Workers’ compensation benefits offer financial benefits like medical care and lost wages to employers who experienced an illness or work-related injury.
Did you know that almost every state requires employers to provide employee workers’ compensation insurance? Workers’ compensation benefits offer financial benefits like medical care and lost wages to employers who experienced an illness or work-related injury. We explain how the four types of workers’ compensation benefits work.
The Four Categories
The four categories that workers’ compensation insurance falls under include:
- Disability
- Medical
- Death
- Rehabilitation
How Medical Benefits Work
Workers’ compensation insurance takes multiple steps. An employee must report an illness or work-related injury. As a small business owner, you must file a workers’ compensation claim. In addition, your insurer will cover your employee’s medical expenses once the claim has been approved. The medical costs may include:
- Medication
- Doctor’s visits
- Physical therapy
- Hospital and emergency room care and surgeries
- Crutches, wheelchairs, or other equipment
Your employee won’t have to deal with co-pays, deductibles, or overall financial limits with worker’s compensation insurance. However, some states only sometimes cover medical bills based on authorized treatments. For instance, an insurance company might only approve a specific amount of physical therapy treatments.
Moreover, knowing that an injured employee may reach maximum medical improvement (MMI) is also crucial. An injured worker may have to cope with walking with a limp after experiencing many medical procedures and a lot of physical therapy. At this point, additional treatment won’t help the injury. Time limits on benefits may apply, you may have to define continuous work restrictions, an employee might receive an impairment or disability rating, and a workers’ compensation settlement often begins.
Understanding Disability Benefits
Disability benefits may recover part of a worker’s wages lost from their injury if they can’t work. The amount of wage replacement usually depends on the employee’s earning capacity, state mandates, and disability type. Most likely, the figure depends on the employee’s weekly pay before becoming injured. In most states, employees have a waiting period before obtaining benefits (usually three to seven days).
Furthermore, disability benefits may replace some of the employee’s lost income while they recoup or seek medical treatment until they return to work. This is known as short-term disability. Long-term disability is when the workers’ compensation insurance becomes permanent if a worker can no longer work. Also, workers’ comp benefits are taxable if the injured employee obtains another means of financial support.
What to Know About Rehabilitation Benefits
Rehab benefits support injured employers with permanent disability who may not return to their former jobs. The benefit typically covers costs like the following:
- Job training
- Tuition
- Resume assistance
- Skills assessment and testing
- Books and other expenses
- Job development and placement
Those benefits will cover the cost of acquiring certifications to resume work or retraining an employee to learn new skills for a job that pays comparable to their previous earnings. Most states require rehabilitation benefits, including up to two years of education or vocational training.
What are Death Benefits?
Death benefits are similar to life insurance. Suppose an employee passes away because of a work-related injury. In that case, workers’ compensation benefits the employee’s dependents, such as minor children, spouses, or elderly parents living at their house. Plus, death benefits cover funeral expenses and burial costs and may be able to replace lost income. Death benefits also come in a lump sum or installments on the state. They also can be payable years after an injury. One great example is if a physician diagnoses an employee with terminal cancer after being exposed to a toxic chemical.
Find the Right Health Insurance Solutions for Your Needs
Malden Solutions has a wealth of expertise in providing employer insurance solutions, HR solutions, and individual insurance solutions to businesses both big and small. Our team of seasoned professionals can help you navigate the rapidly changing world of insurance with ease. We partner with businesses and individuals throughout the country to provide our dedicated services for employee benefits but also work within our surrounding communities in Maryland, Northern Virginia, and Washington, D.C. Contact us today to learn more about how we can provide effective, dynamic solutions for your business. Stay connected with us on Twitter, Facebook, and Linkedin.