A Foolproof Guide to Workers’ Compensation Insurance

What is Workers’ Compensation?

Workers’ Compensation is business insurance that helps employees pay for work-related injuries and disabilities. Moreover, it helps pay for medical care, lost wages, and even funeral expenses in case of death. So, let’s discuss workers’ comp.

What is a work-related injury?

A work-related injury is an injury, illness, or condition related to job duties or work during employment. Also, the Occupational Safety and Health Administration (OSHA) definition of a work environment is part of the employer’s premises and other locations where employees are in work-related activities. 

Is Workers’ Compensation Required?

All U.S. states except for one, which is Texas require workers’ compensation. The type of coverage varies from state to state. Some states allow employers to buy private insurance for their workers, and some state exempts certain types of workers from workers’ compensation. Don’t get caught without it!

What Does Workers’ Comp Cover?

If an employee is injured in a work-related environment, worker’s comp will help pay for:

1. Medical Expenses

Any medical expenses that involve work are part of this coverage. It includes emergency room care, doctor’s visit, surgeries, and prescription medicines. 

2. Rehabilitation Expenses

If your injury needs continuous treatment like therapy, workers’ comp will cover ongoing costs. 

3. Lost Wages

For lost wages, this is in case your injury or illness will prevent you from doing your job for a certain period of time.

4. Disability Care

In case a worker is disabled and will not be able to work permanently or temporarily, worker’s comp will give financial and medical support.

5. Funeral Expenses  

If a worker dies due to complications, funeral expenses and death benefits for the family left behind are included.

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Who Are Eligible for Workers’ Comp?

Any worker directly employed needs workers’ insurance. But some states exempt certain types of workers because of the kind of work they do. Exempted workers are:

1. Agricultural Workers
2. Seasonal Workers
3. Real Estate Agents
4. Independent Contractors
5. Temporary Workers
6. Foreign Workers

Employer’s Duties and Responsibilities

1. You must display a workers’ compensation notice poster where it is readily accessible to all employees. They should be in the language employees understand. Also, employers should not display the poster in areas where most employees have no access. 
2. Provide emergency treatment for the injured employee. If no first aid equipment is available, seek immediate treatment at the nearest emergency room. 
3. Establish a procedure in your company on what to do if a worker has injuries or gets ill. There should also be a protocol where everyone knows what to do if accidents happen. 
4. When an injured worker receives emergency treatment, investigate the cause of injury or illness immediately. Have forms available at your office for immediate incident reporting. Check where the accident happened and immediately take steps to avoid further injuries. 
5. Report injury as soon as the employee can fill out the necessary forms. We also need the signature of both the worker and employer. 
6. Comply with all the requirements from your insurance provider.

Employees’ Duties and Responsibilities

• Once you start working, look for posters where details of workers’ compensation are on display. Take note of the healthcare provider and list down the contact number.
• Report your injury or illness immediately to your supervisor. Provide details like time, location, and how you sustained injuries or got ill. Give accurate reports, and do not exaggerate the circumstances surrounding your accident.
• Fill up all the forms required to report the incident and have your employer sign and mail them to the insurer.
• See an approved doctor and not the doctor of your choice unless it is acceptable to your insurer. 
• If injury or illness prevents you from working, inform your supervisor about your progress. 
• Keep track of the time you are not at work because of the injury
• Keep all pertinent records like hospital bills, doctor’s visits, rehabilitation records, and medical equipment if needed. 

Workers’ Compensation Fraud

This occurs when an employer, an employee, or a healthcare provider makes a false statement to defraud the insurer. 

For the employer, fraud occurs when:

• Permanent and fully employed employees are misclassified as temporary or contractual workers to lower insurance premiums.
• An inaccurate number of employees lowers the cost of insurance.
• Safety measures exist in the work environment, even if they do not exist.

An employee commits fraud when:

• Injuries are falsely claimed to be as work-related. They may have slipped on their house floor and claimed it was in the workplace where they fell. 
• Incident reports are inaccurate. There are inconsistencies and a lack of witnesses during the accident. 
• There is a history of previous claims. They may have claimed insurance before with another employer or business.
• Reporting back to work is not a priority. They seem to enjoy their “injury vacation” and continue to claim their benefits.

The healthcare provider can also be charged with fraud if:

• Medical treatment is inconsistent with the reported injury
• Medical reports are inconsistent with the employer’s report
• Billing records are not consistent with employee’s reports and records
• There is a pattern in working with the same doctor and attorney on claims.
• Every time a worker goes to their clinic, there are claims of injuries or illness.

Any employer, employee, or healthcare provider guilty of workers’ compensation fraud will be punished with penalties and imprisonment for up to five years, depending on the severity of the charges filed. 

How to Save Money on Workers’ Comp Insurance

Having workers comp will save you money when your employees suffer from work-related injuries and illness in the future. It will save you from financial losses when workers sue you for not helping them recover from an injury or illness. 

In the meantime, you can save from paying too much for workers’ insurance if you follow these money-saving tips:

1. Make a written safety program for your company. This is an essential requirement by the government. It consists of written policies, work rules, and procedures in a business setting. There are written procedures to follow to stay safe at all times. Whether big or small, your company should always have this written safety program. It should be regularly updated to cope with the changing conditions in the workplace. 
2. Train all employees. There should be a safety training program for emergencies at least twice a year. There should also be basic first aid, CPR, chemical handling, use of fire extinguishers, and other workplace hazard training applicable to the nature of your business.
3. Implement a return-to-work program to entice injured workers to return to their jobs as soon as possible. The earlier an employee returns to work, the less claim is needed. This will help in lowering insurance premiums. 

More on How to Save Money on Workers’ Comp Insurance

1. Assess workplace risk. Take time to go around the workplace and identify areas prone to accidents. Check with your local safety council to help point out hazards. Fix the problem areas immediately. This will help when your premium is calculated. A safe work environment minimizes the risk of accidents and injuries. 
2. Do equipment safety training. If you have operators that use machines and heavy equipment, give them the proper training on the usage and safety protocols. Ensure that only employees with the right skills and training can operate these machines. 
3. Do pre-employment drug testing and background checks. Establish rules and disciplinary actions for substance abuse. Make the rules clear at the beginning of the hiring process. Drugs and alcohol use can often lead to workplace injuries and illnesses. 
4. Make sure that employee classifications are in order. Define each position properly and ensure the worker sticks to the assigned job. For example, a secretary should not be allowed to carry heavy boxes or operate a machine to avoid accidents. 
5. Shop for insurance quotes. There may be some private insurers who can give you a better rate than state-run agencies. Independent insurers can give you more choices that you can select from. 

Benefits of Work Insurance

Both employers and employees benefit from workers’ compensation insurance. Employees will be protected if an accident occurs in the workplace. They will be assured of medical assistance, rehabilitation and therapy. They can also claim benefits for lost wages, and their families will be comforted with the available death benefits in case of death.  Employers, on the other hand, can save from financial burdens if their employees are injured. They will also be protected from suits if a worker decides to sue for their injuries. 

If you are looking for an insurance agent to help you with your work insurance needs, check out Advantage Insurance Solutions (AIS) here in Denver, CO. You can email info@teamais.net.