What is Workers’ Compensation?
Learn more about workers’ compensation, a form of insurance that provides for financial compensation and medical benefits for employees if injured at work.
Workers’ compensation (familiarly referred to as “workers’ comp”) protects workers and their families from work-related expenses from injuries and diseases occurring within the workplace. This protection is very valuable in the case of a long-term or lifetime disability, and even applies if the employee is at fault or dies as a result of employment. In other words, it is a no-fault system. Also, a death benefit could be available to the family if the employee dies while working.
In exchange for receiving payments under this program which pays your expenses as you incur them, you are giving up your right to sue in a civil court. This means that you cannot collect money for an employer’s negligence, for your pain and suffering, or for punitive damages even in the case of a long-term disability. To take such a claim into the civil court system, you would have to give up using the workers’ comp program. This could delay payment of your benefits since the civil courts across the United States are so backed up. It might even be years before a settlement is reached.
Although the system may not work perfectly in each instance, the purpose of the law is to shield workers and their families against many work-related financial calamities. In addition, it prevents employers and their companies from going out of business from expensive lawsuits because of these types of claims.
Filing a workers’ comp claim does not involve suing the employer. It is much more like submitting a claim to an insurance company and asking for owed benefits. Each state has a workers’ compensation agency which manages their program, similar to that offered by an insurance company. Each employer in the state pays fees (premiums) to the state or to an insurance company that administers workers’ compensation, which then provides workers’ compensation coverage throughout the year. If a worker is injured on the job and files a claim, the state agency reviews it and determines whether or not the claim is valid and covered under the law. If approved, a certain amount will be paid out (benefits) to the worker to help cover their lost wages and medical costs. Other classifications of workers, such as federal employees, longshoremen, maritime workers, and railroad workers, have their own systems of workers’ protection.
Workers’ compensation laws are not designed to replace every dollar you earn if you suddenly find yourself injured or hospitalized and off the job because of workplace conditions. The laws are intended to be a safety net which provides a resource that will partially cover your regular income and medical expenses instead of having to sue for compensation. Each state has determined what percentage of income you will receive and there is often a cap on the weekly amount they pay.
Workers’ compensation programs do vary from state to state, but here are the types of benefits that they can provide if you’re injured, disabled, or killed on the job:
- Partial wage replacement
- Payment for medical costs
- Payment for expenses associated with the injury or illness
- Payment for future expenses caused by the injury or illness
- Death benefit
Filing a claim does not automatically guarantee benefits. You must apply for payments and follow specific rules and time frames, after which each case is reviewed and either approved or denied.
Although some workers have filed false claims to cheat the system, these are exceptions. Generally, workers who use workers’ comp are truly in need and have a valid claim. Filing a false claim is considered insurance fraud.
It is imperative that you or a loved one who is injured or who suffers from a disease associated with their workplace understands their responsibilities in filing the proper forms, following instructions and meeting the deadlines for approval of claims and payment of benefits.