Every business that has employees should have workers’ comp insurance. In fact, this type of coverage is required in most states. But even if it weren’t required to have it. You would still have a responsibility to protect your business and its employees from the legal and financial risks associated with workplace injuries.
These policies typically cover most workplace injuries and illnesses caused by workplace conditions. But workers’ compensation cases aren’t always black and white. They definitely cover things like repetitive stress injuries, traumatic brain injuries, broken limbs sustained after a fall, etc. But what are the limits? What or who is does workers’ compensation not cover?
Workers’ compensation insurance is among the simpler types of commercial insurance policies to understand. Simply put, if one of your employees sustains an injury on the job, the policy will be cover them. Employees benefit from compensation for medical expenses and lost wages, and businesses save money by avoiding lawsuits.
But in reality, though, things are not always so straightforward. Some workplace injuries may raise doubts in the minds of employers. What if, for instance, a worker sustains an injury on the job, but the incident was entirely their own doing?
In this case, you should know that workers’ compensation is no-fault. Which means that employees who are injured due to their own carelessness are still entitled to benefits. However, this still has its limits. For example, an employee’s claim will be denied if the incident that led to the injury occurred while the worker was under the influence of alcohol or drugs.
In addition, workers’ comp generally covers repetitive stress injuries like carpal tunnel syndrome and asbestosis. But when it comes to repetitive stress injuries like chronic back pain or diseases like heart disease or high blood pressure, things become a little murkier. An employee claiming that one of these conditions is from work must provide overwhelming evidence.
So, let’s clear things up a little and look a little more closely at what isn’t covered by workers’ compensation.
Examples of Injuries Workers’ Compensation Won’t Cover
Workers’ compensation insurance covers most injuries on the job or when an employee is off-site but still working. Injuries employee injuries in the workplace must be evaluated on a case-by-case basis. There are exceptions to coverage, including:
Driving to or from work – If an employee is hurt while commuting to or from work, the injury is not considered to have occurred in the course of their employment. As a result, the employee is not eligible for compensation unless they were driving specifically for their job.
Injury while intoxicated – If an employee sustains an injury while under the influence of an illegal substance or while intoxicated, and if the employee’s intoxication is the only cause of the injury, the injury will typically not be covered by workers’ comp.
Horseplay – Playing around at work, in general, does not contribute to the success of the company, which is why an injury that results from such an activity is not covered by insurance. But there is an exception to that rule. If an employee gets an injury during the incident but wasn’t directly part of the horseplay, the rule will not apply to the employee.
Intentional actions – In the event that a worker intentionally brings about their own injuries or illnesses while on the job, workers’ compensation will not cover them.
Illegal activities – Workers’ compensation won’t cover injuries of workers as a result of illegal activities on the jobsite.
Policy violations – Employees who sustain injuries while acting in a manner that is contrary to the company’s policies, procedures, or protocols are not covered by workers’ compensation.
Ex-employees – Unless the injury occurred before the employee was terminated from their position. Former employees who have been fired or laid off from their jobs will no longer be covered by workers’ compensation insurance.
Are All Employees Covered?
Workers’ compensation coverage requirements vary by state, as well as by the number of employees and their classification codes. For example, manual laborers are classified differently than office workers for workers’ comp purposes. Some states, for instance, mandate workers’ comp insurance only for businesses with a specific number of employees. In general, though, all full-time employees must be covered by workers’ compensation insurance, but the specific regulations may vary from state to state. Workers’ compensation laws for freelancers, temp workers, and interns are not standardized across the country.
In some states, workers’ compensation insurance is optional for:
Farmhands
Insurance agents
Family members under a certain age
Casual workers
Business owners and partners
Real estate agents
Most state laws also list specific types of employment excluded from workers’ compensation coverage. Typical examples of excluded workers include:
Part-time domestic workers, such as maids and nannies
Part-time gardeners or maintenance workers employed in the home to perform specific work.
intermittent workers performing very little work in the course of a year.
Taxi drivers
Some agricultural workers
Workers’ compensation insurance is typically required by states, but the federal government does not provide its employees with this protection. Instead, they are protected by federal workers’ comp.
These exemptions are not universal, and you should be aware of the workers’ compensation laws in your state. Check out our state-by-state workers’ comp guides for more specific information on laws in your state.
Is There a Workers’ Compensation Claim Deadline?
The majority of the time, the rules governing workers’ compensation work in the employee’s favor. On the other hand, though, employees cannot decide to make a claim for an injury that occurred years ago.
Although there may be some exceptions to these rules. In general, a claim for workers’ compensation benefits has to be made within a certain amount of time in order to be considered. Employees usually have between one and three years from the date of the accident to notify their employer and file a complaint with the state from the time the accident occurred. This time period varies from state to state. Check out our guides to workers’ compensation in each state to get an accurate estimate of the amount of time your employees have to file claims, as well as how long the claims process generally takes.
Does Where an Employee Gets Injured Matter?
The vast majority of injuries that occur while working are covered by insurance, with a few exceptions. But is it necessary for an employee to actually be present at their place of business? In the vast majority of cases, it doesn’t make a difference where the employee is located, as long as they are working; in fact, they could even be traveling between different locations.
Take, for instance, a scenario in which your employee sustains an injury while traveling to or from work. Because they were not carrying out any work-related responsibilities, they would not be eligible for workers’ compensation benefits. Suppose on the other hand, that a contractor must travel from one location to another in order to check on worksites or deliver supplies. Because the contractor was carrying out their duties at the time of the injury, they would be eligible for coverage in the event that they were in a car accident.
Workers’ Comp Laws for Federal Employees, Railroad Employees, and Longshoremen
Workers’ compensation benefits for federal employees, railroad workers, and longshoremen (dock workers) are administered by separate systems from those administered by individual states.
Postal workers and other federal employees have access to benefits under the Federal Employees’ Compensation Act (FECA). Injury and illness on the job are covered by this law.
The Federal Employers’ Liability Act, also known as the Railroad Workers Act, provides protections for railroad workers. In the event of an industrial accident on the railroad, this law allows employees without workers’ compensation to sue their employer. they may get compensation for expenses such as medical care, lost wages, and pain and suffering.
The Longshore and Harbor Workers’ Compensation Act governs workers’ compensation for longshoremen who sustain injuries or occupational diseases while working on U.S. navigable waters or piers.
There are workers’ compensation lawyers who focus on these types of situations. If you are a federal employee, railroad worker, or longshoreman and you get an injury on the job, you should hire a lawyer who focuses on workers’ compensation law.
EZ Can Help
Every business owner should think of workers’ compensation insurance as essential to their operations. It safeguards not only the employees on whom you rely on and who are important to you, but also the hard work that you have put into building your business. But, as with any other insurance policy, there are limits to its coverage. And both employers and employees should be aware of the things that the policy does and doesn’t cover.
EZ is here to assist you with any questions you may have regarding workers’ comp coverage for your business. We will set you up with your own dedicated agent. Who will provide you with instant free quotes, answers to all your questions, and help choosing and signing up for policies, all free of charge. You already have a lot on your plate, so let us handle your insurance needs. To start, simply enter your zip code in the bar located below. Or you can call 877-670-3538 to speak with an agent right now.
It’s hard to say which type of business insurance is most important for your business. They all cover specific things and keep your business protected in different ways. But there is one type of commercial insurance that you are most likely required by law to have if you have employees: workers’ compensation.
This type of policy covers you and your employee if they are hurt while working, or sick because of workplace conditions. Workers’ comp in nearly every state covers medical expenses, disability, rehabilitation, and death benefits. And while there is some uniformity in regard to the benefits available to injured workers across the country. There is considerable variation in the amounts and methods each state distributes. If you want to find out more about how workers’ comp works in your state, check out our state-by-state guide. Then talk to an EZ agent about what you need.
First, though, read on to find out more about how workers’ comp covers these four benefits (medical expenses, disability, rehabilitation, and death). So, you know exactly what to expect from your policy.
Medical Expenses
At its core, workers’ compensation covers medical expenses incurred by employees who get sick or hurt on the job. It will cover most medical expenses for most legitimate claims. Including bills that come from visits to the doctor, inpatient care, skilled nursing care, medication, diagnostic imaging, physiotherapy. And the cost of long-term supports like walkers and wheelchairs.
In some states, though, there’s no coverage for “alternative” therapies like biofeedback and massage. And it’s possible that one state may cover a treatment while another won’t. Additionally, in some states there are limits on certain treatments. For instance, the law might allow no more than twenty-four visits to a chiropractor or physical therapist.
In most cases, workers’ comp does not have spending caps, deductibles, or copayments. And workers will be eligible for benefits until they have made a full recovery from their injury.
Managed Care
A managed care organization (MCO) is a healthcare provider or group of healthcare providers that has a contract with an insurer or self-insured employer to provide managed healthcare services to enrolled workers. In many states, benefits through a managed care plan can be provided by employers or workers’ compensation insurers to get injured workers the care they need. In fact, insurers in some states legally have to offer this option to businesses.
Managed care plans are governed by a wide range of statutes. Typically, a plan will include some combination of the following:
Provider Networks – A network of medical professionals who have agreed to provide discounted services to members of an insurance pool or employee group. In some states, injured workers will have to receive care from in-network providers.
Utilization Management – This type of management is intended to ensure that the type of medical care that is provided to workers is necessary, appropriate, and efficient with regard to costs. Before carrying out particular medical procedures, providers might be have to get prior approval from the insurance company.
Pharmacy Benefits Manager – An administrator of a program that purchases prescription drugs whose job it is to limit spending. A pharmacy benefit manager (PBM) is responsible for establishing formularies, negotiating discounts with drug manufacturers, forming contractual relationships with pharmacies, and paying claims for prescription drugs.
Medical Care Management – This type of management provides supervising care to make sure that injured workers get the appropriate treatment they need. So, that they can get back to work as quickly as possible.
Disability
Disability benefits compensate an employee for a portion of the wages they lose while they are unable to work as a result of an injury on the job. For instance, if a construction worker breaks their leg in an accident. It is highly unlikely that they will be able to return to work until they have fully recovered. Because of the amount of time this will take, they will require financial assistance during this time when they cannot work.
“Disability” as it relates to workers’ comp has four distinct categories:
Temporary Total Disability (TTD) – To receive TTD benefits, your employee must have been injured so severe that they will not be able to return to work at all for a long time. For example, if a worker sustains an injury to their back and is subsequently unable to perform any duties for six weeks, but will then return to their regular responsibilities.
Temporary Partial Disability (TPD) – Your employee has a relatively minor injury that has only temporarily rendered them partially disabled. For instance, a worker breaks their arm while they are on the job and must work reduced hours. They’re able to still work just not to their full capacity.
Permanent Total Disability (PTD) – If your employee has an injury that will not heal and will be unable to generate income in the future by performing the kind of work they were doing at the time of the injury.
Permanent Partial Disability (PPD) – The injury your worker suffers might affect them permanently, like an injury that causes hearing loss, but they might still be able to work. The injury, though, might prevent them from earning as much income as they did before their injury.
Disability Payments
The severity of a worker’s disability will determine how much money they will receive from workers’ compensation benefits. In general, your employee’s average weekly pay prior to the injury is the basis for the calculation of benefits. This amount, though, might be subject to minimum and maximum limits, depending on your state. There will be a waiting period before benefits are provided, which is typically one week. If the disability lasts less than that period of time, your employee will not be eligible for benefits.
Typically, disability benefits are as follows:
Temporary Total Disability – With TTD, benefits will be paid while your employee is recovering. Typically, these benefits are calculated as a certain percentage of the worker’s average weekly wage. For example, if a worker whose normal weekly wage is $1,000 is unable to work due to a broken leg for a period of two months. They will get a total of $667 weekly over the course of the eight weeks.
Temporary Partial Disability – With TPD benefits, your worker will typically receive their normal pay in addition to a percentage of the difference between their normal pay and their reduced pay. This is the case when the worker receives compensation for work that they are able to perform. For instance, a worker who sustains an injury to their leg is unable to perform their regular job duties because those duties require them to stand. They typically make $1,000 a week. During the two months that it takes for their leg to heal, they are responsible for performing administrative work. This job only pays $500 each week. So, there is a difference of $500 per week between their regular pay and their current pay. They will earn $500 per week plus $333 (66.66% of $500). For a total of $833 per week while they are unable to perform their normal duties.
Permanent Total Disability – A worker who is totally and permanently disabled will typically receive compensation equal to 66.66% (or some other specified percentage) of their previous average weekly wage for the rest of their life. When an employee reaches the official retirement age in some states, the benefits they have been receiving will end.
Permanent Partial Disability – A permanent partial disability may be classified as either “scheduled” or “non-scheduled” in some states. Injuries on the schedule typically involve a specific limb, organ, or part of the body. A worker who suffers a permanent injury to a body part in the schedule can receive disability payments for a specific period of time. If an employee loses a finger on the job, for instance. They may be eligible for 45 weeks of disability pay at 66.66% of their regular wage.
Disability benefits for employees with a permanent partial injury not on a schedule are determined in accordance with applicable state law. Benefits may be calculated in accordance with the worker’s degree of impairment, loss of earning capacity, wages lost. Or some other factor, depending on the state.
Rehabilitation
The part of workers’ compensation that covers rehabilitation helps if something catastrophic happens to an employee that prevents them from working and requires long-term treatment for recovery. For example, if an employee has a history of mental breakdowns, such as after prolonged exposure to toxic stress. They may not be able to work for a time. But rehabilitation and therapy during this time may help them recover. Although they may no longer be able to return to your place of work.
Rehabilitation can also include a service called Transferable Skills Analysis, which can help the employee in these situations. The goal of this program is to assist participants in securing gainful employment that puts their acquired skills to use. Their benefits cover the cost of a case manager who will assist them in their job search.
Death
If an employee dies on the job, his or her dependents will receive workers’ comp death benefits. This protection is in place to help families deal with the monetary fallout of a loved one’s death. This type of coverage will help the deceased’s loved ones pay for funeral expenses. And help replace the income they would have otherwise received.
It’s important to be aware of the laws and regulations in your state before purchasing workers’ compensation insurance. It’s also vital that you stay well-informed on your insurance policies. So, that you can communicate effectively with your staff in the event of an accident.
Working With EZ
EZ.Insure knows that in order to succeed, businesses must have all the information possible. That’s why we’re here to answer all of your questions about the commercial insurance policies you need! But don’t worry, we know that your time and money are valuable. So, you won’t pay anything for our services. And you won’t have to worry about being inundated with calls from your agent as they answer your questions, help you compare plans, and sign you up when you’re ready. To start, either enter your zip code into the box below or call 877-670-3538 to speak with an agent. Thanks to EZ.Insure, getting insurance is a breeze.
Do you know everything you need to know about Worker’s Compensation? It’s not a subject many people discuss at the dinner table, but it’s incredibly important to have when running a business in case someone is injured. A small thing like a loose nail or an unstable walkway could spell trouble.
It’s easy to be happy when you know you’re covered!
Before an accident happens, it’s imperative for a business owner to understand the terms of Worker’s Compensation coverage, how to qualify as an employee, what it covers, and what it will cost you.
What Is “Worker’s Comp?”
This agreement states that as long as an employee receives wage replacement and medical benefits, the employee will not sue the company for negligence. Meaning, if you’re injured on site due to something workplace related, you’ll be covered for the amount of work you miss plus hospital bills. But, you cannot sue the company specifically for failing to take proper care. This protects employers and employees.
It’s state-mandated, and the particulars change based on your location. EZ.Insure’s agents are familiar with this information, local or not, so by calling us, you’re saving some time.
Good news is, safety regulations are solid nowadays.
Your employee may have questions for you during this time. EZ.Insure will give you the knowledge to answer securely.
How Can Your Employee Qualify?
For an injured employee, there are only four checkboxes to qualify:
You must be employed by the company.
Your illness/ injury must be work-related.
Your case must fall in state guidelines.
The employer must have Worker’s Compensation insurance.
What Is / Is Not Covered by Worker’s Compensation?
Workers Compensation insurance covers most workplace injuries, but you may be refused assistance if your injuries are self-inflicted, occurred during a crime, or if your actions during your sustained injury violated company policy. For example, if your employee happened to sustain an injury while robbing you, rest assured their injury most likely won’t be covered.
The injured employee doesn’t need to be injured “on-site” to be covered. Worker’s compensation can also come into place when your injury is sustained, and it’s job-related. This could be if your company plans a trip overseas for a meeting, and your employee happens to break a limb during the outing.
When it comes to your medical expenses, you’ll find support with diagnosis and treatment. Depending on your state, it can also provide disability payments, rehabilitation, or retraining.
This should provide ample cushion for your employees to recover and return to work.
What Are the Costs?
The average cost of a worker’s compensation claim is $38,000 (from 2005). This is a combined total of both the medical side and loss in productivity. That’s a down payment for a house or a mid-size car.
For a company, the average cost per $100 in employee wage ranges from $0.75 to $2.74. It doesn’t seem that bad, but this does depend on the state. If you’re looking into getting this for your company, contact your local office to get specific information.
Do Worker’s Compensation Costs Change Per Business Type?
Depending on what your company does is how much you’ll be quoted for worker’s compensation.
Depending on your company, the money outflow is going to fluctuate. For example, in the office building, your cost per $100 goes down to about $0.12. It doesn’t sound that bad, but it’s because injuries happen less often in this environment.
If you’re a painter or a landscaper, this average jumps up to $7-9/$100. You’ll have to take a look into the work you’re doing, and how it may affect an employee. Your business needs a strong hand with inside knowledge to provide you with the best quality insurance.
EZ.Insure has the experience to help you excel. Your agent will answer any questions you have, compare different plans for you, and even sign you up when you’re ready, free of charge and without having to worry about being hounded by endless calls. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing [email protected], or calling 888-350-1890. EZ.Insure makes the entire process easy, and quick.
