Disability Insurance Articles

Protecting Your Employees With Workers Comp

2010-05-24

Workers Compensation is an insurance program designed to pay workers during their recovery from a job related injury or illness. The program came about because in the early industrial age, many workers were injured on the job and when they were, it was up to them to sue or negotiate with their employers for the money they needed to cover medical expenses and lost wages. Very often they lost their suit but incurred legal expenses in the process. Employers also found the litigation process costly. If they lost, they could wind up paying a great deal of money to the worker. Today, the specifics of workers compensation programs are determined and administered at the state level, with details unique to each state. Affordable disability insurance can also be purchased from commercial insurers. Most employers are required by state law to have workers compensation insurance but certain types of employees, and the self-employed, are not covered by state workers compensation insurance.

Eligible workers who make a claim receive compensation at a fixed rate. The rate is lower than their actual wage amount but workers compensation wages are tax-free. The rate is fixed because the program is designed so that workers give up their right to sue their employers in exchange for this guaranty. This is advantageous to workers because it ensures they don't have to incur legal expenses to get the money they need while they're recovering. It's advantageous to the employer because it caps their potential liability. Since the employer or insurance company can dispute claims, it's important that workers file immediately upon being injured. Workers must also get an independent medical examination to verify the extent of their injury. If a worker is still unhappy with their compensation package, they can appeal to the state workers compensation board.

Most workers compensation insurance programs pay for medical expenses, a large portion of earnings lost and, in the case of a worker who cannot return to work, future lost earnings. The employer may provide training or a new type of job or physical therapy as well. If a worker is killed on the job, survivors generally get the lost wage pay and the funeral costs are paid. When a worker is injured but expected to recover and return to work, their medical expenses are paid immediately. They then receive pay for three to seven days of work missed.

The self-employed and some categories of workers are not eligible for workers compensation. They can purchase their own affordable disability insurance to cover them for a job related injury. The terms of their coverage will vary with the provisions of their policy