How are workers’ comp disability payments determined?

Image by mohamed Hassan from Pixabay

By Rebecca Stuart

When a workplace injury occurs, or an employee develops a work-related illness, workers’ comp insurance provides a financial safety net. But who decides how much money an affected employee receives? Who determines whether or not the employee can return to their previous job safely? If you’re an employer or employee and want to know exactly what happens after a workplace injury, you’ve come to the right place.

Workers’ compensation coverage

Most businesses in the United States have a workers’ compensation policy paid for by the business owner on behalf of the workers. The insurance ensures that employees receive their due compensation, and protects employers from potential lawsuits regarding a workplace injury.

Injuries, illnesses, and medical care

Workers’ comp insurance applies to any injury or illness sustained by an employee while performing work activities, regardless of who is “at fault” for an incident. (Exceptions to the rule include accidents that occur while an employee is inebriated, breaking the law, or ignoring company protocols.)

Covered ailments include accident-related injuries, illnesses caused by the work environment, and repetitive stress injuries or other injuries or diseases developed over time caused by work activity or exposure.

When an injury or illness occurs, employees have the right to seek medical treatment. Medical professionals provide care and conduct evaluations of the employee’s injury and recovery. These records can later be used by the insurance provider to determine compensation amounts. Doctors also determine an employee’s disability status, if applicable.

Employee workers’ comp benefits

Typically, workers’ comp benefits for employees include:

-Medical Coverage: The insurance covers the cost of treatment for any occupational injury or illness. This consists of the related fees for hospital treatment, medical diagnostic tests, consultations, medications, physical therapy, nursing care, and medical equipment like wheelchairs and crutches.

-Rehabilitation: Often, the state offers vocation rehabilitation to employees who are unable to return to their job due to a work-related injury. Though not required, many employers develop their own return-to-work policies to smooth the employee’s transition back to work.

-Disability Benefits: If any employee misses work due to their injury or illness, disability payments cover a percentage of their lost wages. The payment amount and duration depend on the disability classification given by a medical professional. The classification categories are temporary total, temporary partial, permanent total, and permanent partial disability.

Calculating compensation

If a work-related injury or illness makes an employee unable to work, they can file a workers comp disability to receive weekly disability payments. The weekly amount paid to the employee depends on state regulations. Typically, the state’s workers’ compensation board uses the employee’s average weekly wage to calculate their disability payment. Other determining factors include:

-If the employee worked in the same industry for a full year

-If the employee worked at the company for a full year and how many hours they worked per week

Furthermore, the workers’ comp board will assign the injured employee a degree of disability number (from zero percent to 100 percent) that indicates their physical limitations caused by the injury or illness. This number, in turn, determines the weekly payment amount the employee receives.

Claims and settlements

Employees have the right to reject the compensation package offered by the workers’ comp insurance provider. In this scenario, legal representatives of the employee and the employer can enter negotiations and come up with a settlement, which can be paid in one sum or in installments. Some, but not all, workers’ compensation policies help pay for the employer’s legal expenses as well as the settlement itself.

Factoring fairness after workplace injuries

At the core, the purpose of a workers’ comp policy is to prevent any party involved having to pay the full price of a work-related injury or illness. These policies help determine and broker compensation that meets the needs of the employer and the injured employee. While business owners and their staff should work together to prevent any workplace accidents, they can both rest assured that workers’ comp will provide fair financial assistance should an injury occur.

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Rebecca Stuart is a part-time freelance writer who specializes in writing about business, technology, and lifestyle. She is also a mother of a daughter and likes to spend her free time doing art.

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