Workers' compensation insurance is a program that protects workers from suffering income losses after suffering permanent disabilities on the job. Workers receive benefits to cover their salaries while they are out of work. Workers compensation' insurance also protects employers from lawsuits that could be brought against them by their disabled employees.
Information About Workers' Compensation
Each state requires workers' compensation insurance to be carried by employers who have more than four employees or are not financially capable to self-insure. Employers who have workers' compensation insurance protect themselves from being sued by their employees for medical expenses and lost wages. Workers' compensation insurance is also a no-fault policy, which means that neither companies nor employees are considered responsible for the incidents that caused the permanent disabilities.
Workers' compensation insurance premium amounts for employers are based on several factors including their work industries, claims’ histories and experience ratings. Companies that have physically demanding jobs such as construction or mining pay higher insurance premiums than law or marketing firms. Employers require disabled workers to be examined by their doctors. In some states, if individuals want to be seen by their own physicians, they must have submitted written requests before suffering work-related medical conditions.
Benefits and Taxation
Workers' compensation insurance pays workers two-thirds of their salaries. They will also have their medical costs including rehabilitation expenses covered by workers' compensation insurance. If workers were to die while on their jobs, death benefits would be paid to their spouses or dependents. Benefit payments from workers' compensation insurance are tax-free.
Workers' compensation insurance covers only permanent disabilities that occur on the job. If the same injuries happen outside the workplace, workers who don’t have private long-term disability insurance can apply for disability coverage through Social Security. Workers' compensation insurance also doesn’t cover individuals whose permanent disabilities were self-inflicted or were caused while they were engaging in criminal acts or under the influence of drugs or alcohol.
- Photo Credit handicap image by silonos from Fotolia.com
Eligibility Criteria for Permanent Total Disability Claims
Permanent total disability is a legal term, as opposed to a medical one. Two variations of the term exist, though their use...
- What Is the Meaning of 'Compensation & Benefits'?