Intro to workers' comp for employers
Workers’ comp is a type of insurance that supports employees and businesses in the event of on-the-job injuries. It is typically mandatory for businesses to carry work comp coverage. Some exceptions to this rule can include family businesses (with only family members as employees), agricultural businesses with temporary workers, and businesses that only work with independent contractors. However, exempt businesses frequently choose to carry coverage anyway, as the benefits can greatly outweigh costs. For more information about exemptions and requirements, business owners should contact their state’s appropriate governing agency.
Having workers’ compensation coverage is a good thing for employers. It incentivizes safety in the workplace and ensures that employees who are injured or become ill as a result of completing work-related activities are properly compensated during their recoveries. In the case of permanent injuries, employees may also be compensated after they are fully recovered.
Having workers’ comp insurance can also help the business by limiting its liability from work injury lawsuits. Generally, workers’ comp payments cover the costs related to injuries at work without assigning liability on the employer’s side.
Want to learn more about who needs workers’ comp coverage? Read more
Medical-only workers’ compensation coverage
Medical-only workers’ compensation benefits are an important component of workers’ compensation coverage. These benefits come into play when workers’ compensation insurance covers the medical bills of an injured or ill employee. These benefits only cover related medical expenses, not missed time at work or disability payments.
These medical-only workers’ compensation cases are common, in which only medical expenses are paid, and the employee can return to work after having been treated by a medical professional. Between 1993 to 2013, medical-only workers’ comp payments accounted for the bulk of workers’ compensation cases in the United States, according to the National Council on Compensation Insurance (NCCI). However, these expenses comprise only a small portion of total workers’ comp payments, as medical-only expenses tend to be less costly than other types of workers’ comp, such as disability payments.
Employees who receive medical-only workers’ comp payments typically only miss a few days of work.
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Short-term workers’ compensation coverage
Sometimes, a work-related accident or illness may cause the employee to miss a substantial amount of work. In these cases, workers may be eligible for temporary disability payments, which include compensation for missed wages and other financial support during recovery.
There are two types of temporary disability: temporary partial disability and temporary total disability.
- Temporary partial disability payments are disbursed when the injured employee can work in a limited capacity. Although they are not able to work in their pre-injury capacity, they may be able to complete “light duty” tasks. Light duty can include reduced hours, sitting instead of standing, or working in a different role at the same company. In cases of temporary partial disability, employees receive disability payments to help act as partial replacement wages during recovery.
- Temporary total disability payments kick in when an employee is temporarily not able to work at all at their pre-injury job or in a “light duty” role or another capacity for that employer. This may occur when an employee suffers a severe but temporary injury, such as a broken wrist, from which they will be able to recover completely. In Oklahoma, employees on temporary partial disability are eligible to receive partial reimbursement of their pre-injury wages.
In both cases, the employee can return to work when they have reached maximum medical improvement (MMI); in other words, when they are as healed as they can be. An employee may return to work before they reach MMI if they are able to work in a light-duty role.
Long-term workers’ compensation coverage
Other times, a work-related accident or illness may permanently affect the ability of the employee to work, either at the pre-injury job or any job. In these cases, the employee may be eligible for permanent disability compensation. There are two types of permanent disability payments: permanent partial disability and permanent total disability.
The disability is considered “permanent” when the employee has reached maximum medical improvement, also known as MMI, and still cannot work at their pre-injury job.
- Permanent partial disability payments are made when an employee has reached MMI and may be able to work at their pre-injury job in some capacity.
- Permanent total disability payments are made to employees who cannot work at all due to their work-related injuries or illnesses. Permanent total disability claims are rare – less than 1% of all workers’ comp claims.
For example, if a worker suffers an injury that results in a leg amputation, their ability to perform their pre-injury job will be considered when determining which level of reimbursement they will receive – partial or permanent disability payments. If that worker is a supervisor who mainly works in the warehouse office, they may still be able to do that job, in which case they may receive permanent partial disability payments. However, if they work on the warehouse floor (e.g., operating machinery, lifting objects), they may not ever be able to go back to performing that job. In that case, they may be eligible for permanent total disability payments.
Death benefits
In the unfortunate event that an employee suffers a fatality due to work-related activities, the employee’s family may be eligible for funeral and burial expense compensation through workers’ comp. This benefit can be a huge financial help to the employee’s family, particularly during a time of grieving. The family and other dependents may also receive some cash benefits. It’s worth noting that fatality claims only make up about .5% of all cases.
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CompSource Mutual’s top-notch team has expertise in serving the industries that keep Oklahoma’s economy running. For over 85 years, we’ve supported a wide range of Oklahoma businesses and can get you coverage that makes sense at a fair price.
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What is workman's comp?
Workers’ compensation insurance, also known as workman’s comp, provides benefits to employees who get injured or sick from work-related causes. Most states have mandatory work compensation laws to protect people who become injured or disabled while working.
What does workers' comp include?
Workers’ comp includes disability benefits, partial missed wage replacement, and death benefits. Workers’ compensation also reduces the business’s liability for work-related injuries and illnesses.
How can an employee claim workman's comp?
The employee must first notify their supervisor and help fill out an accident or incident report. The worker should make note of anyone who witnessed the accident and produce as much documentation as they are able to (photos, videos, and timesheets). The supervisor/employer must then report the accident to the workman’s comp insurance company. However, employers and employees should refer to established company policies to properly navigate the process.
How much does workers' compensation cost?
There is a great deal of cost variation between states, job types, and employers. Workers’ compensation is calculated by taking several different variables into account: the job type/industry, the base premium rate set by the state (the price per $100 in payroll) and the company’s mod rate. The mod rate is a number that accounts for the company’s claim history. This number can increase or decrease the overall premium amount the employer pays.
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