Workers’ compensation provides financial assistance to employees who experience on-the-job injuries due to accidents or negligence.
There are different ways that these employers pay for this insurance against workplace injuries. These include direct payments and the use of state-run and private insurance companies.
Understanding workers’ compensation and the payment process will help you determine where your benefits are coming from.
Workers’ Compensation
Employees can be eligible to make a workers’ compensation claim when they experience an injury while on the job or performing in any work-related capacity.
Claims managers and insurance adjusters are typically assigned to help process the claim and provide information and guidance to employees. The amount of disability and medical compensation granted will depend on several factors.
The formula used to determine total compensation varies from state to state. In some cases, an employer may be self-insured and retains full responsibility for providing compensation to injured employees.
Workers’ Compensation Paid by Private Companies
Workers’ compensation is a form of insurance. Employers are often required to have a workers’ compensation policy in place. But in some locations, businesses may be exempt due to their type, size, and other factors.
Those businesses that aren’t exempt must purchase some form of workers’ compensation insurance to benefit employees.
A self-insurance fund can be set up to cover any medical care costs or lost wages that can result from workplace injuries.
Self-insured companies must demonstrate an ability to cover these costs by having the assets in place to protect all employees. Third-party insurance administrators can be used to help process the claims made under a self-insured employer.
Administrators assist with the management of claims and the paperwork that must be processed to provide compensation to employees.
Compensation funds are sent to the administrator by the employer. These funds are then distributed to the employee, making a workers’ compensation claim.
State-Run and Private Insurance
Employers also use State-run and private insurance programs. But private companies still pay for workers’ compensation benefits.
The state-run programs work in the same way that insurance companies do. Employers pay premiums for this service, which is ultimately used to cover the costs of distributed benefits to employees.
Similarly, private insurance companies provide workers’ compensation for businesses of all types and sizes. These providers send payments to injured workers on the employer’s behalf.
The use of private insurance companies for workers’ compensation may be restricted depending on your location.
How the Payment Process Works
Benefits can be provided in one single payment or distributed over several payments. Local laws and other factors will determine the exact methods used.
Also, the responsibility of the employer may be limited to a specific period. Employees must understand the details of the workers’ compensation benefits and the state laws regulating them.
Doctors must complete preliminary reports and submit copies to the local District Office, the employer, the insurance provider, and the employee. The employer must also report the injury to the insurance company.
Employees receive a written statement detailing their legal rights as they pertain to workers’ compensation claims. Some insurance providers require the use of a specific network of medical practitioners to help process these claims.
Payments are then made to the employee once all of the preliminary paperwork and processes have been completed. Any changes to the payments made must be reported to all parties.
Workers’ compensation benefits are paid by private companies who utilize different options for providing these benefits to their employees. Self-insured, private, and state-run programs help injured workers receive the benefits they deserve.
In all cases, workers’ compensation payments resulting from the premiums paid by employers or the appropriated assets to cover any potential workplace injury costs. These benefits ensure that workers have the protection they need to achieve long-term health and productivity for years to come.
Workers Compensation Law can be complicated and often requires legal assistance. At Mark Thomas Law, we specialize in workers’ compensation and stay abreast of the evolving complexities. Contact our office today at 404-999-2358 for your free consultation.
