How Does Workers Comp Work

Workers Compensation
Questions about the workers compensation system, such as how does workers comp work, can help you learn the answers about how to win a workers comp claim if you’ve suffered a work-related illness or injury.

The workers compensation system is the oldest insurance system in the United States. Industrial jobs were plentiful during the early 20th century, and workers suffered more injuries in factories or in the process of operating heavy machinery.

Workers compensation was created to compensate employees for work-related injuries andharm. Before the workers compensation system was created, an injured disabled worker was required to sue the employer to recover lost wages and/or future earnings as well as medical expenses to treat the injured or disabled worker’s medical condition.

Today, workers compensation helps the injured, sick, or disabled worker to achieve financial stability in a time of crisis. If the worker is too sick to work, the thought of paying lawyer’s fees or preparing for trial against the employer could be devastating.

Workers Compensation Today

According to the Department of Labor website, approximately 55 workers compensation programs in all 50 states work to assist American workers. Each workers’ comp program is state-government managed and operated.

More than 1,200 insurers offer workers comp insurance policies to employers. States require employers to carry workers comp insurance to cover workers injuries and illnesses.

Workers comp programs help injured workers to pay for current and future medical costs, replace the loss of current and/or future earnings, and even provide vocational rehabilitation assistance when the worker can train for a new occupation or job.

Workers comp programs also pay the workers survivors when death occurs as the result of work-related injuries. If the worker dies after an accident or injury relating to his or her job, workers comp benefits typically pay for funeral costs. Survivors, such as the worker’s spouse and children, receive wage replacement benefits.

If the worker is injured, he or she receives compensation for current medical costs and receives cash benefits for wages and lost work after that.

Workers Compensation Exclusions

Not all workers in the U.S. are covered by workers compensation insurance. A business with five employees or less, independent contractors, agricultural or farm workers, and domestic workers may not receive workers compensation coverage from an employer. State law may still require the company to purchase general liability coverage.

Workers compensation insurance is an important financial planning tool for those who are covered by it. If the covered employee suffers an injury sustained at work or an illness or effects from long-term exposure to a hazardous environment, he or she can claim workers comp benefits.

Work-related injuries and medical conditions covered by workers comp insurance vary. For example, a worker may fall and break a leg or arm. If he or she performs physical labor, loss of the use of the limb affects the ability to perform the job. Other examples include eventual hearing loss from exposure to loud noises in a factory over the years or carpal tunnel syndrome that developed from years of typing.

Workers comp insurance says that the worker’s illness or injury must be caused by performing the job or developed due to the worker’s employment environment conditions. Not all injuries or illnesses sustained by the worker are covered by workers comp insurance.

Workers Compensation and “Coming & Going” Rules

Workers who sustain an injury during a commute to or from the place of employment aren’t covered by workers comp insurance. However, other transport-related injuries, such as running an errand for the employer, traveling for work, or carrying/transporting goods for the employer may be covered by workers compensation benefits.

If the covered worker is injured while performing his or her job, it’s good practice to consult a workers comp lawyer specialist. This is an especially good idea when the employer leads you to believe the workers comp claim may be challenged by the insurer or the company itself.

Consult a Workers Comp Attorney

Most workers comp lawyers offer free consultations to discuss your matter. Many are required by laws of their state to provide legal services on a contingency basis. A contingency fee agreement between the workers comp lawyer and the client requires the lawyer to work on the client’s behalf until the claim for benefits is awarded. A contingency contract means the client doesn’t pay unless the lawyer succeeds.

In addition to seeking legal counsel from a workers comp lawyer, it is crucial to file the workers comp claim with the employer as soon as possible after the injury or accident happens. After notifying your employer, it must provide you with a claim form. After submitting the completed workers comp claim form, the employer or its insurer may contest your claim. In that case, a court hearing may result.

Typically, workers compensation is about 50 to 67 percent of the worker’s usually compensation. However, monetary compensation received as workers comp is free from taxes. For most people, monetary compensation comes close to after-tax income earned while working. All medical expenses of the injured worker are covered under workers compensation benefits.