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How Does Workers Compensation Work?

Workers compensation is an entitlement program that provides a series of financial benefits paid to employees who are injured or become ill when performing their jobs. The law requires employers to provide this benefit to their employees through a workers’ compensation insurance policy that is often provided by a private carrier. Employers who do not honor this policy can be sued their employees, as it is a violation of the law. However, the scope of workers compensation may vary from one country to another as they are governed by their own rules and regulations. This article provides in-depth information on how this type of compensation, works its main benefit, and type of payments options available.

The Process of Workers Compensation Claim

Seek Medical Assistance

Employees who experience an occupational illness or workplace injury should report the incident immediately to their employer. However, the report needs to be made before the specified deadline or the employee might not be entitled to the benefits of workers compensation. An employee needs to visit an approved healthcare professional so that the doctor can provide a medical report that will be filed together with the employee’s injury claim.

Complete Applicable Forms and File the Claim

The employer needs to provide the appropriate forms for the claim process and the contact details for the insurance company. Afterward, the employee needs to file the claim with the stated insurance company while paying attention to the reporting deadlines.

Receive the Benefits

Once the insurance provider has approved the claim, the employee will receive the benefits of the workers’ compensation program. The coverage includes all medical expenses of the employee and rehabilitation costs. If an injured worker is disabled for a period of more than seven days, he or she will be eligible to receive temporary total benefits at a rate of 70% their average weekly wage, not to exceed 75% of the Statewide Average Weekly Wage (SAWW) or fall below the minimum rate of 20% of the SAWW. These benefits are provided during the period when a worker is unable to work and is under active medical care.

Return to Work

Depending on the recommendation given by the treating physician, an employee might be required to return to work on a full-time basis or on a reduced schedule. It is the responsibility of the employer to ease the transition of their employees back to the workplace. They can do so by providing adequate safety training that ensures the same type of injury does not occur for the second time.

Eligibility Requirements

Workers compensation claim is only eligible for bona fide employees who work for covered employers. State laws define a covered employer and they give specifications whether certain types of employees are exempted from policy coverage. For instance, there are states that require all employers to take workers compensation insurance without any exceptions. Other states may require a certain number of employees to carry the insurance based on the type of work and its level of risk. Workers who are eligible for this type of compensation will be covered if their disability or injury is work-related, their employer has workers compensation insurance, and the claim is filed within the state deadlines and regulations.

Main Benefit Categories

Workers compensation provides five types of benefits depending on the severity of the injury or illness. These usually include medical treatment and all related expenses incurred while you were in the hospital. Since you will be unable to work during this period, you will be compensated for lost wages. If your injury or illness affects your ability to perform certain jobs, you may be entitled to receive permanent disability payments. Vocational rehabilitation training is always provided to employees who cannot remain in the same job. Another category of workers compensation is death benefits, which cover all burial expenses and provide a lump-sum payment.

Type of Payments

Financial benefits received from workers compensation program can either be structured or lump sum. Structured payments are spread evenly over a specific period or might be given indefinitely while lump-sum payments are given in a single large amount. For instance, lost wage benefits are considered part of structured payments that last up to two years. On the contrary, you might have to sign an agreement for a lump-sum payment that gives up certain rights. The payment may cover any right to seek reimbursement for further medical treatment.

Business owners and their employees can benefit from a safe work environment, as it minimizes the risk of injuries or work-related illnesses. It is important for employers to have compensation insurance for their employees should any of them get ill or injured while performing their job. It is also essential to conduct regular safety training and allow employees to raise any concerns about their safety in the workplace.

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