Workers’ Compensation Insurance: What Benefits Are Available?

In some vocations more than others, we place our bodies at risk in order to achieve the objectives that we were hired to achieve. If that risk materializes, we may incur medical costs, we may miss time (and wages) from work, and we may even lose the ability to engage in that vocation. That isn’t a good outcome for the employer either. Employers invest a lot of time, money, and energy in recruiting and training workers, and therefore benefit from retaining or even rehabilitating them following a workplace injury.

Workers’ compensation is a no-fault system intended to quickly deliver medical treatment to employees and restore their ability to return to work at a low cost to employers. After an employee sustains a work-related injury, the employer is required to supply medical treatment, wage replacement benefits, rehabilitation benefits, and permanency.

Medical Treatment

The employer is required to supply medical treatment that is reasonable and necessary to treat the work-related injury. Many states have a set of regulations intended to define which types of (and how much) medical treatment are reasonable and necessary in a specific and definitive way. In general, medical treatment that has been empirically shown to improve outcomes or symptoms for a particular medical condition will likely be considered reasonable and necessary.

Wage Replacement Benefits

The employer is required to pay a wage replacement benefit for time that the employee misses from work as a result of the work-related injury. The amount and length of the wage replacement benefit varies from state to state. The amount is generally slightly less than the employee’s average gross earnings. The length can be broken into three categories:

Total disability: Total disability occurs when the employee is unable to work at all, or is restricted from his or her usual occupation. Total disability usually terminates shortly after the work-related condition stops improving.
Partial disability: Partial disability occurs when the employee is restricted from his or her usual occupation, but is able to work in a lower-paying occupation or in a limited capacity. The employer is required to pay wage replacement benefits based on the difference in earnings.
Permanent total disability: Where an employee is rendered permanently unable to work in any capacity by a work-related injury, the employer may be required to pay wage replacement benefits until retirement age.

Rehabilitation Benefits

Rehabilitation benefits are for services intended to facilitate the injured employee’s return to work. Below are some common examples:

Assistance of a vocational professional: A professional may be appointed to coordinate return to work, including communicating work restrictions to the employer, making recommendations for transitional work assignments, evaluating work assignments, and the like.
Job search assistance: If an employee is unable to return to his or her usual occupation, vocational professionals may assist with drafting resumes, recommending open job listings, interview coaching, and other job search support.
Vocational skills and retraining: Vocational professionals may also provide or arrange various types of training, ranging from basic computer skills instruction to college degrees.

Permanency

Permanency is a rating system that is used to express the loss of use of a body part as a percentage of the body as a whole. That percentage is then translated into a monetary benefit payable to the injured employee. The percentage used and the corresponding benefit are determined at the State level, and the permanency benefit will therefore vary from State to State. By way of example, in Minnesota, an amputation of the leg less than four inches below the knee joint results in a 34% permanency rating. That 34% rating results in a monetary benefit of $39,270.