Risks and hazards are always present in every workplace. Regardless of the business industry, work-related risks and hazards are always there. To ensure employee protection, the government requires business owners to carry a workers comp program. The U.S. Department of Labor has established the workers’ compensation program. This program aims to prevent job-related injuries and illnesses. Workers’ compensation insurance provides multiple benefits to employees who sustain job-related injuries or illnesses.
Benefits of Workers Comp Insurance
Workers’ compensation coverage is beneficial to businesses, whether big or small. Work comp insurance provides multiple benefits to employees and employers as well.
- Workers’ compensation provides medical coverage to employees. It covers medical expenses associated with work-related injuries or sickness.
- Employees who sustain severe injuries or illnesses may require long-term treatments. Workers’ compensation insurance policy supports the ongoing medical care of these employees.
- Workers’ compensation coverage provides income replacement. Workman’s compensation insurance compensates employee’s lost wages in case an employee suffers from a temporary disability.
- Permanent disability prevents employees from performing any type of work. Workers comp insurance coverage provides benefits for employees who sustained a permanent disability.
- Part of workers’ comp benefits is supplemental job displacement. After an injury or illness, employees may not be able to return to their old job. Supplemental job displacement provides financial support for injured employees. This helps employees to undergo skill enhancement or vocational training. This will help them learn new skills or knowledge to help them secure a new job.
- Workers’ compensation insurance provides burial benefits. It pays for a portion of the burial expenses of employees who died due to work-related accidents or illnesses.
- In case of job-related death, workers comp provides death benefits to employee’s beneficiaries.
- Workers’ compensation enables employers to provide financial and medical support to their employees. Workers comp serves as a display of employer’s care for their employees. This can result in employee dedication and productivity.
- All states except Texas require business owners to carry workers comp insurance. Employers must provide coverage to employees in compliance with state laws. It safeguards businesses from state fines and penalties.
- Workman’s compensation insurance protects business owners from possible liabilities of occupational injuries or illnesses.
- Employers can save more money in getting workers comp coverage for their employees. Paying workers comp premiums are cheaper than paying for medical treatments, lost wages, or death benefits.
- As work comp premiums are based on employee’s salaries, it helps in systematic bookkeeping. Proper bookkeeping is essential not only in computing workers comp but also in financial expenses and taxes.
- Workman’s compensation insurance policy gives peace of mind to business owners as it protects employees and the business itself.
How does Workers’ Comp Policy Works?
Workers comp insurance policy works as a shield from workplace injuries and illnesses. It provides protection and support to employees and employers. It provides the following coverage for employees and employers.
- Medical Coverage
- Income Replacement Coverage
- Disability Benefits
- Funeral Expenses Coverage
- Death Coverage
- Liability Coverage
Workman’s Compensation Medical Coverage
Workers’ compensation’s basic benefit is the provision of medical treatment coverage. The insurance provider pays for the medical treatment of employees who suffered from work-related injuries or illnesses.
Covered Medical Treatments:
- Hospital Stay
- Emergency Room Visits
- Doctor’s Appointment
- Surgical Procedures
- Medicine Prescriptions
work comp provides support to employees who suffered severe injuries or illnesses needing continuous treatment. It covers ongoing medical treatments to help employees recover and get back to work.
Covered Ongoing Medical Care:
- Physical Therapy and Rehabilitation
- Continuing Medication
- Recovery Equipment
Income Replacement Coverage
Workers’ compensation coverage offers different compensation benefits. Compensation benefits depend on the severity of the employee’s injury or illness. Workman’s compensation insurance has four categories of disabilities qualified for compensation.
Temporary Partial Disability
Employees may suffer from minor work-related injuries or illnesses. This might cause employees to return to work but be incapable of earning as much as before the injury.
Temporary Total Disability
In some cases, employees suffer from severe work-related injuries or illnesses preventing them from going back to work at a certain period. Employees may receive temporary disability benefits while they are in recovery.
Qualified Temporary Total Disabilities:
- Employees who sustained job-related injury or illness that undergone surgery
- Employees who sustained job-related injury or illness that require therapy
Permanent Partial Disability
Permanent partial disability happens when employees sustain an injury in one part of their body that did not resolve.
Qualified Permanent Partial Disabilities:
- Permanent knee injury
- Amputation of a body part like the hand or finger
- Loss of vision of one eye
- Hearing loss
- Carpal tunnel syndrome
- Nerve damage
- Post Traumatic Stress Disorder
Permanent Total Disability
This type of disability usually removes a person’s capability to continue any type of work. Employees can qualify for permanent total disability if they suffer from the following injuries:
- Loss of both arms
- Loss of both hands
- Loss of both legs
- Loss of both feet
- Complete blindness
- Spinal cord injury with paralysis of both arms or legs
- Permanent brain or head injuries
- Second to third-degree burns affecting one-third of the body
Funeral and Burial Benefits
Part of the workers comp is to cover funeral and burial expenses in the event of occupational death.
This policy also provides death benefits to the bereaved family. A qualified beneficiary can be one of the following:
- Surviving spouse
- Dependent children under 18
- Parents or next of kin, if the insured is single and without minor children
Workers comp insurance does not only provide financial support to employees but also protection to employers. Insurance companies also provide financial support to business owners in case of lawsuits. work compensation insurance will pay for:
- Court Costs
- Attorney Fees
Computation of Non-medical Benefits
Compensation benefits vary according to state laws. In the state of Colorado, the calculation of benefits depends on the type of injury, recovery, and salary of employees. Under Colorado work comp law, temporary disability benefits start from the 4th day the employee stops reporting to work. An exception to the rule is temporary disabilities lasting more than 2 weeks. Here are the calculations of different disability benefits Colorado workers would likely receive in case of a work-related injury or illness.
Temporary Total Disability Benefits
Workers who qualified for temporary total disability benefits receive two-thirds of their average weekly wage. This type of disability benefit has a maximum limit and the current temporary total disability limit is $1,072 per week. The sick or injured employee will stop receiving the benefit in the event of:
- Returning to work, with either regular or light duty.
- Receiving doctor’s clearance to return to work, either with regular or modified work duties.
- Failure to attend doctor’s follow-up appointment.
- The employee reached the maximum medical improvement. This means the current medical condition has been stabilized. The injury will no longer improve despite further medical treatment.
Temporary Partial Disability Benefits
Employees who suffered from temporary partial disability are eligible to receive disability benefits. The benefits may amount to two-thirds of the deficit between the pre-injury average weekly wage and the current wage. This benefit has the same limits as temporary total disability benefits.
Permanent Partial Disability Benefits
Permanent partial disability benefits are calculated based on the scheduled loss awards. The scheduled loss will indicate how many weeks of compensation a worker will receive. The weekly compensation for scheduled injuries is fixed. All injuries and illnesses filed from July 2020 have a fixed weekly compensation of $337.11.
Permanent Total Disability Benefits
Permanent total disability benefits are computed based on the doctor’s impairment rating and age factor. A typical calculation of PTD compensation is by multiplying impairment rating to age factor then multiplying to 400 weeks. PTD benefits also have limits. For disabilities with an impairment rating of 25% and less, the limit is $99,094.93. For a rating above 25%, the cap limit is $198,187.35.
Funeral and Burial Benefits
The family of an employee who died from occupational illness or injury may receive up to $7,000 for funeral and burial expenses.
The death benefit is calculated the same as the TTD rate. The beneficiary will stop receiving the death benefit in the event of:
- Spouse remarriage
- Dependent children turn 18 years of age except for children with special needs.
Awards of Disfigurement
In some instances, workers may suffer from severe body disfigurement in areas exposed to the public. This makes them eligible to receive an additional award.
Lumpsum of Disability Benefits
Employees who suffered from permanent disability can opt for lump sum payment of disability benefits. The injured employee can request a lump sum payment of up to $10,000. However, it is important to take note that lump sum payment is subject to a 4% decrease a year.
Social Security Disability Benefits
Employees with temporary disabilities lasting more than 12 months can also receive Social Security Disability Insurance Benefits. Injured employees are only eligible to receive up to 80% of their average earnings. Employees who receive workman’s compensation insurance benefits will receive reduced social security benefits.
Revocation of Benefits
When it comes to workers’ compensation benefits, the State of Colorado follows a no-fault system. The no-fault rule covers any workplace injury or illness regardless of who is at fault. However, a no-fault system only applies to medical benefits. Income replacement and disability benefits may be reduced to half or worst terminated.
Reasons for Revocation of Benefits:
- The sustained injury resulted from the violation of company safety rules and regulations. If proven, lost wages and disability benefits may decrease to half.
- Misrepresentation of work experience and skills which resulted in injury. This may lead to termination of job and temporary disability benefits.
- The injury resulted from working under the influence of alcohol and prohibited drugs. This may result in a 50% reduction of non-medical benefits.
- Child support judgment
- The injury was due to a workplace fight among employees.
- The injury is self-inflicted.
When will I receive my benefits?
Medical coverage benefits begin as soon as the injury begins. However, temporary disability benefits require investigation and approval. Injured employees often receive the first payment of disability benefits after 21 days of the filing of workers’ compensation claims.
When Should I Get Workers Comp Insurance?
Nearly all American states require workers’ comp insurance coverage. Employers must provide workers’ comp insurance for their employees. Each state has varying state workers’ compensation laws. The state of Colorado requires all business owners to get workers comp regardless of the status and number of employees. Employers must provide coverage for full-time or part-time employees.
Failure to comply with state laws can result in penalties and fines. Employers who don’t carry workers comp insurance may be subjected to the following penalties and fines:
- $250 per day for the first offense
- Fines for repeat violators may range from $250-$500 per day
- An additional penalty of 25% of the employee’s benefits
- Closure of business
Who Offers Workmans Compensation Coverage?
Workers’ compensation coverage is available through a private insurance company or state fund. Some states are monopolistic like North Dakota, Ohio, Washington, and Wyoming. These states do not allow private insurance companies to provide workman’s compensation insurance.
Advantages of Private Insurance Providers
Workers compensation policies from private insurance companies provide the following benefits:
- Premium discounts and incentives
- Customized coverage
- Cross-state coverage
- Multiple options
The Best Workers Comp Insurance Providers
The National Association of Insurance Commissioners (NAIC) ranked the USA’s best workers compensation insurance providers. NAIC ranked these insurance companies based on their premium rate and market share.
- The Hartford
- Berkshire Hathaway GUARD
- Zurich Insurance
- AmTrust Financial
- Liberty Mutual Insurance
Cost of Workers Compensation Insurance
Workers comp insurance rates vary by state. Various factors affect the costs of workers’ compensation insurance premiums. It includes:
- State workers compensation law
- Business industry and associated risk factors
- Number of employees
- The company’s safety performance and history
- Payroll size
- Coverage Limits
- Claim History
Colorado’s workers’ compensation rates are considerably lower than other states. The average workers’ comp insurance premium is $0.95 per $100 earnings.
How to File Workers Comp Claim in Colorado?
Reporting and filing of workers’ comp claims may seem to be tiring and scary. Employees and employers must know the importance of timely and accurate reporting and filing of claims. Follow these steps to ensure employees and employers will get adequate protection and support in the event of an occupational injury or illness.
- Seek emergency medical care
Workers who sustained workplace injuries must be treated immediately by a health care provider. It is best to seek emergency medical care, especially for serious injuries. Injuries needing emergency medical care are the following:
- Chest pain
- Breathing problems
- Head injuries
- Eye injuries
- Deep cuts
- Broken bones
- Notify the employer about the incident.
Employees must inform employers about the injury verbally and in writing.
- Report the injury
Reporting of injuries is time-sensitive. Employees and employers must follow the required timeline for reporting and filing claims. This prevents the denial of workers’ compensation claims. Employees must report any work-related injuries in writing within four working days from the date of injury.
- Get medical treatment
Employers must provide injured employees with a list of authorized treating physicians within 7 days. The authorized treating physician will provide necessary medical treatment to the injured worker. They can also provide referrals to specialists if needed. Insurance providers only pay employee’s medical bills under the authorized treating physician.
- Gather evidence of accident and injuries
Proper documentation of occupational injuries is vital in filing workers’ compensation claims. It is important to secure evidence that will support your compensation claims. Important pieces of evidence to secure are:
- Picture of the workplace accident and injuries
- Witnesses testimonies
- Copy of video recordings from the CCTV cameras
- Attendance record
- Maintenance records of involved equipment and tools
- File a claim
It is the employer’s responsibility to report workers’ comp claims on behalf of the injured employee. Employers must report employee injuries to insurance providers within 10 days. Employers must submit the Employer’s First Report of Injury form if the employee is:
- Injured and not working for more than 3 days
- Sustained a permanent disability
- Developed work-related illness
- Wait for the insurance providers decision
Insurance companies must respond to employee’s claims within 20 days. The employee will receive an admission of liability letter from the insurance company after approval.
- In the event of denial of compensation claims, it is best to contact the claim’s adjuster of the insurance company. Ask if there’s a need for additional evidence to support your workers’ comp claims.
- If the employer failed to file the workers’ compensation claim, the employee can file itself through the Division of Workers’ Compensation.
Workplace injuries and illnesses pose significant risks to every business. Operating a business without workers’ compensation coverage can cause serious financial trouble. A single injury can shut down a business in an instant. work comp coverage will legally and financially protect your business.
Your Team AIS, can help business owners protect their business and workers against workplace risks and hazards. We partner with top workers’ compensation insurance companies to provide excellent and reasonably priced protection to business owners. Manage your business risks and get workers’ comp insurance now. Give us a call now!