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

According to the U.S. Bureau of Labor Statistics, employers reported 2.6 million nonfatal workplace injuries and illnesses in 2021. More than 5,100 workplace deaths occured in the United States that year.

Workplace injuries and deaths can have severe consequences. Injured workers often must take time away from work. Disabilities they incur also may permanently prevent them from returning to their jobs. At the same time, the costs for medical care and funeral services are ever-increasing.

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, as well as 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 are likely to experience psychological and emotional distress. Often, they must cope with even more than feelings of grief; changes in caregiving and other household responsibilities or long-term shifts in family activities can also have a negative impact.

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, meaning it has reached 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 the 90-Day Rule in California

The 90-day rule in California 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 an Attorney Can Help

If you become disabled after sustaining an injury in the workplace, a qualified attorney can help you understand how to obtain workers compensation in your state. They can assist with making a claim on time and appealing denials. A professional with expertise in this area also can ensure that you are 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 the appropriate public benefits following a workplace injury.

The following SpecialNeedsAnswers.com articles may provide additional helpful information:

• What Is a Medicare Set-Aside and When Do You Need One?
• Consequences of Not Using a Medicare Set-Aside Account
• Using FMLA to Care for a Loved One With a Disability