Did you know that almost every state requires employers to carry employee workers’ compensation insurance? Workers’ compensation benefits provide financial benefits such as lost wages and medical care to employers who experienced a work-related injury or illness. We’ll explain the four types of workers’ compensation benefits and how they work.
Workers’ Compensation Benefits: The Four Categories
The four benefits that workers’ compensation insurance falls under include the following:
Medical Benefits and How They Work
The workers’ compensation process takes several steps. An employee has to report a work-related injury or illness. You’re responsible for filing the workers’ compensation claim as a small business owner. Your insurance company will cover your employee’s medical expenses once there is an approved claim. The medical costs might include the following:
- Doctor’s visits
- Physical therapy
- Crutches, wheelchairs, or other equipment
- Hospital and emergency room care and surgeries
Your employee won’t have to deal with deductibles, co-pays, or overall financial limits with workers’ comp insurance. However, some states limit coverage of medical bills based on authorized treatments. For example, an insurer may only approve a specific amount of physical therapy treatments.
Knowing that an injured worker can reach maximum medical improvement (MMI) is also critical. For example, an injured employee might have to cope with walking with a limp after undergoing many medical procedures and a lot of physical therapy. At this point, additional treatment won’t make the injury any better. Time limits on benefits might apply, an employee may receive an impairment or disability rating, you might have to define ongoing work restrictions, and a workers’ comp settlement often begins.
What to Know About Disability Benefits
If an injured team member can’t work, disability benefits can recoup part of their wages lost from their injury. The amount of wage replacement typically depends on the employee’s earning capacity, the disability type, and state mandates. Most likely, the figure depends on the employee’s weekly pay before becoming injured. In most states, this will be two-thirds of the employee’s average weekly wages, and employees have a waiting period before receiving benefits (typically three to seven days).
Disability benefits can replace some of an employee’s lost income while they recover or seek medical treatment until they return to work (short-term disability). This workers’ compensation benefit could also be permanent if an employee can no longer work (long-term disability). Also, typically workers’ comp benefits are not taxable unless the injured employee is receiving another means of financial support.
What are Rehabilitation Benefits?
Rehabilitation benefits support injured employers with permanent disabilities who cannot return to their former job. The benefit usually covers costs such as the following:
- Job training
- Resume assistance
- Books and other expenses
- Skills assessment and testing
- Job development and placement
These benefits will cover the cost of retraining an employee to learn new skills or acquire certifications necessary to resume work at a job that pays comparable to their previous earnings. Most states require these benefits, including up to two years of vocational training or education.
Death Benefits Explained
Death benefits, or survivor’s benefits, are similar to life insurance. Unfortunately, suppose an employee passes away from a work-related injury. In that case, workers’ comp benefits the employee’s dependents, like a spouse, minor children, or their elderly parents living at their house.
Death benefits cover burial costs and funeral expenses and might be able to replace a lost income. Death benefits come in installments or a lump sum depending on the state. Death benefits might also be payable years after an injury. An example is if a doctor diagnoses an employee with terminal cancer after exposure to a toxic chemical.
Partner with Malden Solutions Today
Malden Solutions has a wealth of expertise in providing employer insurance solutions, HR solutions, and individual insurance solutions to businesses both big and small. Our team of seasoned professionals can help you navigate the rapidly-changing world of insurance with ease. We partner with businesses and individuals throughout the country to provide our dedicated services for employee benefits but also work within our surrounding communities in Maryland, Northern Virginia, and Washington, D.C. Contact us today to learn more about how we can provide effective, dynamic solutions for your business. Stay connected with us on Twitter, Facebook, and Linkedin.