Workers’ compensation and disability insurance are similar policies, but workers’ compensation covers both the company and the employee from injuries and illnesses that happen at work. While disability insurance covers an employee for medical problems that happen outside of work. Workers’ compensation insurance and disability both help workers who are sick or hurt and can’t work to earn money. Workers’ compensation insurance is something that most states require companies with employees to have.
It pays for a worker’s medical bills if he or she gets sick or hurt at work. It can also help make up for a worker’s lost income if they can’t work for a while. Disability insurance replaces a person’s lost income if they are hurt or sick outside of work and can’t work because they are handicapped. Most of the time, this coverage is not required. However, some states, like California, have state disability programs that require all qualified workers to have coverage.
Workers’ Compensation Insurance
In most places, employers are required to have insurance for workers’ compensation. But if you don’t have insurance, you could be held responsible for paying for any accidents you get on the job. If you or a worker needs long-term care, these costs can be much higher than the cost of insurance. After getting hurt or sick at work, workers’ compensation can help in three important ways: it pays for medical costs for emergency or ongoing care, pays for lost wages while the person is recovering, and protects the employer from claims. When it’s required by state law, not having coverage can leave you open to serious fines from state regulators and legal action from your workers.
The boss also has other duties, such as telling workers what their legal rights are. This is done by putting up health and safety signs at work. Such as the name of the insurance company and how to report an accident. If a worker gets hurt on the job, the boss generally has to give them a claim form within 24 hours of finding out about it. Find out more about cases for workers’ comp.
Benefits of Workers’ Compensation
Salary Replacement
Most of the time, someone who applies for workers’ compensation will get some of their lost pay back. But it won’t be as much as their full pay. Most policies cover about two-thirds of the gross pay of the recipient. Even though the payout is usually not taxed at the federal or state level. People who get money from Social Security Disability or Supplemental Security Income may have to pay taxes on that money, though.
Workers’ compensation insurance also covers the cost of medical care for a worker who gets sick or hurt on the job. This could mean going to the hospital, having surgery, or taking medicine. If you get sick or hurt at work and it’s so bad that you need more than one treatment. Workers’ compensation will pay for that care. It will also cover accidents that come from doing the same thing over and over again. It’s important to know that most workers’ compensation plans will only pay for medical costs related to injuries that happened at work. For example, a building worker could get paid for injuries they got when they fell from scaffolding, but not for injuries they got on the way to work.
Survivor Benefits
If your employee dies because of something that happened at work, workers’ compensation can help pay for their funeral and give widow benefits to their family.
Disability Insurance
Disability insurance is different from workers’ compensation in many ways. In this case, an employee’s illness or injury that keeps them out of work doesn’t have to happen at work. Depending on the claim, the benefits may be paid for a few days, weeks or even for life. Disability insurance is generally split into two types:
Short-Term Disability Insurance – Benefits for short-term unemployment last from three to six months. Many employers give this coverage as part of a group insurance plan. The premiums can be paid by either the employer or the employees.
Long-Term Disability Insurance – Long-term disability gives disability benefits for more than one year and is for disabilities that last longer or are permanent. Most people buy this from an insurance company on their own. But some employers give it as an option that the employee can pay for through payroll deductions.
Disability insurance is generally not required by law like workers’compensation. Many workers choose to add their own private plans to the disability insurance that their employers already pay. Depending on the person’s situation, these policies can work with government-funded social security disability as well. As an employer, you might offer disability benefits as a way to make your employees happier and keep them on your payroll. This is because with disability insurance, employees know that if something comes up in the future that makes it hard for them to work, they won’t be left on their own with no options.
Benefits of Disability Insurance
Flexibility
Most of the time, employers can choose a plan that works for both them and their workers. For example, an employer might choose a “guaranteed issue” plan. Which lets workers buy coverage no matter what their health is like right now. Disability insurance also comes with payment flexibility. The company, the employee, or a combination of the two can pay the premiums, either before or after taxes.
Lower tax deductible premiums
Most of the time, group prices are less than individual rates. As a business tax deduction, you can use company-paid insurance that was paid before taxes.
How They Help Employer’s and Employees
Workers’ compensation helps workers with more than just medical care and lost wages. It can also protect employers from having to pay for this kind of care out of their own pockets and keep them from getting sued at the same time.
When an employee accepts a workers’ compensation settlement. They give up the right to sue their company for an accident that is covered by the settlement. This keeps the company from having to pay for expensive lawsuits and lets employees get the help they need right away. Since a workers’ compensation claim can be processed much faster than a lawsuit. Even when it’s not required, many employers give disability coverage because it can be a cost-effective way to keep their employees from having to pay a lot of money because of an accident or illness.
Another thing to think about is that the benefits from workers’ compensation may not be enough for some people who make more money. In many places, workers’ compensation insurance can only replace a certain amount of lost income. So some employers and employees buy disability insurance to make sure they are financially safe.
When You Need Workers’ Compensation Insurance
Depending on the workers’ comp rules in your state, you may need workers’ comp coverage as soon as you hire your first employee. But some states set the bar a little higher. Some states require this coverage for independent contractors who work in jobs that are more dangerous, like construction. For example, California requires employers with one or more workers to provide this service to any regular worker in the state. Even if they work alone, roofers must have their own insurance. Businesses with five or more staff in Missouri are required to have workers’ comp. Independent workers, one-person businesses, and owner partnerships don’t have to pay.
Most states don’t require sole proprietors and contractors with no staff to get workers’ compensation insurance. But some states do for more dangerous jobs. No matter what you do for a living, this coverage may be needed to apply for some contracts. Some companies require their contractors to have their own workers’ compensation insurance. Because it lowers the company’s liability if a contractor gets hurt on the job. Many workers buy this insurance because it protects their money. If you are a sole proprietor or an independent contractor, your normal health insurance probably won’t cover you if you get sick or hurt at work. If you can’t work because of an accident, you can also recoup some of your lost pay through workers’ comp.
State-Specific Disability Plans
Employers are required to take part in state disability insurance plans in the following states:
California
Hawaii
New Jersey
New York
Rhode Island
Puerto Rico
How EZ Can Help
If you are in need of disability insurance for your employees or need commercial insurance to safeguard your business, EZ is available to provide assistance. Our agents collaborate with leading insurance firms around the country. To ensure the identification of optimal insurance coverage for both your business and its employees. Indeed, it is possible to get substantial cost savings amounting to hundreds of dollars annually by collaborating with your financial plan to choose the most optimal insurance coverage. If you require any further clarification, please do not hesitate to contact us at 855-694-0047.
Workers’ compensation insurance is designed to protect you and your employees financially in the event of a workplace accident or unjust. Workers’ compensation insurance isn’t just a good idea, depending on your state it may be a legal requirement. When it comes to workers’ comp claims, the majority of them are approved because workers’ compensation is considered “no-fault”. Meaning that employees do not need to prove that their employer was at fault for their injury.
As long as the employee files their claim on time, has witnesses to their accident, and seeks medical treatment for their injury, the employee will receive benefits. There may come a time, however, when one of your employees files a claim that you find questionable. In this case, you do have options, including the option to contest the claim. Below we’ll look at how you can fight a questionable claim. As well as the impact workers’ compensation claims can have on a business.
Reasons To Dispute A Workers’ Comp Claim
You can’t fight a workers’ comp claim for no reason, you and your insurance company must have a legal basis for disputing any claims. Here are some of the reasons you could have for disputing a claim:
Your employee missed the deadline to file a claim
The wrong paperwork was used to file a claim
The injury didn’t happen at your company
Your employee quit before filing a claim
The injury happened while the employee was at work but was not working
The injury was intentional
Always File The Claim
Even if you suspect the workers’ compensation claim is false. You have to file it when the employee comes to you with it. You can be penalized if you fail to report a work-related injury with a full report of all related details as soon as possible. The insurance claim adjuster’s job is to determine whether or not the claim is valid or not. You are paying premiums to your insurance company so that they can handle these matters. If your report is thorough and you work closely with your adjuster, there is a good chance the adjuster will catch the fraudulent claim and deny it anyway. So, delaying or not filing a report because you think it’s invalid could backfire on you, best to just let the adjuster do their job.
Work With The Claims Adjuster
Once you’ve filed the workers’ compensation claim with your insurance company, an adjuster will be assigned to the case. They will contact you and the employee personally, as well as review all documents associated with the case including medical records. The adjuster ultimately decides if the claim will be denied, but at this point you will have more information about the claim than the adjuster. If you have reason to believe the employee lied, or was injured outside of work, now is the time to gather all information that supports why you think it’s invalid. Document, date, and save everything that indicates why you think the claim is fraudulent. Most importantly, inform your adjuster immediately that you believe the claim to be questionable. Indicating in your initial report that you believe there are reasons to deny the claim serves 2 purposes.
First, it lets the adjuster know they may need to file an extension early, since workers’ compensation claims have to be completed in a certain time frame, and disputing a claim will take more time to investigate. Secondly, marking your claim as questionable from the beginning will actually make your adjuster pay closer attention. They will spend more time looking through the paperwork, medical records, and searching for warning signs that otherwise may have been missed. Finding one of these red flags doesn’t necessarily mean anything, as accidents and coincidences do happen. But if an adjuster notices that more than one exists, they will look into it further to make sure if the claim is or isn’t fraudulent.
Warning Signs
A new hire who immediately filed a claim after being hired
An employee who has immediately hired an attorney after the injury
Claims from an employee who may have been “disgruntled”
Employees with poor attendance, poor work records, or financial issues
Injuries with no witnesses, or that happened in an area the employee isn’t assigned to normally work
Injuries that occur late on a Friday or right when they return to work on Monday
Learn Your State’s Procedure
While workers’ comp is mandatory in almost every state, each state has its own laws and procedures for dealing with claims. Including disputing them. You can call your insurance provider and ask about what you need to know about local procedures. So you don’t accidentally make a misstep and cause trouble for yourself or your company.
You have the option to dispute even if the adjuster doesn’t deny the claim after the investigation. In some states, such as Texas, you have to submit a form or attend a hearing to dispute the claim in front of a judge. In other states, such as New York, or Tennessee, you may have to appear before a judicial panel or speak with a state-assigned workers’ compensation arbitrator. However, regardless of the state your company is in, you will most likely have to defend your position orally, in writing, or both. You will also need to provide all of the evidence you gathered when you first filed the claim and informed the adjuster of your concerns. Remember the “document, date, and save all information” part? This is where that step comes in handy.
How Workers’ Comp Claims Affect Businesses
Workers’ compensation claims tend to have a greater impact on smaller businesses. This is because larger companies have deeper pockets and larger payrolls, allowing them to absorb the financial cost with not much issue. Regardless of how big or small your business is though, workers’ comp claims can cause your business issues. Below we’ve detailed how claims can affect you. So, you understand why it’s important to fight fraudulent claims to protect yourself. As well as explain why doing everything you can to avoid workplace accidents is even more important.
Premium Hikes
Your workers’ compensation insurance premiums are determined by your industry, number of employees, payroll, and claims history over the last 3 years. A single claim will not necessarily result in a higher premium. But depending on the nature of the claim and the resulting medical bills and disability benefits even one claim could make a mark on your record. The more often you have workers’ compensation claims the more likely it is that your premiums will increase.
Additionally, your insurer also takes your experience modification rate (EMR) into consideration. Your EMR is how insurance companies compare your claims history to other companies in the same industry. The average EMR is 1.0, the more claims you have the higher above average you are. And then the higher your premiums will be because your company will be considered a higher risk to insure. Regular safety training and following industry-specific safety guidelines can help reduce your premiums.
Administrative Costs
Processing a workers’ compensation claim can take a lot of time. Especially if you’ve signaled that you believe it’s fraudulent. The insurance company will want to examine all relevant evidence, including the employee’s medical records. Effectively giving you or your claims specialist more work to do. Your company may also need to spend a lot of time and money to fix or check any equipment that was involved. As well as repair it if needed. Especially if the machinery involved is found to be defective after the accident. There may also be more paperwork and more hours involved in reporting the incident to state and federal regulators. Particularly if an OSHA violation is suspected. New equipment or training that stems from a regulator’s requirement can take a chunk out of your bottom line.
Legal Action Expenses
If you believe it is false, and you decide to take it to court you could also end up paying. While your attorney will advise you on whether or not you should go to court in the first place. Keep in mind if you lose the case, you will have significantly higher legal fees than you would have if you settled the claim. So, if you are planning on disputing your claim make sure your legal team agrees with the decision. And that you have absolute proof that the claim was fraudulent.
Reputation Damage
Impact on your company’s brand is difficult to predict. Your reputation can be affected by the severity of the accident. Whether it is covered by local news outlets, and whether it spreads on social media. A serious accident, repeated incidents, or OSHA fines could make it difficult to be able to hire new employees or get new customers.
Working With EZ
Workers’ compensation isn’t just about protecting your employees, it’s also about protecting your business. Nobody wants to deny a legitimate claim. But if you encounter one of those rare cases it’s fraudulent, you should know you have rights as well. And remember, EZ.Insure is here to help if you have any questions about workers’ compensation insurance. Or any other commercial insurance for that matter. We will connect you with a highly trained licensed agent. Who will listen to all of your concerns and make sure you get the best policy. To get started, enter your zip code in the box below or call 977-670-3538 to speak with an agent today.
Even if you suspect the workers’ compensation claim is false. You have to file it when the employee comes to you with it. You can be penalized if you fail to report a work-related injury with a full report of all related details as soon as possible. The insurance claim adjuster’s job is to determine whether or not the claim is valid or not. You are paying premiums to your insurance company so that they can handle these matters. If your report is thorough and you work closely with your adjuster, there is a good chance the adjuster will catch the fraudulent claim and deny it anyway. So, delaying or not filing a report because you think it’s invalid could backfire on you, best to just let the adjuster do their job. 
Dispute The Claim