Home » Special Needs Planning Q&A: What Is Workers Compensation?

Special Needs Planning Q&A: What Is Workers Compensation?

Oct 13, 2023 | Current Events

According to the Bureau of Labor Statistics, employers reported 2.6 million nonfatal workplace injuries and illnesses and 5,190 workplace deaths in the United States in 2021.

Workplace injuries and deaths can have severe consequences. Injured workers often must take time away from work, and disabilities they incur may prevent them from returning to their jobs. Medical care and funeral expenses can be costly.

In 2021, employment injuries resulted in $167 billion in expenses in the U.S., per the National Safety Council. This includes loss of wages, medical expenses, and costs to employers. The average cost of medically consulted injuries was $42,000, and the average cost of each death was $1,340,000.

In addition to taking a physical and financial toll, on-the-job injuries can adversely affect one’s mental health. A study published by the National Library of Medicine found that injured employees were twice as likely to report severe psychological distress. Meanwhile, an injured worker’s family members also may experience psychological and emotional distress. Often, they must cope with grief, changes in caregiving and other household responsibilities, or long-term shifts in family activities.

Workers Compensation Benefits

Created to reduce the burden of workplace injuries on employees and their families, workers compensation provides medical care and partial income when an employee suffers a workplace accident. Workplace injuries may include a fall, traffic accident, fire, electrical injury, broken or fractured bones, concussion, or exposure to toxic materials.

If you suffer a work-related injury or illness, you could receive workers compensation benefits from your employer.

State Programs

Each state runs its own workers compensation program. Most states require employers to purchase workers compensation insurance for their employees or be self-insured. Employees are not responsible for obtaining coverage.

What Does Workers Compensation Cover?

Several benefits may be available to employees who suffer workplace injuries:

  • Medical Benefits – Health care benefits encompass coverage for hospital visits and emergency surgeries. This also includes the cost of ongoing care, such as follow-up appointments and physical therapy, as well as medications.
  • Lost Wages – While employees may not receive the full amount they earned while working, workers compensation can provide partial income to help them make ends meet while they are no longer working because of an on-the-job injury. The payment is typically about 60 percent of their typical income.
  • Death Benefits – When a workplace injury causes the death of an employee, the surviving spouse or family can recover death benefits. These benefits are typically a percentage of the worker’s pay for a period of time. While states vary in how they calculate death benefits, a typical award is two-thirds of the employee’s income for two years.
  • Permanent Disability Benefits  Obtaining permanent disability benefits requires a doctor’s determination that the condition will not improve, which is known as reaching the maximum medical improvement. However, it can take years before a physician concludes that someone is permanently disabled.

Limitations on Providers and the Workers Compensation 90-Day Rule

Reporting an incident, filing a claim, and visiting a health care provider for treatment are all essential steps following a workplace injury. However, rules regarding these actions can vary widely from state to state.

Some states, such as Pennsylvania, Arizona, Colorado, and Maine, allow employers to limit which providers their employees can see in the first 90 days following an incident. In these states, the employer will only pay for specific treatments if the employee goes to an approved provider. After the initial 90-day period, the employee can then choose a different provider.

States also vary in whether they have this 90-day rule and how it works. For instance, in Maine, employees must see an employer-approved doctor only for their first 10 days of treatment.

A Note on California’s 90-Day Rule

California’s 90-day rule is unique. There, insurers have two weeks to respond to claims. If the employer delays the decision, it must pay up to $10,000 in medical care while the decision is pending, but it does not have to give temporary wage loss benefits.

Employers can only delay a claim for 90 days. Then, they must accept it and provide workers compensation coverage.

How Attorneys Can Help

If you become disabled due to a work injury, a local, qualified attorney can help you understand how to obtain workers compensation in your state. They can assist with making a claim on time, appealing denials, and obtaining the full amount of benefits to which you are entitled.

A special needs planning attorney in your area can also guide you on how to qualify for public benefits following a workplace injury.

Some materials, in whole or in part provided by the Academy of Special Needs Planners, an independent 3rd-party. The information contained here does not purport to be a complete description of the topics referred to in this material. As of the date published the information is considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete due to ever changing legal constructs and state specific differences. Please note, changes in laws may occur at any time and could have a substantial impact upon each person's situation. While we are familiar with the tax provisions of the issues presented herein, as Saybrook Wealth Group, we are not licensed to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.