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.
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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.
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.
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:
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.
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:
Depending on your state, you may also need to file state workers’ comp board forms.
Before filing a claim, walk the employee through the workers’ comp process so they know what to expect. Ensure you cover the following points:
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.
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.
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.
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.
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.
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:
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.
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.