If you get hurt while you’re on the job, the last thing you should be worrying about is how to pay the bills and take care of your family. For years though, that’s how it was for many families. But in 1902, the first workers’ compensation law was passed in Maryland and by 1949, all states had laws on the books to protect workers who were injured while working from losing everything because of their injury. It also provides income for surviving members of the family if a worker dies from their injuries. It’s important to note that a person who files and has a worker compensation claim approved relinquishes the right to sue his or her employer. This is called the compensation bargain. Each state runs its own program, so some rules and requirements vary, but we’ve provided overall information about these types of programs here.
How Does it Work?
Let's say you paint houses for a living and one day while you’re working on a scaffolding, one of the ropes breaks, the scaffolding tips, and you fall 10 feet to the ground. Your injuries include a broken ankle and a broken wrist. Obviously, this means you cannot work, and therefore you can’t make money until your injurie heal. So, what’s an employee to do?
That’s where workers’ compensation comes in. It’s a type of insurance employers are required to have for instances just like the one described above. People who are injured while doing their jobs need to be able to get the medical care they require and still keep a roof over their heads. That’s what workers’ compensation provides.
How is the Cost Determined?
Workers’ compensation payments are determined by each state and by the federal government for federal employees, longshoremen, and miners. Not including medical bills, worker’s compensation payments are generally two-thirds of the injured employee’s income. For example, if an employee qualifies for workers’ compensation and makes $600 a week, his compensation would be about $400. Learn more about the cost here.
What Businesses Carry Workers Compensation?
All businesses with five or more employees are required to carry workers’ compensation insurance. There are a few exceptions. For example, some farm workers and businesses that utilize independent contractors are not covered by workers’ compensation. Or, if a business has more than five employees and some of them are independent contractors, the employees would be covered by workers’ comp but the independent contractors would not.
So, if Karl works at a pizza place with two other people and the owner, the restaurant owner isn’t required to carry workers compensation. That means that if Karl gets a burn from the oven that requires skin graphs and a round of antibiotics, his treatment will not be covered by insurance. However, if there are 10 employees, the owner would be required to pay into workers’ compensation, so that nasty burn on Karl’s arm would be covered. Learn more about companies here.
What Kind of Injuries are Covered?
In most states, any injury sustained while working is covered. Whether the employee is injured at the office, on a job site, or by a customer or another employee; if the injury happened while the employee was working, it is generally covered by workers’ compensation. Workers’ compensation will not pay for treatment or wages. Benefits are also paid to the surviving family members if the worker dies from his injuries.
What Kinds of Injuries Aren’t Covered by Workman’s Comp?
Although most injuries are covered by workers’ compensation, there are a few exceptions where they aren’t:
- If an employee is injured while the employee is doing something illegal
- If an employee is injured while violating company policies
- If an employee is injured while not at work
- If an employee inflicts injury on himself during a fight
So, if an employee picks a fight with another employee and his jaw is broken, treatment for his jaw and lost wages would not be covered.
Is Workman's Comp Short-Term or Long-Term?
Workers’ compensation lasts for as long as the injured employee needs to recover and return to regular duties. In this regard, workers’ comp is neither a short nor long-term program. If an employee’s injuries are so severe that they cannot return to their former job, other parts of the workers’ compensation program may kick in. These programs vary by state.
What are the Benefits of Workers Comp?
Workers’ compensation offers the following benefits (these can vary by state so check with your state’s program for actual benefits):
- Payment of medical bills directly related to the diagnosis and treatment of the covered injury
- Cash benefits for workers while they recover from their injuries - This is typically up to two-thirds of the worker’s normal pay
- Rehabilitation and therapy for workers
- Retraining for another job or career if deemed necessary
In other words, if a worker’s compensation case is approved, all costs related to the treatment and recovery efforts, as well as financial assistance, are covered. And, in the event that a worker cannot be rehabilitated to the point where he or she can continue to do their previous job, training for a new position or career is also covered.
Are All Employees Covered Automatically?
Full-time, part-time, and seasonal workers are all eligible to collect workers’ compensation benefits if they are injured while working. The only requirements are that the workers are paid employees that have taxes deducted from each pay. This, of course, is in addition to the employer being required to purchase the insurance if they have five or more employees. Volunteers and independent contractors are not eligible to collect workers’ compensation.
Does It Cover My Medical Bills?
Workers compensation covers all medical bills directly related to the diagnosis and treatment of a work injury. If you hurt your back while at work, medical bills you incur to treat the injury such as doctor co-payments, x-rays, or other protocols used for treatment, are covered. However, if you injure your back while playing in a neighborhood football game that is unrelated to work, those medical expenses will not be covered by workers’ compensation.
How Does Workers Comp Pay You?
Workers’ compensation payments are made through either the insurance company that offers the coverage or through a state-run benefit group. Your employer can tell you where the funds will be distributed from and in what increments. Travelers’ Group, Hartford Group, and Berkshire Hathaway are examples of insurance companies that pay out workers’ compensation claims. Your state’s workers’ compensation program can also provide you with some information. For federal employees who receive workers’ comp through the federal government, those are administered through the agency that approved the claim. For example, for a black lung claim, those are paid through the Federal Black Lung Program. Funds are distributed as either a paper check, mailed to the benefactor, or, if available, through direct deposit.
If You Receive Workers Comp, Are You Still Eligible for Disability, Unemployment, or Social Security Benefits?
The short answer is, yes. If you file a workers’ compensation claim, you are still eligible to apply and claim disability, unemployment, or social security benefits.
Disability – Disability would kick in, after it’s been determined that you cannot return to your current position and training for a new position isn’t an option. If you have private disability insurance such as AFLAC, it will pay out along with your workers’ comp insurance.
Unemployment - You are entitled to file for unemployment if you are let go from your job while awaiting the workers’ compensation decision. It’s important to note that an employer who terminates the employment of a person who was injured while on the job could be in violation of state and/or federal laws, so consulting with a legal expert in your area might be an option.
Social security - You are still eligible to collect social security benefits while receiving workers’ compensation, however your social security payment might be reduced.