It is not uncommon for new employers just getting started with workers' compensation insurance to not fully understand what it's all about. For example, many are unaware that workers' comp pays different kinds of benefits depending on the circumstances of a given claim. This is the kind of thing we help our clients with when they choose to purchase workers' comp through us.
BenefitMall offers a creative, pay-as-you-go workers' comp solution that includes electronic payments, streamlined premiums, and significant savings over standard policies. Feel free to contact us to learn more about it. In the meantime, let us talk about the four kinds of benefits that workers' comp policies usually pay.
Note that the four benefit types described below are general in every sense. Workers' compensation insurance is regulated by the states, so insurance companies must align their policies with the rules in the states they serve. The benefits in one state may differ from those in another.
1. Loss of Income
This first benefit is the one most people associate with workers' compensation. It is considered a disability benefit inasmuch as it is paid because a worker does not have the ability to continue working as a result of illness or injury. There are four scenarios under which loss of income benefits are paid:
- Temporary Total Disability – Prevents any kind of work for a limited amount of time.
- Temporary Partial Disability – Limits the kind of work that can be performed for a limited amount of time.
- Permanent Partial Disability – Permanently limits the kind of work that can be performed.
- Permanent Total Disability – Permanently prevents any and all work being done by the employee.
2. Medical Benefits
The second kind of workers' comp benefit is a medical benefit. It is designed to help cover hospitalization and other medical expenses necessary to treat an injury or illness related to work. As a general rule, you're talking office visits, medication, medical equipment, surgeries, etc.
It should be noted that many states require injured or ill workers to get advance authorization for treatment in order to receive medical benefits. The obvious exception here is a legitimate emergency that threatens life or limb. Workers' comp providers generally have no problem applying medical benefits to emergency care.
3. Rehabilitation Benefits
Hand-in-hand with medical benefits are rehabilitation benefits. These benefits are intended to cover the costs of medical and therapeutic care relating to rehab. A good example would be physical therapy needed to recover from an accident resulting in serious injuries to an arm or leg. Because rehab is necessary to get the individual back to work, it is covered by workers' comp insurance.
4. Death Benefits
Some states require workers' comp insurance to include death benefits paid to relatives in the event that a covered injury or illness leads to an employee's death. Relatives eligible to receive the benefits generally include spouses and dependent children. Other adult dependents may qualify under certain circumstances.
The intent of death benefits is to help cover lost wages to some extent. However, this is one area of workers' compensation that is especially tricky to navigate. A lot goes into figuring out who gets what, how much each recipient gets, and the duration of any benefits paid.
State laws dictate that almost all of America's employers carry workers' comp insurance. If you are new to the whole workers' comp game, there is a lot to learn. We encourage you to contact us to learn more about our unique, pay-as-you-go solution designed especially for small businesses. It could be the perfect solution for your company.