6 Key Facts About Workers Comp Insurance

Workers compensation is a system in the United States and many other countries that provides benefits to injured employees or those who contract an illness at work. State or federal governments offer workers comp benefits as part of social welfare programs to ensure staff can return to work promptly and safely. 

If you’re unfamiliar with workers’ comp, here are a few key facts every employee and employer should know.

A Third Party Entity Handles Medications

Each workplace will have a third-party intermediary between workers and insurance agencies that handles prescription costs. These pharmacy benefit managers, or PBMs, are in charge of handling medications. In addition, the top PBMs provide data and expertise that help a workplace make informed decisions. 

PBMs also help negotiate rebates and drug costs, which makes it easier for employers to get medications to workers. In addition, a PBM’s ability to negotiate helps decrease drug costs, allowing employers and staff more streamlined access to necessary medications.

Workers Compensation is Often Mandatory

In most states, workers compensation insurance is mandatory for employers, meaning businesses must provide their staff coverage. There are caveats in some situations, though. For example, in states such as New Jersey, employers only have to provide coverage if there’s no federal program in place.

Certain exceptions to this rule include sole proprietorships and partnerships. Some states require all businesses to offer workers comp, while others exclude those with no staff. However, in any state, a business owner who has employees will need to have workers comp insurance.  

There Are Four Types of Workers Compensation Benefits

Workers who file a workers’ compensation claim can access four types of benefits.

• Medical benefits
• Income reimbursement
• Death benefits
• Job retraining assistance

Medical benefits cover the cost of necessary medical treatment resulting from a workplace injury or illness. Income benefits will replace a portion of lost wages, while death benefits will go to surviving dependents if someone dies due to a workplace injury. 

Finally, job retraining will help train employees who need new assignments or duties upon their return to work. Retraining benefits are particularly helpful if an employee is no longer able to do their original duties as a result of their injuries.

Benefit Amounts Vary by State

Workers are entitled to certain benefits, such as payment for medical expenses or lost wages, regardless of who was at fault for the injury or illness. However, the benefits an employee receives from workers’ compensation are usually based on their salary and the severity of their injury or illness. 

Many states may have strict qualifications for receiving workers compensation benefits. Some even limit the types of benefits available. Therefore, workers must familiarize themselves with all relevant laws and policies to fully understand what kind of benefits they may be entitled to.

You Have a Time Limit for Filing

In most cases, employees must report their injury or illness to their employer within a specific time frame in order to be eligible for workers compensation benefits. The statute of limitations varies between states.

Typically, an employee will have two years to file a claim. However, you’ll need to alert your employer to the injury within a month of the event. If you notify your employer after that, your benefits could be affected. 

You Can’t Sue if You’re Covered by Workers Compensation

Employees who are covered by workers compensation cannot sue their employer for damages resulting from a work-related injury or illness. The benefit of not suing is that you don’t have to deal with a lawsuit. However, in some cases, an employee’s injuries could warrant a lawsuit.

A lawsuit will allow you to seek punitive damages, which are common when the employer is at fault for an illness or injury. In addition, lawsuits can include damages for pain and suffering, which you won’t get with a worker’s comp claim. Before filing a workers comp claim, consider speaking to a lawyer to make sure it’s the best choice.

Final Thoughts on Workers’ Compensation

Workers compensation is an important system that provides vital protections and benefits for employees who are injured or become ill as a result of their job duties. By understanding all rights and responsibilities under workers compensation laws, you can ensure that you receive the full extent of the benefits you are entitled to if you ever need to file a claim.