Workers' Compensation (also known as workmans' compensation or workers' comp) is a type of insurance available for employees in the event they become injured due to an on-the-job incident. You may be aware that it's available but do you really know the ins and outs of it? While workers' comp benefits vary from state to state and you should always contact your state's workers' comp board for details, I spoke with three lawyers who offered a general breakdown.
Types of Workers' Comp
There are several different types of workers' comp benefits. The most common types include: medical care, rehabilitation, cash benefits, and supplemental benefits.
Nathan Morris, attorney and partner of Bighorn Law noted: Medical care typically covers any bills associated with your diagnosis and treatment including surgery and medical expenses. Rehabilitation benefits are designed to aid in recovery.
When people think rehabilitation benefits they automatically think physical therapy according to Marc Lamber, attorney and partner on the Lamber Goodnow team, but physical therapy is only one part of it. Rehabilitation extends to vocational rehab, which covers job training such as education repayments and aptitude tests in the event workers are unable to return to their existing job.
Cash benefits and supplemental benefits both can cover lost wages.
How Workers' Comp Differs from Health Insurance
The key difference between health insurance and workers' compensation is that health insurance covers injuries that are not job-related, added Lamber. Employers are required to purchase insurance that covers work-related injuries but are not required to offer health insurance.
How Workers' Comp Works
When an accident happens on the job, it's important to tell your employer and fill out a workers' comp claim form. Some states require the incident be reported in 30 days or less. Reporting the incident is step one.
Jim Terry attorney and partner of Terry and Kelly, PLLC notes that it's always best to make the report right away - the injury could get worse or be harder to prove over time. Telling your employer verbally is never enough, added Nathan Morris. "Detailing the injury via email is best so you have a date stamp. Print your sent email and any email correspondence about the accident following."
The next step is to see a doctor - some employers require it. Don't downplay your injury; doing so could weaken your case. Get a Report of Work Ability (RWA) form from your doctor.
"Most people don't realize how important the RWA form is," said Nathan Morris.
An experience rating will be an integral part of the process and is defined by the National Council on Compensation Insurance (NCCI) as "a method for tailoring the cost of insurance to the characteristics of an employer or risk." Keep in mind, the method of tailoring varies from state to state. For example, California uses a merit rating system. Nevada and Arizona refer to the NCCI for determination.
In rare cases, a prehearing or mediation will be needed, followed by a hearing in cases in which an agreement can't be made with the insurance company - these are the final steps.
After the claim is accepted, payment is made. If it can't be made in time to cover medical expenses, many states will reimburse you costs associated with payment.
In Texas, payment is made by check, electronic funds transfer, or an access card program, added Jim Terry. The amount you earn is based on the type of benefit you're granted. The length of time benefits are granted varies between states, however, typically there is a limit unless you are granted permanent disability benefits.
Determining Workers' Compensation Qualification
How do you know if you qualify for workers' compensation? There are two types of typical workers' comp claims, notes Nathan Morris, "either an injury or an illness/disease." Whether or not you qualify depends on if the workers' comp system sees your injury as "something that was caused as part of your job and happened because of something that is part of your job." He went on to explain:
The system defines an injury as a "sudden and traumatic happening producing an immediate or prompt result established by medical evidence." It's a verifiable event that causes harm. If the injury cannot be proven, it's admissible.
All three lawyers noted that a big concern about workers' comp for employees is that it could be a drawn out or complicated process. If you're an injured employee who does not report your incident right away, this could be the case. The process is simplified when you follow it directly as your state advises. Concluding our interview, Nathan Morris suggested documenting the actions you take during the process. "Keep a folder of dates, who you spoke to, and what the conversation entailed. You may not to recall some of this information later in the process and having that folder will help you prove a case in the event you ever needed to go to court over the issue."