Workers’ compensation is mandatory in almost all states in the United States. This type of insurance protects employees when they get injuries or become disabled in the workplace. It also protects employers from suits that may be filed by employees due to work-related injuries. Keep reading to learn how to save money on workers compensation insurance.
Here are 16 things you need to know about workers’ compensation insurance or workers’ comp:
Each state is different
States regulate workers’ comp. Each state has a workers’ compensation board that makes rules and regulations and oversees disputes. They have their own laws and differ mostly in the number of workers before they purchase workers’ comp, exempted workers, and the industries included. But in general, workers’ compensation is a requirement.
You must be an employee to be eligible for workers’ comp.
Not everyone is eligible for workers’ compensation. Some states exempt certain types of employees due to their work status and their job description. You are an employee if you are:
- Directly employed
- Using the tools and equipment of your employer at work
- Employed for a long term position
- Performing regular tasks for your employer
There are several criteria to meet before you can receive benefits
To enjoy the full benefits of workers’ compensation, you need to fulfill certain criteria.
- Your employer must carry workers’ compensation
- Your injury or illness must be work-related
- You must meet the reporting deadline and claim to file
There are 4 types of workers’ comp benefits
If you get injuries in the workplace, you can also get benefits from workers’ compensation. These benefits are:
This coverage includes all the costs of medical treatment related to work-related injuries and illnesses. This will include:
- Hospitalization
- Prescription medicines
- Medical equipment
- Nursing care
- Emergency room visits
- Surgical and medical services
Wage benefits
If you are unable to work for a certain period of time due to work-related injuries or illnesses, you can receive lost wages benefits.
Ongoing Care
Some injuries and illnesses may require long-term care. Workers’ compensation will cover care costs like physical therapy and rehabilitation
Death
Workers’ compensation will cover funeral costs in case of workers’ death. It will also provide death benefits to the employees’ beneficiaries.
Employer obligations
- Employers have to purchase workers’ compensation for all their employees
- Furthermore, employers have the requirement to post a notice of compliance with workers’ compensation laws in a visible area in the workplace for all employees to access and read
- Employers also have the requirement to give immediate medical treatment to employees injured in the workplace
- You should also submit a claim report within the allowable time frame to the workers’ compensation board or authority in charge
- Comply with all requests for reports for injury, claim, employee earnings, and other reports that may you need to determine the status of the worker’s injury or illness
Employee obligations
- Immediately report any work-related injury or illness
- Ensure that the employer fills out the injury or illness form in a timely manner in order to receive medical expenses payment
- Get treatment at the nearest emergency room or facility.
- Maintain accurate records. Keep track of all forms, medical records, and correspondence from employers, insurance carriers, and doctors
- Cooperate with the insurance company. Adhere to all requests for documentation. If they decide to have you checked by an independent physician, comply and seek the doctor.
- Take part in your recovery and return to work plan. Coordinate with your employer and work towards your goal to go back to work
- Follow doctor’s orders and attend rehab sessions if needed to ensure fast healing.
Workers’ Compensation Fraud
Workers’ compensation fraud occurs when someone falsely reports or conceals information to receive compensation benefits or prevents someone from receiving them. You can do this through the following:
- Misclassification of employees
- Inaccurate number of employees
- Inaccurate incident reports
- Falsely claimed work-related injuries
- Inconsistent medical treatments
- Inconsistent billing records
Benefits of Workers’ Comp
Workers’ compensation benefits both employers and employees. Employers, you can avoid massive expenses if your employees get injured in the workplace. It will also save you from lawsuits from disgruntled ill or injured employees.
Workers or employees on the other hand will have peace of mind knowing that they can get compensation if they are injured or taken ill on the job. Accidents happen and you will never know when. With workers’ compensation, you will receive benefits that can help you during the recovery process.
How To Save Money On Workers Compensation Insurance
Employers naturally want to save on insurance premiums if they can. There are several ways to do this while still making sure that employees are with protection if they have workers’ compensation. Here are some tips to save money on premiums:
- Have a safety program at the workplace. Document them and post them in visible areas for all workers to see. Do safety training regularly. Ensure that all employees know how to handle emergencies and do first aid basics.
- Minimize job hazards. Evaluate the workplace and look for accident-prone areas and fix them.
- Have proper job descriptions and classifications. Employees should only do what they need to do. They should not be working on other things that are not in their duties and responsibilities.
- Have a substance-free workplace. Prior to hiring, make sure that each applicant understands workplace policy on drugs and alcohol. Employers can require mandatory pre-employment drug testing and random testing for employees.
- Have a return to work program in place. The goal is to get an employee back to work as soon as possible. Check on your injured or ill employees regularly and help in their rehabilitation process.
1099 Workers
A 1099 worker is an individual who is a freelancer or works as an independent contractor. They provide specific services within their expertise usually per-project basis but can serve multiple clients at the same time. 1099 workers are mostly self-employed which makes them business owners themselves.
In most U.S. states, workers’ compensation is not a requirement for self-employed contractors or freelancers. However, there are some companies that require some insurance coverage before they will hire 1099 workers. This can be waived in some cases but if it is a requirement for the contract, then 1099 workers are obligated to purchase insurance.
Telecommuting Workers
Telecommuters or work from home employees is now gaining popularity. These workers have jobs that do not require a physical presence in the workplace. They do their work during the prescribed working time and are monitored remotely by their supervisors.
This new normal way of working is still covered under workers’ compensation. While it is more difficult for the employer to determine if an injury or illness occurs during a work task, the burden of proof lies on the employee. They must be able to show or demonstrate that the injury happened while working for their employer.
Mental Health Issues
Mental illnesses are common after an injury or illness. They have become increasingly common especially if injuries are severe. This condition is hard to measure which is why most states offer limited coverage for mental health conditions. To receive workers’ comp benefits from mental health issues, you need the following:
- Proof that your mental condition is a result of work-related injury or trauma
- You are diagnosed by a mental health professional
Hiring a Lawyer
Typically, you don’t need to hire a lawyer to get the benefits from workers’ comp. However, if there are any complexities in your case, you should consider hiring one. You would need a lawyer when:
- Your employer refuses to cover all medical costs
- Your employer denies your claim
- You have a claim against a third party
- You are accused of fraud
- Your employer denies that the injury occurred in the workplace
Penalties for not carrying workers’ comp
Not carrying a workers compensation penalty varies from state to state. It can result in huge fines, criminal prosecution, and jail time. Aside from legal ramifications, you are also obligated to pay for all medical costs, lost wages, and even funeral costs and benefits of the worker. And if you are sued by your employees, you can lose your business, your properties, and your assets.
Challenges for workers’ comp
There are many challenges that workers’ compensation faces in the world today. The increasing number of aging workers is one of them. Old age means more comorbidities and making claims for work-related injuries and illnesses will be more complicated.
Another challenge is the cost of medical care. New technologies in treating patients mean more expensive payouts. The cost will be passed on to employers which means higher premium payments.
Mental health issues are also a big challenge in workers’ compensation. Young workers are more at risk to have these issues. First responders are also at risk to have post-traumatic stress disorder or PTSD. The burden of proof for mental health issues has been constantly debated as it is hard to prove to be work-related.
Purchasing workers’ comp
To protect both employer and employee, it is important to have workers’ compensation. Aside from being regulatory compliance, workers’ comp provides many benefits to a business. You can purchase this type of insurance from your state or from private insurance companies.
If your business is in Colorado, you can purchase workers’ compensation from expert agents at Advantage Insurance Solutions (AIS). We hope to be able to help your find the right coverage while showing you how to save money on workers compensation insurance today.