Workers who are injured on the job can receive benefits through Workers’ Compensation coverage. These benefits can include medical care, part of lost wages and permanent disability. In addition, death benefits are provided to dependents of employees killed in work-related accidents. Workers’ Compensation rules and regulations are different in every state, because individual statutes and court decisions have shaped each state’s system. This results in differences in how each state provides benefits, handles claims, evaluates impairments, settles disputes and controls costs. To learn more about how your state handles Workers’ Compensation, contact a Dwight Andrus Insurance consultant today.
THE EMPLOYER’S RESPONSIBILITIES
Employers are responsible for doing the following to comply with Workers’ Compensation insurance laws:
- Must provide coverage for their employees and are held liable for all injuries suffered by employees while on the job (with the exception of employers residing in the state of Texas)
- Pay premiums and provide the insurance carrier with audit payroll numbers
- Provide a safe environment in all workplaces
- Notify the insurance carrier as soon as possible after an injury occurs
- Investigate all injuries to their employees
WORKERS’ COMPENSATION BENEFITS
As an employer, it’s important for you to understand the different types of benefits that your employees may receive through Workers’ Compensation coverage. This will allow you to monitor Workers’ Compensation claims, which can save you money – while also providing a better claim experience for your employees.
Medical benefits are the benefits that are paid out by a company’s workers’ compensation insurance policy for an employee’s medical treatment. This coverage pays for the medical treatment necessary to treat the employee’s work-related injury. Any medical treatment that the employee receives will be covered, so long as it is considered medically necessary or reasonable to treat the work-related injury. Alternative medicine treatments are normally not covered by workers’ compensation coverage. There are specific statutory requirements and limitations for types of medical treatments covered by workers’ compensation insurance, but these requirements vary by state.
These are the benefits which are paid out by the company under its Workers’ Compensation insurance policy for an employee’s medical treatment. This pays for the medical treatment needed to heal the employee’s work-related injury. Any medical treatment that the employee receives may be covered – but only if it is considered medically necessary or reasonable to treat the work-related injury. Workers’ Compensation usually does not cover alternative medicine treatments. In fact, there are specific statutory requirements and limitations for the types of medical treatments covered by Workers’ Compensation insurance – and these requirements can vary a great deal from state to state.
There are a number of different disability benefits (also known as “wage replacement benefits”) that are available for employees through Workers’ Compensation coverage. These benefits are designed to replace the employee’s wages should they be out of work due to a work-related injury. In addition, the benefits can serve as a supplement to the employee’s wages if they are unable to return to work in full capacity due to a work-related injury. Disability benefits include:
- Temporary Total Disability (TTD) — These benefits are for instances where an employee must take off of work completely until they have healed and are able to return to work per a physician’s medical release. The percentage paid can vary by state, so it’s important to check the state in which the Workers’ Compensation claim is filed. Once the employee is able to return to work, TTD benefits are discontinued.
- Temporary Partial Disability (TPD) — These benefits apply when an employee is able to return to their job in a limited capacity, per a physician’s order. This may mean that the employee will work fewer hours or in a different type of role than their normal job. Once the employee is able to return to work at full capacity, TPD benefits are discontinued.
- Permanent Partial Disability (PPD) – These benefits apply when an employee has a permanent disability, but is still able to continue working in a limited capacity. The percentage rating of an employee’s disability is determined when they reach maximum medical improvement (MMI) — meaning the employee will not improve any further from their injury. The employee will not be able to work in the role they performed prior to being injured and will have to change job roles to accommodate their disability. PPD may also require shorter workdays or other work restrictions.
- Permanent Total Disability (PTD) — These benefits are utilized when an employee reaches MMI and is unable to return to work in any capacity because they became permanently disabled by their work-related injury. This decision must be made by a physician. The employee will be given a disability rating and must qualify for PTD, which varies from state to state. These benefits will continue until there is a settlement reached or the employee is able to collect Medicare. Each state has its own laws concerning Workers’ Compensation benefits, so employers should seek legal counsel if they have specific questions or need more information.
Vocational Rehabilitation Benefits
Vocational rehabilitation benefits can help employees reenter the job market if they have been injured and are not able to return to their previous job due to their injury. These benefits provide services including:
- Career Planning
- Skills Training
- Job Placement
These benefits are designed to help employees return to work when they would otherwise be unable to work anymore. The services provided by these benefits vary from state to state.
Death and Dependency Benefits
Death and dependency benefits are paid out when an employee is killed from a work-related accident or injury – or contracts an occupational disease that results in death. Depending on the state in which the employee worked, a surviving spouse or relative may be eligible to receive compensation to help replace the decedent’s wages. The amount of compensation received and how long the benefits last will depend on the state in which the benefits are being paid. Dependent children may also be eligible to receive additional benefits, depending upon the state.
Workers’ Compensation insurance may also provide death benefits to pay for funeral expenses. If an employee dies in a work-related accident or due to an occupational disease, either a portion or all of their funeral expenses will be covered. The amount paid varies from state to state.
MANAGING YOUR WORKERS’ COMPENSATION COSTS
Workers’ Compensation insurance premiums are based on a rating given to your company – which in turn is based on payroll, averages for your industry and the number of claims filed over a three-year period. There are multiple ways that your company can lower its Workers’ Compensation costs, including the following:
- Review your insurance policy to make sure all job classifications and payrolls are correct.
- Invest in workplace safety to avoid accidents. Modifying or improving operating procedures even slightly can reduce unnecessary exposure to injuries.
- Consider switching to a managed care organization that has a relationship with your insurance company. This can help you to save money on the cost of medical treatment.
- Create a modified duty program at your business to help injured employees return to work more quickly. These programs assign employees duties that they can physically complete during their recovery. The most successful return-to-work programs incorporate fast, high quality medical care and assistance in reducing emotional stress after an accident.
GET SUPPORT FOR YOUR WORKERS’ COMPENSATION INSURANCE
Overall, understanding the entire workers’ compensation claim process—specifically, which benefits your employees can receive—can allow an employer to leverage their workers’ compensation policy effectively and minimize claim-related expenses.
At Dwight Andrus, we have the resources and expertise to help you navigate the workers’ compensation insurance process. Experience the benefits of having a dedicated insurance team behind your business that’s committed to developing and delivering customized solutions. Contact us today to discuss all of your workers’ compensation needs.