Workers’ Compensation

What Is Workers’ Compensation?

Workers’ compensation is a form of business insurance. It provides benefits to employees who become injured or ill on the job. Workers’ compensation helps pay for:

• Medical care

• Lost wages due to missing work while injured or ill

• Vocational rehabilitation, if needed

• Death benefits, if a work-related incident proves fatal

Workers’ compensation is designed to protect the interests of both employers and employees. Generally, employees who receive these benefits give up their right to sue the employer, though there are exceptions.

Who Administers Workers' Compensation Programs?

Each state administers its own workers’ compensation program. The state determines such things as:

• Premium rates

• Benefit amounts

• Whether coverage is sold by state agencies or private insurers

State workers’ compensation programs cover most employees who work for a privately owned company or for state or local government. Laws vary by state, so it’s essential to check the rules and requirements in each state where your employees work. You can find links to each state’s workers’ compensation office here.

Federal workers and certain other employees are covered by workers’ compensation programs administered by the U.S. Department of Labor.

Who Is Required to Carry Workers’ Compensation Insurance?

Most states require all employers to provide workers’ compensation coverage to their employees. But each state has exceptions for certain types of businesses and certain workers, so, again, it’s important to check local laws. 

How Much Does Workers’ Compensation Insurance Cost?

Employers must pay the premiums for workers’ compensation coverage. There is no standard cost; the premium rates depend on several factors, including:

• State laws

• How much risk your employees face in their work

• The size of your business

• The amount of your payroll

• The number of previous claims you have filed

In states where private insurance companies offer workers’ compensation coverage, it often pays to shop around for the best rates.

How Do You File a Workers’ Compensation Claim?

If an employee is injured on the job or gets sick as a direct result of their work, they must promptly notify their employer. The employer should first make sure the employee gets any urgent medical attention they need. In most states, the employee is required to see a healthcare provider of the employer’s choosing. 

The employee must fill out a workers’ compensation claim form with details of the incident. The employer submits the claim to their insurance company. If approved, benefits will be provided to the employee. Employees have the right to appeal a denied workers’ compensation claim or dispute the amount of their benefits. 

Claims should be filed as soon as possible. Deadlines vary according to state law. For example, employers in New York have only 10 days to file a claim after an accident.