What are Workers Compensation Benefits?

There are four basic types of workers' comp benefits paid by insurance companies

Workers' compensation benefits are the payments an insurance company makes to the insured's injured employee, or another related party, based on the terms of the insurance policy. Types of payments include:

Workers' Compensation Medical Benefits

Medical benefits are are payments made for the medical treatment of a work-related injury or illness. Their is no maximum threshold for medical benefits. Insurance companies will not pay for the treatment of other injuries or illnesses unrelated to the job injury, even if the treatment was provided at the same time as the treatment for a work-related injury. Health care provider should not bill the carrier for treatment related to a work-related injury or illness, but may bill you for treatment of other injuries or illnesses.

All employees have the right to receive necessary medical treatment immediately after the work-related injury or illness. If the business has elected to contract with a certified workers' compensation health care network (network), injured workers may be required to obtain medical treatment through the network

A doctor may only request payment from you or the carrier when the work-related injury or illness has been reviewed by a case manager for dispute resolution, and the injury has been determined to be an injury or illness that is work-related.

It generally beneficial to all parties if injured employees return to work as quickly as possible. Injured employees that continue to work as part of their recovery/treatment plan, in medically appropriate productive work, heal faster, and are more likely to retain their job skills. There is not always a specific end date for reasonable and necessary medical treatment for a work related injury. Getting employees back to work often costs less and helps reduce long-term insurance premiums caused by increased EMR Rating.

Workers' Comp Disability Benefits

Disability benefits are also known as supplemental, income and cash benefits. There are four types of income benefits:

1. Temporary income benefits
2. Impairment income benefits
3. Supplemental income benefits
4. Lifetime income benefits

Workers' Comp Death Benefits

Death benefits can replace a portion of lost family income for dependents and eligible family members when an employee is killed on the job. Benefits may also be payable to parents when there are no surviving eligible dependent family members.

A beneficiary becomes eligible for death benefits the day after the employee's death. Death benefits end at different times depending on the beneficiary's qualifications to be entitled for this benefit. Death benefits may be paid if there is an eligible:

• Surviving spouse
• Dependent child
• Dependent grandchild
• Other eligible dependent family members such as parents may be eligible when there are no other surviving eligible dependent family members

Eligible Beneficiaries:

• A spouse is usually eligible to receive death benefits for life unless he/she remarries. Upon remarriage, the insurance carrier will typically pay a two (2) year (104 weeks) lump sum payment
• If there are minor children, the benefit is divided between the spouse and the minor children. One half is paid to the spouse and the other half is divided equally among the children
• Eligible children can usually receive death benefits until age eighteen (18) or twenty-five (25) if enrolled as a full time student in an accredited college. If there is more than one minor child, as a child loses eligibility the benefits are re-distributed among the other eligible children

Burial Benefits Covered by Workers Compensation

Burial benefits are paid to the person who paid the deceased employee's burial expenses. The maximum burial benefit allowed is usually between $4,000 and $12,500 depending on individual state law.

A beneficiary becomes eligible for death benefits the day after the employee's death.

Workers' Comp and Disability

Don't confuse disability insurance with workers' compensation disability payments. When you buy disability coverage you are buying an insurance product that pays a set amount of lost wages for injuries that happen off the clock. In other words, a disability insurance policy does not pay for injuries that would be compensable under workers' comp insurance. Conversely, workers' compensation insurance will not replace amy lost wages if an employees' injury was sustained outside of work.

It is not uncommon to see workers' comp claims where an injured worker claims they were injured at work even though the injury happened over a weekend. This type of fraud is frequently caught and employees can be fined and required to repay the insurance company.

There are three types of disabilities under workers' compensation insurance:

• Temporary Total Disability (TTD) Benefits
• Typically requires a waiting period of 3-7 days to be eligible
• Pays up to 66 2/3% of wages up to state weekly average (changes each year)
• Pays for a set amount of time which varies by state

• Permanent Total Disability (PTD) Benefits
• Pays up to 66 2/3% of wages up to state weekly average (changes each year)
• May pay up to age 65 in most states

• Permanent Partial Disability (PPD) Benefits
• Pays up to 66 2/3% of wages up to state weekly average (changes each year)
• May pay up to life in some states

Workers' Compensation Settlements

More than 70% of injured workers who receive disability end up with a workers' compensation settlement. The average settlement amount is ambiguous because its negotiated based on numerous factors including medical costs, lost wages, scarring, deformation, degree of impairment, future risks and more. Insurance companies often pursue settlements in order to receive future indemnification from the injured worked. In order to receive a settlement, an injured workers typically has to give up their rights to seek future damages from the insurance company and the employer.

The Business Owners' Role in Settlements

Settlement negotiations typically happen between the injured employee, their attorney and the insurance company. Employers should seek to be as helpful as possible, but business owners should remain neutral as the results are outside of their influence. While the cost of claims can affect an employers' experience modification rate, business owners need to let the insurance companies do their job and mitigate future liability for both parties.