While the systems that administer the benefits vary from state to state, employers within a given state ultimately pay for workers’ compensation benefits. In some states, the premiums are paid into a state-run program, while in others a private insurance company collects those dollars. In a few states, employers pay benefits directly to the worker. The type of benefits workers receive are generally the same, regardless of which system your state uses.
Workers’ Compensation Programs Operated by State Governments
In states that operate their workers’ compensation programs, employers opt in to the system and pay premiums to the state or into a state-run insurance pool. Most programs of this type operate through the Department of Labor, the Department of Commerce, or the Industrial Relations Department. Small businesses and industries with few on-the-job injuries usually find it beneficial to participate in a state-run program.
If you get injured at work, and your employer is part of a state-run workers’ compensation program, your benefits come from the department of the government that administers the plan. Behind the scenes, the logistics are similar to that of any other type of insurance. The employer pays premiums, and the state manages claims and pays out benefits.
Workers’ Compensation Programs Operated by Insurance Companies
Most states allow companies to buy workers’ compensation insurance from a private company instead of opting into a state system. If you work for an employer with a private workers’ compensation policy, you file your claim with the insurance company and receive your benefits directly from it. Some states, such as Washington, do not allow private workers’ compensation policies.
Self-Insured Workers’ Compensation Programs
In states that allow self-insurance, the company must prove that it has enough assets to cover claims incurred. The state government monitors these businesses closely to make sure claims are processed and benefits are paid correctly and in a timely fashion.
Employers who elect to self-insure often contract with a third-party to administer claims and benefits. When a work-related injury occurs, the employer pays directly to the administrator, who in turn pays the injured workers benefits. Of the three systems, self-insured plans are most likely to try to avoid paying out workers’ compensation benefits. Large companies can afford to pay lawyers to fight claims on their behalf.
If you get hurt on the job and your employer obstructs your access to your workers’ compensation benefits, contact a knowledgeable and experienced attorney, like a workers compensation Attorneys in Milwaukee, WI, right away. A delay can damage your claim and leave you without the benefits you deserve.
Thank you to Hickey & Turim SC for their input into personal injury law.