Who pays for workers compensation?

Workers' compensation insurance is purchased by employers and paid for by the employer. Most states require employers to purchase workers compensation to cover medical costs and provide wage-loss benefits for employees who are injured while performing their normal job duties. Workers compensation insurance can also protect employers against work injury lawsuits.

State laws determine what type of workers' compensation insurance is required to be purchased in each state, but if workers' compensation is required, there are several methods to purchase coverage. For example, employers can purchase workers' compensation insurance through a state-run insurance program or through a private insurance company, or they can provide insurance themselves.

State-Run Workers compensation programs

If your employer has purchased workers' compensation insurance through a state-run program or insurance fund, the fund will be managed and administered by the state's department of labor, commerce, or industrial relations. The employer is responsible for paying the premiums, and if an employee is injured, the case is reviewed, and the state-run program pays the injured party.

State-run workers' compensation programs function like other federal workers compensation programs providing benefits for lost wages and disabilities, reimbursement for medical treatments, and benefits paid to dependents in the event of a workplace fatality.

Workers' compensation purchased through a private insurance company

Although not all states allow a company to purchase workers' compensation from a private insurance company, most do. If your employer has private workers' compensation insurance they will pay insurance premiums to a private company such as Liberty Mutual or Chartis. If you are injured at work your workers' compensation payments will be paid by the private insurance company to you.

Workers' compensation through self-insurance

Some states allow larger companies, who have sufficient assets, to self-insure their employees for work injuries. Self-ensured companies may hire another company to administer their workers' compensation claims and perform daily oversight for the claim's management process including filing paperwork, claims processing, and management of the claim benefits. Payments for workers' compensation will be paid by your employer, although the third-party administrator will send you the actual payment each month.

What if my employer does have workers' compensation?

If for some reason your employer does not provide workers' compensation coverage and you are injured on the job performing your normal job function your employer can be liable for your injuries. Consider also, if the employer starts a business and does not provide proper insurance this can be considered a criminal offense if the action was done knowingly and willfully.

How will my benefits be paid?

In most cases, your workers' compensation payments will be paid directly to you, the injured employee. For example, if you have been injured you can expect compensation for your lost wages and medical care. Payment can be paid in a single lump sum payment, or it may be made incrementally. State laws have been established to determine the value of specific injuries. Statute of limitations also exists for workers' compensation claims. If you have been injured it's important to report your injury as soon as possible and find out your rights.