- 1 Workers compensation insurance
- 2 Workplace accidents and the facts insurance companies follow
- 3 Injuries Covered in Workplace Accident Insurance:
- 4 Who Is Insured?
- 5 What Benefits Injured Workers receive?
- 6 Expenses covered by workplace injury insurance include:
- 7 Insurance premium:
- 8 Factors That Affect Insurance Premiums:
- 9 Final Words
Workers compensation insurance
How much safe I am while at my workplace? Who will take care of me and my family if I am injured while working? What conditions do I need to follow to be covered if I have Workers compensation insurance?
Workplace accidents and the facts insurance companies follow
Death at a workplace, due to injury or illness, can cause severe hardship to your workers, their families and your small business or large as well. For the reason, employers are legally obligated to take reasonable care of the employees. Nevertheless, accidents happen and when they do, workplace accident insurance provides coverage. It serves two purposes:
- Injured workers get medical care & compensation for a portion of income they lose due to accident injuries.
- Assured benefits regardless of who is (was) at fault in the accident.
As an employer, it is your duty to provide the workplace accident insurance policy for employees as even the small accidents can cause great damage to your revenue and the works’ financial situations. It may include the long-term inability for a staff member to work and enormous medical costs.
Injuries Covered in Workplace Accident Insurance:
Injuries sustained while at the workplace premise or anywhere else for official purposes are covered under the employee insurance. For insurance, if an employee is in a vehicle for work purpose, whether the trip made in the personal or official vehicle, is covered under the worker accident insurance. Employees are also covered while working from home, as long as the injury arises out of or in the course of employment. Accidents driving to and from work are not covered.
Workplace injuries due to accidents can sometimes include those resulting from “horseplay” or when the employees may be disregarding workplace safety rules.
Injuries taking place during lunch breaks or tea breaks are considered work-related, whether they happen at company cafeteria or employer-owned grounds. Additionally, injury may be considered work-related if alcohol served by the permission of employer at a work-sponsored event.
There are different types of injuries covered under worker accident insurance. Some of them include:
- Death from an injury or disease
- Physical injuries such as lacerations, back strain, fractures, burns
- Over a period of time injuries such as deafness or any other disorder
- Psychological or psychiatric injuries, for example, stress, anxiety disorders
- Occupational diseases brought on or caused by exposure in the workplace.
- Asbestosis, mesothelioma aggravation of a pre-existing condition or may other latent onset injuries.
Who Is Insured?
All employers in most states are required to insure employees, but only workers properly classified as employees are covered under the insurance policies. Depending on your state, certain types of workers may not be covered by the insurance.
Some of the categories covered by work injury insurance include:
- Salaried employees (except for security professionals, police, and prison guards).
- Workers undergoing vocation rehabilitation or vocation training.
- Self-employed workers (Only registered with the National Insurance Institute).
- People who are in training according to Emergency Labor Service Law.
- People whose salaries are determined by law.
Depending on your state, certain categories of workers may not be covered by the workplace insurance policy. Some examples are listed below:
- Undocumented workers
- Agricultural workers
- Domestic workers (housekeepers, nannies, babysitters)
- Seasonal workers
What Benefits Injured Workers receive?
Workplace compensation insurance benefits are based on whether the disability is partial or total, temporary or permanent.
Note: Impairment is defined as a reduction in earnings capacity.
Across the United States of America, most states require that the benefits of workplace disability be paid for the duration of the disability, while some states have defines a maximum number of weeks, particularly for temporary disabilities. Employees get a percentage of the worker’s weekly wage.
The insurance plans are designed to cover injuries that result from carelessness of employees or employers. States may impose the alcohol and drug testing on the injured employee. The benefit can be denied if found under the influence (but benefits are given if the alcohol was provided by employers).
Expenses covered by workplace injury insurance include:
Worker compensation plans offer a managed medical care plan. While the medical care plans differ according to the different states, but most include one or more of the following features:
- Utilization Management – A process designed to ensure the medical care is necessary, appropriate and cost effective. Obtaining preapproval is required for medical procedures that include UR.
- Provider Network – A list of healthcare institutions and individuals who have contracted with the insurance company to provide medical care at a discount.
- Pharmacy Benefit Manager – Prescription drug program manager who is responsible to control costs. The professional would contact the pharmacies and drug manufacturers to obtain discounts.
It may be classified into four categories that include:
- Temporary Partial – A partially disabled worker due to injury at workplace. For example, a worker breaks his (or her) leg on the job. Part-time job or lower-level jobs are offered till the broken leg is healed.
- Temporary Total – A completely disabled worker who is unable to work at all. Short-term disabilities are covered under the ‘temporary total’ category for example a worker who with injured back and is unable to perform any work for six weeks. After the six weeks, the employee would return to full duties after the disability period.
- Permanent Partial – Unable to earn include due to permanent injury after an accident at work. This may include injuries such as hearing loss.
- Permanent Total – Unable to earn future income due to injury at a workplace. The injury may be by performing the type of work he or she was doing when the injury occurred.
In case a worker dies at work or while at official trip or working from home, the surviving dependents as defined by law (spouse and/or minor children) are entitled to cash benefits. The compensation is equal to two-thirds of the employee’s average weekly wage for the year before the death. Along with it, the Workers compensation insurance policy also covers funeral cost. However, the conditions may vary among states as each state has its own provisions and variations. Death benefits may be paid to:
- Minor child
- Surviving spouse
- Dependent grandchild
- Non-dependent parents (when there’s no surviving dependent available).
- Child, less than 25 years old, who is enrolled in the educational institution.
Employee compensation insurance can help:
- Provide financial support for the deceased’s family.
- Cover funeral and burial expenses.
Note: For death benefits, an employee must have died from the mentioned compensable work injury or illness.
In many states, there are various conditions applied for the dependents to receive cash benefits after the death of an employee. Here are some things to keep in mind:
- The children must be born in wedlock or the surviving parent must have been legally married to the deceased.
- Legal dependents usually get priority when parsing out benefits.
- In case there are no eligible dependents available, many states require the benefits to go to the deceased’s estate.
Premiums for workplace accident insurance are set by insurance providers on the basis of the employer’s industry classification code and payroll. The dangerous is your industry, the higher the premiums will be. For example, if you are in trash hauling or logging industry premiums may be much higher than premiums for an accounting firm.
Another factor that matters when setting premiums is the location. Since the terrorist attack took place on September 11, 2001, insurance companies have started considering the exposures to catastrophe, both natural and man-made, when deciding the premiums for works insurance. For example, if your business is located in an area of high-risk of catastrophe, you are likely to pay more premiums, regardless of the nature of the business itself.
If you fall in the category of ‘employer with an annual premium above a certain amount,’ you are eligible for experience rating. This helps adjust the premium depending on the claims history of the company relative to other companies. It is for sure that the businesses with a higher than average claim will pay more premium than those with lower claims.
Factors That Affect Insurance Premiums:
Premiums for worker accident insurance vary among the states. For example, the states with more generous benefits are likely to have greater premiums. In most states, insurance benefits continue even after the employees begin to collect Medicare and Social Security.
It is good to keep in mind that the benefits are only a part of the equation. There are many states where premiums may be higher even for low benefits due to the inefficiency of the system for awarding benefits. In many states employees can visit as many physicians and specialists as they like and there’s no restriction or requirement for doctors to prescribe generic rather than brand-name drugs.
Each state has its own defined Workers compensation insurance laws. It is mandatory to research the terms and conditions of the law in your particular state in order to get a better idea of how the insurance process works. As per the law, the main employer or contractor is liable to pay compensation to employees in case of any unfortunate happening at the workplace or while the employee is on official duty.
Compensation depends on the nature of injury. With the employee compensation insurance policy, it is easier for the employers to secure itself from the legal liability and from getting bankrupt as paying cash benefits to dependents of a deceased employee can make a big hole in your pocket.