One issue I deal with regularly is insurance. Like personal insurance, business insurance is necessary, expensive, and difficult to understand. When I was tasked with evaluating our Workmans Comp Insurance compliance, I received a crash course in insurance legalize that I did not expect. Well, the purpose of this blog is to pass on the knowledge and experiences I receive from my position to you. Hopefully this insurance related post will be useful and not a complete snoozer. Without further delay…
What is Workers Compensation?
Workers comp insurance, or workers compensation insurance, is a type of insurance that provides replacement of wages and medical benefits to workers who are on the job with their agreement that they give their right to sue the employer. This is a tradeoff that takes away any recourse that the employee might have and is known as the “compensation bargain”.
Benefits will vary from state to state, but in most cases wage reimbursement on a weekly basis are paid, which works as a disability payment, and as reimbursement for the payment of medical benefits, which in fact, function as a form of heath, or medical insurance. I understand this to be the case from this source on Virginia Workers Comp Insurance. There are also benefits in the cases of employees who lose their life from an accident during work, which serve as a form of life insurance.
There are generally no provision for damages for pain and suffering, employer negligence in workers comp insurance situations. The benefit amounts that are available to the employee is usually spelled out by statute and a schedule is laid out and maintained by that means. The employer is the party who purchases the policy that will cover his employees under the law.
The statues will, in most cases, spell out the benefits that are related to the type of injury that is incurred. The payments are based on the type of work that the employee could reasonable obtain as a percentage of the ability of an uninjured person to find work. While this may seem to be a hardship, it does put some accountability into the system, but it is rare that a person is forced to find another job, if he or she is disabled from a workplace injury.
Do you need this insurance?
Most states require employers of a certain size to purchase workers comp insurance for their employees. Some states will have a state pool from where the coverage can be purchased; others allow private insurance carriers to offer the coverage. Overall, the concept has worked fairly well, as it gives workers the opportunity to recover from their injuries, without the abject fear of losing their job.
Most likely, a company will have specific doctors who will accept payment for their services from workers comp, and the employee will be referred there. However, the employee is not necessarily required to go to a company doctor, but he or she may be required to pay the difference between what workers comp pays, and the total charge of the doctor, if he or she goes to another doctor.
In the final analysis, as much as I dislike stroking checks for insurance, workers comp has stood the test of time and is well entrenched as being the foundation of employee compensation when injury occurs at the workplace.