Workers' Compensation

Workers' compensation is a state-mandated insurance plan that covers employees who've suffered injury or illness in the course of employment. Workers' compensation insurance is often referred to as "workers comp".

Workers' Compensation Benefits

Generally, most U.S. employees who've become injured or ill in the course of employment are eligible for workers' compensation benefits. The benefits vary by state as do the laws, but typically include the following basics.

• Payment of related medical expenses
• Job retraining if needed (e.g., vocational rehabilitation)
• Partial wage replacement free of income taxes if unable to work due to disability

Surviving dependants of eligible employees who died in the course of employment might also be eligible for workers' compensation benefits, typically including burial allowances.

For workers' compensation benefits, disabilities are typically classified as temporary or permanent and partial or total. For example, permanent total disability (PTD) typically means that a worker has a disability that will keep him or her from working forever; permanent partial disability (PPD) typically means that a worker can work in some capacity, once a doctor releases him or her for work.

Most workers' compensation insurance plans pay disabled workers at a rate of only two-thirds of gross weekly wages. (In a few states, the plans also pay dependent allowances.) But, without the burden of income taxes, workers' compensation might amount to about the same net wages employees earn after paying income taxes when working.

However, many states cap the maximum amount employees may receive in weekly workers' compensation and for how many weeks.

If you receive an offer of a lump-sum workers' compensation settlement, before accepting it's a good idea to consult your doctor, to insure that you won't be requiring further medical treatment. Because it's an insurance adjuster's job to negotiate the least amount, it might also be a good idea to hire an attorney who is skilled at negotiating workers' compensation settlements.

Examples of employees who are exempt from state workers' compensation insurance benefits are listed below.

• Federal, and longshore and harbor employees. However, such employees are covered by Federal workers' compensation programs. (More information is on the next page.)
• Certain agricultural and domestic employees are exempt from workers' compensation benefits in some states, or receive only limited coverage or have different eligibility requirements than other types of employees.
• A few states exempt employees who work for organizations that employ fewer than a specified minimum number of employees.

Your state might have different or additional exemptions. Where employees are not eligible for workers' compensation benefits because of state exemptions, affected employees typically must sue their employers to collect equivalent benefits. Consult an attorney about filing such a lawsuit.

To be eligible for workers' compensation benefits, the injury, illness or death must have occurred in the course of employment. For example, a worker who is injured in an auto accident while driving home from work in the worker's own car likely won't be covered; but, a worker who is injured in an auto accident while making deliveries in a company-owned vehicle is likely to be covered. In the latter case, the company's auto insurance coverage might offset workers' compensation coverage or vice versa.

"In the course of employment" might extend beyond performing job duties; for example, in some states it extends to employment-related functions such as company-sponsored parties, picnics and training.

Willful, self-inflicted injuries or deaths are typically not covered under workers' compensation insurance. Neither are injuries nor deaths caused by willful misconduct on the job, such as substance abuse. A few states specifically cover injuries or deaths caused by violent behavior of other workers, but it's a matter of interpretation in other states.

An injury, illness or death doesn't have to be the result of a sudden accident to be covered. For example, if a worker's job requires repetitive motion that causes a physical disability over time, it's likely to be covered. Pre-existing medical conditions that are aggravated by job duties might be covered too. So might mental conditions, such as job-related stress.

When seeking medical attention and filing a claim for workers' compensation insurance benefits, be sure to follow your employer's or the insurance carrier's instructions to the letter. It's not uncommon for employers or their carriers to look for any excuse to deny claims for benefits, because such claims cost them.

However, if your employer or its insurance carrier does deny you benefits, you have the right to appeal or sue. More about appealing or suing is on the next page.

If your employer or its insurance carrier doesn't provide the claim forms, then request the forms by contacting the workers' compensation agency in the state where you work.

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