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Updated Jan 09, 2024

Guide to the Workers’ Compensation Claim Process

Learn the steps employees must take to receive insurance benefits after a work-related illness or injury.

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Max Freedman, Senior Analyst & Expert on Business Operations
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Nearly all businesses with employees are required to have workers’ compensation insurance. Workers’ comp covers medical costs and loss of wages when employees are injured on the job or become ill because of their work. 

According to the National Council on Compensation Insurance, the average cost of workers’ compensation claims for work-related injuries and illnesses from 2020 to 2021 was $41,757. Without workers’ compensation insurance, your company would be stuck footing these high costs.

Editor‘s note: Looking for the right workers’ compensation insurance for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

Given the expense of medical care for work-related incidents, you and your HR staff should acquaint yourselves and all employees with the workers’ compensation claim process. Doing so will demystify the process while showing your employees that you care about their well-being.

Did You Know?Did you know
Workers' comp premiums are set based on your industry classification code and how much it costs to run payroll. That means companies in high-risk industries will pay more for workers' comp.

What is the workers’ compensation claim process?

The workers’ compensation process includes the steps employees must take to receive insurance benefits after a work-related illness or injury. The process involves employees reporting incidents to the appropriate person, often an internal HR department member, who will work closely with the employee to complete their claim.

As an employer, you’ll also be closely involved in the workers’ compensation claim process. You must ensure your HR team or outsourced HR provider processes employee claims appropriately and maintains regular contact with the filing employee and your business insurance provider. You’ll also be intimately involved in planning the employee’s return to work after they recover from their illness or injury.

The workers’ compensation claim process for employers

Thoroughly following the workers’ compensation claim process will help you comply with your state’s requirements and provide appropriate support to your employees. While your state may have specific provisions, the following steps will generally apply:  

1. Your HR team tends to the employee’s immediate needs.

Injured or ill employees are rarely physically or mentally able to file claims immediately after an incident occurs. Instead, the primary focus should be caring for the employee. 

Your HR staff — if present at or near the site of an injury — should administer first aid. If necessary, your HR team should send the employee to a doctor or hospital and reach out to the employee’s emergency contact.

2. You or the employee begin working on a formal claim.

After the employee’s emergency needs are met, they should file a written report within 24 to 48 hours of the incident. At that point, you’ll file a formal claim with your business insurance provider.

To begin filing a claim, you and the employee should meet with your HR team. During this meeting, all parties should discuss who will complete the required injury or illness report. Sometimes, your employee will do this alone; other times, you’ll handle it with their assistance. Your HR team can answer questions as needed.

Key information that typically should be provided includes the following:

  • Incident date and location
  • Injury or illness description
  • The date the employer learned of the incident
  • The date you gave your employee their claims paperwork
  • The date you received the employee’s completed paperwork

Depending on your state, you may also need to file state workers’ comp board forms.

3. You explain the workers’ comp process to your employee.

Before filing a claim, walk the employee through the workers’ comp process so they know what to expect. Ensure you cover the following points:

  • Report filing timeline: Ideally, the employee will file a claim within 24 to 48 hours of an incident. However, this goal may sometimes be unrealistic. That’s why the employee should know how long they have, under state law, to file claims. You should emphasize that claims filed outside this time frame could lead to a loss of benefits. Check your state’s guidelines to determine its report filing deadlines.
  • Healthcare options: In some states, you can designate the specific doctors employees can see to treat work-related illnesses and injuries. Regardless of whether this provision applies in your state, your HR team should thoroughly explain the employee’s healthcare options.
  • Additional healthcare considerations: Employees should be advised to retain all paperwork from their doctor visits. Additionally, although healthcare facilities usually file claims directly with your workers’ compensation provider, you should still give your employee the provider’s contact information. Lastly, ensure employees know whether their travel costs to and from healthcare appointments are reimbursable.
  • Wages: In cases where an injury or illness puts an employee out of work, it’s important to discuss how their wages will be replaced during their leave. Requirements vary by state and may sometimes include a maximum leave wage amount.
  • Time-off usage: Employees should know how your company’s time-off policies do and don’t intersect with your workers’ comp plan, relevant state laws and the federal Family and Medical Leave Act (FMLA). Discuss whether days employees spend on workers’ comp leave also count as vacation days, paid time off or any similar company policies.

4. You file a formal claim.

With the previous steps complete, you can now file a formal workers’ comp claim with your insurance provider. Even if your employee completes the claims paperwork on their own, you and your HR team should file the claim on the employee’s behalf.

Before filing the claim, ask your insurance provider how it prefers to receive claims. Electronic submission works for some, while others prefer postal mail or telephone claims. You should ask your provider whether you must also file the claim with your state’s workers’ comp body. In some cases, your provider will handle this step for you. 

FYIDid you know
Workers' compensation insurance rates differ depending on several factors, including industry risk, claims history and payroll costs.

5. You maintain contact with all parties.

Once your claim is filed, maintain regular contact with your insurance provider and your employee. This way, you can complete or forward any additional documents.

Your HR staff should also regularly update your employee on the status of their claim and remind the employee when they should expect to hear from the insurance provider about medical concerns and wage replacement.

6. Your employee receives the insurer’s decision.

While the above steps are essential, they don’t guarantee claim approval. Your insurance provider ultimately decides whether to approve the claim based on whether or not the information provided fits your plan’s terms.

If your provider approves your claim, your employee has two options. They can either accept the benefits offered, which typically include coverage for medical costs and lost wages, or negotiate for more money. Similarly, in the case of a denied claim, the employee can demand a review or approval.

7. The employee returns to work.

After your employee has tended to the injury or illness covered in their claim, they should return to work. Before doing so, they should notify you and your insurance provider of their intended return date.

As your employee prepares to come back to work, you should develop a customized program to facilitate their return. In doing so, consider the employee’s doctor-ordered medical restrictions on work duties and how these restrictions might affect their performance.

If necessary, create a temporary position for the employee until they can work at full capacity. Alternatively, if you have a current job opening that fits better the employee’s restrictions, you can assign them to this role until they are ready to return to their former position.

In some cases, your employee will be unable to return to work for an extended period, potentially meaning wage losses greater than their workers’ comp payout can cover. If so, you can try to extend the employee’s leave through FMLA, the Americans with Disabilities Act or company policy provisions.

Did You Know?Did you know
If they don't consider their workers' comp benefits sufficient, an injured worker can opt to seek a more significant workers' comp settlement that considers their current and future financial and medical needs.

How to make the workers’ compensation claim process easy

The best time to begin thinking about workers’ compensation is before an injury or illness occurs. It’s crucial to educate your team on workers’ compensation, what it entails and how to file claims. Start by creating a comprehensive handbook outlining the following aspects:

  • Coverage
  • Eligible injuries
  • How to file a claim
  • Benefits available to employees

Your handbook can also include safety information and emphasize that all employees can help contribute to a safe work environment. Include helpful resources and contact information employees can access if they must file a claim.

TipBottom line
To limit workers' compensation claims, enact measures to improve workplace safety and help prevent workplace accidents.

Workers compensation FAQs

Workers' compensation provides benefits to employees who become ill or injured on the job. It also provides disability benefits and compensation for lost wages due to a workplace injury. It can also pay for funeral expenses if an employee dies in a workplace accident.
Worker's compensation doesn't cover accidents that occur outside of work. And it may not provide benefits if an employee is injured on the job while intoxicated.
Most states require you to file a workers' compensation claim within 30 days of the accident, but you should file the claim as soon as possible. Check with your state and the specific policy guidelines to determine the deadline for filing a claim.
Yes, nearly every state requires companies to purchase workers' compensation insurance. Texas is the only state that doesn't require workers' comp coverage.

Jamie Johnson contributed to this article. 

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Max Freedman, Senior Analyst & Expert on Business Operations
For almost a decade, Max Freedman has been a trusted advisor for entrepreneurs and business owners, providing practical insights to kickstart and elevate their ventures. With hands-on experience in small business management, he offers authentic perspectives on crucial business areas that run the gamut from marketing strategies to employee health insurance. Freedman's guidance is grounded in the real world and based on his years working in and leading operations for small business workplaces. Whether advising on financial statements, retirement plans or e-commerce tactics, his expertise and genuine passion for empowering business owners make him an invaluable resource in the entrepreneurial landscape.
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