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3 Sources of Workers Compensation

Workers are the backbone of America’s economy and without them, the country would come to a halt.

3 Sources of Workers Compensation

That is why they deserve to be taken care of as much as possible and part of that care is workers’ compensation. Known as workers’ comp for short, it is a policy that provides benefits to workers who were injured on the job. Those benefits include medical care for the worker’s injuries and temporary disability benefits to replace the wages the worker is unable to earn while they are injured.

Employers in all states are required to carry workers’ compensation, but the way that they pay for it can differ from state to state. Normally, the worker’s compensation process is fairly simple and straightforward, but in some rare cases, there may be issues between the employer and the injured worker, in which case the worker may need the help of a workers’ compensation lawyer to help them. If you are having trouble with your worker’s compensation, then be sure to contact an attorney to help you.

State-Run Programs

In many states, employers may choose to receive workers’ compensation via a state-run program or an insurance fund. It is usually small businesses or businesses where there are very few workplace injuries that choose this method.

With state-run programs, the state department responsible for the program is the one who pays out the workers’ compensation benefits. The way it works is that the employer pays premiums and when there is a claim the state department finds out what benefits are owed and then pays the employee who needs them.

Insurance Companies

Many states allow or require employers to purchase workers’ comp insurance from private insurance companies that are authorized to write insurance policies in that state. California is one such state where private insurance companies are allowed to provide workers’ comp insurance, whereas Washington does not allow private insurers.

If an employer does use a private insurance company, then that company is the one that pays the benefits to the injured worker.

Self Insurance

If a company is big enough, then it can provide workers’ compensation coverage for its employees by itself. The employer must have enough assets to cover the workers’ comp liability and must usually submit to a lot of oversight from the state in order to ensure that they follow the proper procedures and that workers receive the benefits that they are entitled to.

If an employer is self-insured, then it generally uses a third-party administrator to deal with the paperwork and the management and processing of the workers’ comp claims. The employer will send the funds needed by the injured worker to the administrator, who then send those funds to the employee.

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Any disputes between the worker and the employer about workers’ compensation are more likely to happen when the employer is self-insured.

That is because the employer has a lot to lose if they have to pay out workers’ comp benefits, so they will fight any compensation claims and they will likely have a lot of financial resources to do so.

If you are in such a situation, then it is in your best interest to retain an employment attorney to help you.


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