In most states, employers are required to purchase workers’ compensation insurance to ensure employees who are injured or become ill while on the job receive the benefits they’re entitled to. On the surface, the workers’ comp system is pretty straightforward: Employees receive benefits regardless of fault, and employers are protected against any lawsuits from an injured or sick employee. However, when you dig deeper, you’ll discover that workers’ compensation is a much more complex topic, and for employers, learning the basics is absolutely essential to staying compliant, maintaining a healthy workforce and preserving the bottom line.
With that in mind, let’s take a closer look at some important facts about workers’ compensation.
Workers’ compensation laws vary from state to state
While the basic theory behind workers’ compensation is essentially the same everywhere, the specifics of workers’ comp laws can vary significantly by state. Factors such as how much coverage your company has to provide, which classifications of employees must be covered, how much you’ll have to cover of an injured employee’s salary and other specifics are often different from one state to another.
You need to spend time educating yourself on your state’s workers’ compensation laws so you can be certain your business is in full compliance. If your company has operations in multiple states, you need to make sure each branch is in compliant with its state’s laws.
Workers’ compensation is your responsibility
As an employer, it’s your legal responsibility to pay for workers’ compensation coverage for your employees. Yes, it’s an added expense for your business, but the fact is that your state requires it (unless your business is in Texas). You are not allowed to charge your employees for these benefits or to penalize them in any way for receiving their workers’ compensation benefits. You also can’t make them pay for any part of this coverage. The entire burden is on you, the employer.
Employees typically waive their rights to sue your company
While you might not like having to pay the cost of workers’ compensation insurance premiums, you do get something in return. In most cases, employees waive their rights to sue your business when they take workers’ compensation benefits. Without such protection, your business could be at risk for a huge lawsuit if an employee were to get hurt on the job. So, workers’ compensation doesn’t just protect your employees; it protects your business as well.
There are measures you can take to control your workers’ compensation costs
Make no mistake, workers’ compensation comes at a cost for your business. Providing coverage for all of your employees can get expensive, but there are some measures your company can and should take to limit these costs as best as possible.
- Review your policy carefully: Take the time to carefully review your workers’ compensation insurance coverage to make sure it fits the needs of your business. You could be paying higher premiums than you should be, if for example, you’re in an assigned risk plan due to operating a high-risk work environment.
- Take steps to improve workplace safety: The safer your workplace is, the fewer accidents there will likely be and the less expensive your workers’ comp coverage will be. Take steps to improve the safety of your workplace, such as properly training your employees, making certain all equipment is inspected regularly for safe operation, maintaining a drug-free workplace, etc. Not only will these things make your workplace safer, but they could also qualify your company for credits to lower your premiums.
- Have your medical bills professionally audited for accuracy: Never blindly pay medical bills without having them professionally reviewed. Any time an employee goes to the doctor, you need to make sure those bills are reviewed for accuracy by an expert medical bill reviewer. The fact is that billing mistakes are quite common in the health care industry, so having a medical bill review company auditing your company’s bills can help ensure any billing errors are caught and corrected to save your company money.
Health care costs are increasing and showing no signs of letting up. Now is the time to take workers’ compensation seriously so you can provide your employees with the coverage they’re entitled to, while protecting your business interests as well.
Chris Drevalas is the Vice President of Marketing & Finance at Alpha Review Corporation. For over ten years, he and his company help companies with their medical bills for workers’ compensation.