Workers’ compensation insurance is essential for business owners with more than one employee. Workers’ compensation is required in almost every state. It also protects you from paying out-of-pocket for medical expenses and lost wages.
In the following article, find out how workers’ compensation insurance covers you and your employees.
What Are The Different Types Of Workers’ Compensation Benefits?
Workers’ compensation insurance provides financial protection for your employees in a work-related accident. The policy offers a variety of coverages to employees, as each condition is different and requires ongoing care, treatment, and recovery time.
However, workers’ compensation policies provide four basic coverages: medical, rehabilitation, disability, and death benefits.
Benefits of medical care
Your workers’ compensation policy includes coverage that pays for medical expenses incurred by injured workers following an accident. Your employees must be injured or become ill due to an accident on your premises.
Your employee may be eligible for benefits if injured during work, such as driving a car or visiting a customer’s house.
Your workers’ compensation policy usually pays 100% for injuries sustained by workers.
- Ambulance charges
- Bills for emergency room visits
- If medically required, surgery
- Prescription medication prices
- Certain diagnostic tests
- Hospitalization fees
- Doctor visits
Some states may require employees to select from a list of approved doctors. Policies can change depending on where you live and your insurance company. You must read and understand your policy to ensure that you are fully aware of any exclusions.
Rehabilitation benefits
Your employee may require ongoing medical treatment or physical therapy, depending on the nature of their injury. Your workers’ compensation policy usually covers these costs. This policy also covers any treatment that helps employees regain their skills and return to work.
Often, an employee may not be able to return to the same job after an accident.
Some states offer vocational rehabilitation, which allows your employee to learn the skills needed to obtain a new job. If your policy covers tuition or other training costs, it may cover the cost of an employee’s search for a new job.
Disability benefits
After a mishap, your workers might have to leave work temporarily or permanently. Workers’ compensation covers a portion of employees who cannot work due to injury or illness. There are two kinds of disability benefits: permanent and temporary.
Temporary Injury Benefits
There are two types of temporary injury benefits. Temporary total disability (or the first) pays for a portion of your employee’s wages if they cannot work for a short time. Take, for example, a knee injury your employee sustains on the job.
They will need to undergo surgery and be away from work for six weeks. They would be paid an untaxed portion for the six weeks.
Permanent Injury Benefits
Permanent injury benefits are the same as temporary ones but fall under two categories: total and partial. If your employee is permanently disabled from their job due to a permanent injury, you can apply for partial disability coverage.
Let’s take, for example, a worker who used to transport pallets by hand but now can only lift them using a forklift because of a permanent back injury. Permanent partial disability is a way to make up the difference in their wages and hours.
While permanent total disability benefits vary from state to state, they generally pay for a portion of pre-injury wages in cases where an employee cannot return to work after an injury.
Death benefits
Your workers’ compensation policy will pay a portion of the wages and funeral expenses for your employee who dies from a work-related accident. While financial benefits can vary from state to state, most states offer a weekly or lump sum payment to eligible dependents upon an employee’s death.
Your employee’s family could still be eligible for benefits if an occupational hazard causes their death sooner or later than expected.
Conclusion
Workers’ compensation insurance can be complicated.
You must have employees who meet specific criteria to receive benefits under your policy.
You also need to follow state laws regarding employers. Determining which insurance company provides the best coverage for your business can also be challenging. But, with professional guidance, this can be made simple.