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Workers Compensation Insurance - Who Pays for It?
Posted: Sep 30, 2016
Workers compensation is a special type of insurance that employers purchase for their employees for the purpose of covering work related illnesses and injuries, or to simply injuries or illnesses that happen due to working in hazardous or risky environments.
The federal government does offer workers compensation programs, but each state has its individual workers comp law. The laws and benefits do vary state wise. No matter what the laws in each state, it is usually the employer that pays for the workers’ compensation through premium payments to government insurance programs, paying the insurance company or direct payment to the workers.
If you’re entitled to get workers compensation due to a workplace injury, you will receive it from the employer regardless of the type of method the employee chooses to use. However, it’s good to understand the difference the choice of method makes for your own benefit.
Government ProgramEvery state has set up a workers compensation program for injured workers. Your employer may choose to sign up with the state run workers compensation insurance program. The types of employers who use this method are usually small businesses or startups in industries where the chances of injury is very low or rare. The state departments that are responsible to manage the workers compensation will take the place of an insurance company. Once you file a claim, the employer pays the premium to the state program, the administration cross checks details and pays you, the injured worker.
Private Insurance CompanyDepending on the state, employers can purchase workers compensation insurance from insurance companies that are non-state or private. Where private insurance is permitted, most employees choose that only. Most insurance companies offer workers compensation to all types of companies whether big or small. In case your employer uses the services from a private insurance company, you will receive your compensation benefits from that private company only.
Individual InsuranceFor individual or self insurance, employers are required to have enough assets to prove that they are able to provide complete workers compensation to employees. For this, a significant amount of proof and paperwork is required to ensure that there is no fraud and the company pays the employee who has filed a claim, in full, through legal procedures and regulations.
Self insured employees usually employ services of a third party company who works as the administrator of workers compensation for its employees. The third party is then responsible to transfer the due compensation that it receives from the employer to the workers.
In case your employer uses self-insurance, it is best to hire workers’ compensation attorney or lawyer who is experienced and knows the nitty-gritty of handling the entire process according to law. This also gives the injured worker a peace of mind as he or she does not have to go through the hassle of dealing with insurance administrations while being injured and unwell.
John Smith is a workers compensation attorney and job injury lawyer in Pennsylvania. He is part of one of PA's best workers comp attorney settlement firm.