Workers Compensation Insurance Basics
In the event that one of your employees is injured on the job, workmans comp will cover their medical costs and lost wages during the recovery period. Whether or not your business carries coverage, your employees are entitled to these benefits by law. Be sure your business maintains proper workers compensation insurance to protect your employees and your business.
Who is considered an employee?
This varies by state, but generally an employee is anyone who:
- Is paid,
- The employer can hire and dismiss them, and
- The employer exercises control over how the work is performed.
For the first point, the employee can be paid by any means, whether by 1099, W-2, or cash. If they are compensated, #1 is satisfied. The second point addresses the employer’s authority. If the employer decides whether that person does or does not fill the position, they qualify. The third and last point amounts to how much control is exercised over the employee. This is, admittedly, where gray areas arise. But generally, if an employer tells someone how to do the job and provides tools for the work, they will qualify.
Are subcontractors employees?
Review “Who is considered an employee?” above and our article on Subcontractors and Workers Compensation.
What are the reporting procedures for injuries and illnesses?
If employees are injured, they should notify you immediately to file a report. This will initiate the process for receiving workers compensation insurance benefits. Review our Workers Compensation Claim Instructions.
How are employees reimbursed?
Lost compensation is payable during the time period in which employees are authorized by their treating physicians. Benefits are paid weekly at a state-specific percentage rate of their average weekly wage, up to a maximum dollar amount. There is also a state-specified waiting period before benefits are available. Contact Us for details regarding your state.
What is an independent medical exam (IME)?
An IME is an exam by a medical professional other than the physician who first examined an injured or ill employee. As the employer you can request an IME to confirm an original diagnosis and treatment plan.
What happens if employees do not comply with recommended treatments?
Non-compliance with recommended medical treatments, therapy or return-to-work plans may jeopardize workers’ compensation benefits.
Tips for Controlling Costs
Maintaining a safe workplace is vital. This is often the most inexpensive way to control your workers compensation insurance costs. A safe workplace means lower claims which means lower insurance costs in the long term. Here are some other ways to control costs:
- Implement a return-to-work policy in which employees work modified duty until they are fully healthy to do their jobs.
- Orient and train your employees on safe practices necessary for their job functions and tasks.
- Insist that employee claims be reported promptly.
- Investigate the cause of injuries and illnesses. Take action to prevent such an incident recurring.