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Workers’ Compensation 101

What is Workers’ Comp?

Workers’ Compensation is a form of insurance that provides a replacement wage as well as health benefits to help workers who become ill or injured on the job. In return for receiving a workers’ comp settlement, the employee gives up their right to sue the employer. This can save the employer from multi-million-dollar lawsuits in return for providing healthcare coverage and wages while the person is out ill or injured for a predetermined amount of time.

Employers Must Understand Workers’ Comp:

It’s vital for employers to understand what the workers’ compensation requires the company to pay and when the company will have to pay for it. The following are 7 things that companies must understand about workers’ comp:

  • Hospital Bills: The workers’ comp packages will pay hospital bills that are related to the illness or injury sustained at work. Workers’ comp may also pay for rehabilitation or other services related to the illness or injury that occurred on the job.
  • Workers’ Comp Covers Most On-the-Job Illnesses or Injuries: Workers’ comp will typically cover medical expenses and lost wages relating to documented on-the-job illnesses or injuries. These may include serious illness caused by exposure to chemicals or injuries caused by equipment or actions taken on the job site. These are costs required to be covered by the company’s insurance policy.
  • Situations Workers’ Comp Won’t Cover: Some situations workers’ comp won’t cover include any injuries that are self-inflicted or injuries that were sustained while the worker was committing a crime while on the job. Workers’ comp does not cover injuries that happened while the employee was not on the job or while an employee was violating company policies, especially in regards to safety.
  • It Must Be a Problem Caused At Work: Workers’ comp does not cover long-term illnesses or injuries that started outside of work. Workers’ comp is only for illness or injury that can be directly related to something that happened on the job while working, barring self-harm, criminal interactions, or going against company policy.
  • Employees Covered By Workers’ Comp: Only some employees are covered by workers’ comp and state laws vary in each state. Coverage will depend on how many employees the company has and what type of workers’ comp insurance the company is covered by. Seasonal or casual workers may or may not be included. Sometimes only full-time employees are included.
  • Employees Seeing Their Own Doctor(s) For Injuries: In some states or instances, employees will be allowed to go see their own doctors and specialists for injuries caused by the jobs. Other states will require the employee to see a select set of doctors chosen by the company, or the insurance company providing the workers’ comp benefits.
  • Workers Can Sue: Workers have a right to not accept the workers’ comp coverage offered by an employer in lieu of suing the company if they feel their injury is caused by company negligence or lack of safety precautions. However, once an employee does accept workers’ comp benefits, they can not sue.

Workers’ compensation is a complicated subject for most business owners. Hiring a PEO to handle this task for you and ensure you remain compliant may be your best choice. For more information on workers’ comp and our other managed services, contact Harbor America anytime.

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