). Depending on the state and policy, rehabilitation and retraining may also be covered as well.

4. What Does Workmans’ Compensation Not Cover?

Workers compensation generally does not cover injuries that are the result of:

• An employee’s use of illegal drugs or intoxication
• Self-infliction by an employee
• A worker committing a serious crime
• Violation of company policy by the employee
• Non-work related situations

5. How Long Does Workers’ Compensation Last?

Compensation benefits can vary between different insurance providers. Often, the variation depends on the state in which the insurance company (and the policyholder) operates. Some states will limit the length of time benefits can be received with a range of three to seven years.

Furthermore, different forms of disability, as determined by a healthcare provider, result in varied lengths of service for the injured employee. These classifications, which also vary state by state, include:

• Temporary Disability– Granted when an employee can not work due to sickness or injury for a period of time, but their condition is not permanent.
• Temporary Partial Disability– Granted when short-term injury allows an employee the option to return to work, but they are unable to perform certain duties or tasks while healing.
• Permanent Disability– Granted when an employee can no longer work due to a permanent injury.
• Permanent Partial Disability– Granted when a permanent injury or illness impairs an employee’s ability to work, although they are still capable of performing specific tasks.

Independent professionals evaluate the level of impairment of a worker after a workplace injury or illness. At an appointment called an impairment rating evaluation (IRE), the medical practitioner assesses how the injury will affect an employee’s job and the length of their continued benefits. Employees also typically have an IRE after two years or receiving benefits for a permanent illness or injury or when the employee has reached the maximum level of improvement.

6. When Can Employees File a Claim?

If an employee is injured on the job, they should file a report as soon as possible. Some states require injuries to be reported within a specific time frame in order to be covered.

As an employer or supervisor, you should supply your workers with the appropriate paperwork. Injured employees will fill out the form and document date, time, and circumstances of the injury.

In the case of job-related illnesses, employees should report the illness as soon as they learn about the condition and receive a diagnosis. As a business owner, it’s your responsibility to inform employees of their workers’ comp rights.

7. Can My Employees Be Treated By Their Own Doctors?

States have different rules about doctors who can treat employees in workers’ compensation cases. Typically, an injured worker must see a healthcare provider designated by you, the employer. You and the insurance provider must provide a qualified physician within their network to examine an employee.

The treating physician’s report has a significant impact on the benefits received by the employee. Depending on the rules in your state, a change in doctors may be allowed for dissatisfied employees.

Protect Yourself and Your Employees

When it comes to workers’ comp insurance, choosing the right policy will not only save you money, but quality care will give your employees the incentive to keep their jobs. The best bosses take care of their employees and doing your due diligence when shopping workers’ comp insurance can go a long way.