Workers' Compensation Claims: How Do They Work?
Workers’ compensation insurance laws state that an employee who experiences a job-related illness or injury can collect compensation benefits. Illnesses and injuries that are caused by exposure to work activities, materials, and equipment are covered by filing a workers’ compensation claim.
Generally, workers’ comp does not cover:
What Is a Workers’ Compensation Claim?
A workers’ compensation claim is a type of insurance claim. While each state has its own worker’s comp laws, the general process is the same. It includes reporting an illness or injury, getting an independent medical exam performed, having an interview with a claims examiner, and receiving compensation from an insurance company.
A worker can file a workers’ comp claim if:
The worker was hurt from performing job-related duties
The worker is a legal or illegal alien or minor
The worker is not a sole proprietor or in a partnership (unless coverage is elected)
The worker is not an independent contractor or subcontractor
The worker is not an employee in the farming, maritime, or railroad industries
The employer has workers’ comp insurance
Do You Get a Settlement from Workers’ Comp?
If an insurance company accepts an employee’s claim, a settlement will be offered. Generally, the employee will be entitled to some or all of these types of benefits:
Covered costs of medical treatment that is required to cure or alleviate the effects of the illness or injury.
Disability payments if the employee is restricted from working due to the illness or injury. These payments may be temporary or permanent, depending on the case.
Paid training for a new vocation if the employee can’t return to the usual job and the employer has no alternative or modified work.
Compensation for permanent injuries.
Note: Receiving these benefits means the employee cannot file a lawsuit against the employer because of the illness or injury.
Who Pays for a Workers’ Compensation Claim?
Workers’ compensation claims are paid by a private insurance company or state workers’ comp fund. Employers pay premiums for this insurance. Employee salaries are not deducted to pay for it.
How Long Do Workers’ Compensation Claims Take?
How long it takes to receive a workers’ compensation claim depends on the type of illness or injury sustained. A simple, undisputed claim can be resolved more quickly than complicated or disputed cases. Either way, it can take 10-90 days for the insurance company to accept or reject a claim. If a claim goes through mediation or is on appeal, it may take from 130 days up to a year.
The Workers’ Compensation Claim Filing Process
As soon as an employee suffers a covered illness or injury in the workplace, a claim must be filed within 30-45 days (depending on the state) in order to collect benefits. Cumulative injuries such as carpal tunnel syndrome should be reported at the time the employee knows the injury was caused by work and at the time of taking off work because of the injury.
Here are the five steps of the workers’ compensation claim filing process:
Notify the employer of the injury or illness.
This can be done with an email or a formal letter.
Include the date, time, type of illness or injury, and how it happened.
Your employer must provide you with an official claim form, usually within 24 hours of being notified.
An insurance company will choose a doctor to perform an independent medical exam. The results will be reported back to the insurance company.
A claims examiner will interview you, your employer, and any witnesses.
The insurance company will offer compensation (also called a “settlement”). The employee can accept or negotiate the offered settlement, but there are important pros and cons that should be considered first.
Note: An employer may not fire or retaliate in any way against an employee for filing a claim. If the employer or insurance company denies a claim, the employee can file an application for a formal hearing before the state’s Labor Commission.
What Employers Can Do to Mitigate Workplace Risks
The last thing an employer wants is to run a risky operation. The consequences are heavy with high costs, production delays, and reputational losses.
If you have concerns regarding the risks in your workplace, do the following: