Statistics show that the number of written premiums has been increasing since 2010. According to the data, transportation accounts for the highest number of workplace deaths and injury cases.
So, when you get involved in a workplace accident, do you ever know who pays for workers compensation?
It’s common knowledge that the employer is responsible for paying the benefits. But most people don’t know how the entire process works, particularly when it comes to handling claims. Plus, different states have varying laws and policies regarding the payment of workers’ compensation.
This post is here to make everything clear to help you know exactly who shoulders the burden of workers’ compensation costs.
Keep on reading to find out more!
Learn More from Your Employer
Employers have different policies for workers’ compensation. When taking up a new job, you need to get familiar with your employer’s policies.
In some states, the law requires employers to buy workers’ compensation policy. If you get involved in an accident, their insurance company will pay the benefits.
Some employers have self-insurance. In this case, the employer pays the benefits instead of the insurance company.
Whatever the case, be sure to know what your employer’s policy says about determining fault during an accident. Your employer can willingly deny your claim if you didn’t follow the necessary safety measures.
In some states, certain employers are exempted from the workers’ compensation policy due to their type or size. However, they must have an insurance policy to meet the medical care costs and pay for lost wages and patient rehabilitation.
How Compensation Works
Taking the time to go through your employer’s policy is essential. It helps you to learn how to file claims and how the assigned adjuster will handle your case. Most importantly, you’ll understand their information on types of injuries, causes of injuries, and employer liability.
Due to the complexities of workplace injuries, there are classification codes that are used in determining rates and premiums.
The National Council Compensation Insurance (NCCI) offers these codes, but there are certain employers with their own codes. It helps to know such cases – and this useful page offers more information on what you need to know.
With that in mind, let’s explore the sources of money, which will be needed to cover your benefits.
1. State-Run Programs
Some employers may choose to offer workers’ compensation coverage through a state-run program. The U.S. Department of Labor (DOL) administers such programs. Also, departments of industry relations and commerce are usually involved.
Most employers who choose to use state-run programs are those in industries that are known to have few cases of workplace injuries. If your employer is part of these programs, the party responsible for paying your workers’ compensation is the department that administers the program.
In this case, the state department plays the role of an insurance company when handling your claims.
2. Insurance Companies
Paying compensation benefits through insurance companies is the most common option for employers. These are usually private insurance companies, and most states allow employers to purchase insurance from them.
Examples include State Farm, Geico, Liberty Mutual, Allstate, and Chartis. If your employer uses such companies, then you’ll direct all complaints or issues to the responsible company. They will also provide an adjuster who will handle your case.
However, not all states allow private companies to offer insurance.
A good example is Washington. Employers have two options for providing compensation. They can either self-insure, which they must qualify for, or purchase insurance through the Washington State Department of Labor and Industries.
Large companies with sufficient assets may consider the option of self-insurance. Keep in mind that not all employers can qualify for this option. Some laws require interested employers to prove that they have enough assets to cover the expected liability.
In fact, there has been an increase in the number of companies that are self-insuring. This is because it’s possible to save money over time by eliminating intermediaries in covering employee benefits. However, in this case, the employer places all the risk with the company.
With self-insurance, employers are usually solely responsible for covering workers’ compensation cost. Some can use a third-party company to administer the program. In this case, your employer sends the money to the administrating company, which, in turn, sends the money to you.
Self-insured companies have adequate resources to fight claims. If you work for one, it’s advisable to enlist the services of a lawyer in pursuing your compensation.
How to File a Claim
Now that you understand who pays for workers’ compensation, you need to know how to file a claim.
After the accident, it’s important to report all injuries to your manager or HR department. They will give you an incident report to fill out. Be sure to include witnesses and the accurate account of the events.
The company may want to offer you a doctor, but you should insist on getting your own. However, some employers may have a policy that restricts working with your desired doctor immediately following the injury.
Keep your medical records and ensure they include everything about your injuries.
Don’t accept compensation from your employer until your doctor confirms that you’re okay. Doing so will prevent you from filing claims should you experience other health issues as a result of the injury in the future.
Also, you should hire a lawyer when your employer is not ready to offer you what you’re really owed. In most cases, employers usually rush to pay compensation to avoid possible future costs.
Who Pays for Workers Compensation? The Takeaway
Well, at this point, you understand some of the critical details regarding the payment of workers’ compensation. The most important element is that you should always read your employer’s policy to understand how they handle workplace injuries.
This will make it easy for you to know who pays for workers compensation should you be involved in a workplace accident. You can also learn more about maximizing your insurance settlement claim on our blog.