How Do Workers' Compensation Claims Work?
The workers' compensation insurance claims process may seem complicated, but the employer's role is pretty straightforward:
- Give the employee the appropriate paperwork and guidance.
- File the claim with the insurer.
- Comply with state laws for reporting work injuries.
For very small businesses, the business owner is often responsible for filing the claim.
Workers' compensation is regulated by the state, so the claims process may vary depending on where the business is located, but these are the basic steps of the claims process.
1. The employee reports an injury to the employer
To make a workers' comp claim, the employee's injury or illness must be work-related. This means a whole host of injuries may qualify, such as slipping on an ice patch on business property or developing cancer from exposure to toxic substances in the workplace.
In emergency situations, the employee should be rushed to the ER. For less immediate concerns, they should go to a doctor to get a diagnosis and medical report to file with their claim.
In some states and with some insurers, the employee needs to visit a medical provider that’s part of the insurer’s network to receive benefits.
The employee must give you written notice of the injury as soon as possible. Some laws require the employer to be notified within a few days. In New York, the employer must be notified within 30 days. Some states may even allow up to a year or two.
With injuries or illnesses that surface over time, such as mesothelioma (caused by exposure to asbestos), the employee needs to report to you as soon as they are aware of the injury or illness.
2. Employer provides paperwork
Once you're notified about the injury, give the employee:
- The proper reporting forms for your insurance provider.
- A form for reporting to the state workers’ comp board (depending on where you live).
- Information on the employee’s rights and workers’ comp benefits.
- Information about returning to work.
The forms you need depend on your state, the type of illness or injury, and your insurer. If possible, give this information to your employee before they seek treatment. In fact, it’s a good idea to include your business's workers' comp insurance information in your employment packet for new hires. Failure to give your injured employees this information could lead to lawsuits.
3. Employer files the claim
Usually, you're responsible for submitting the paperwork to your insurance carrier, but the employee’s doctor needs to mail the medical report. There may be a time constraint for submitting these forms, so don't delay. The insurance company generally provides the correct forms, but you may need to acquire them independently.
Additionally, you may need to submit documentation to your state’s workers' compensation board or other similar entity. This may apply for all workplace injuries, even if the employee is not seeking workers’ comp benefits.
If the employee needs to file a separate notice with the state board, make sure they know that.
4. The insurer approves or denies the claim
Once the claim is filed, the insurer will either approve the claim and contact the employee for payment details or deny the claim if it doesn’t qualify for workers’ compensation.
Either way, the rest of the process is between the employee, their legal representation (if any), their doctors, and the insurance company.
If the insurer approves the claim, the employee may:
- Accept the payment offer, which may cover costs for medical bills, medicine, disability payments, and a portion of their lost wages.
- Negotiate for a lump-sum settlement or larger structured settlement.
If the insurer denies the claim:
- You can ask them to review the decision if you believe the decision is wrong.
- The employee can appeal.
In both instances, the insurance provider will notify the workers’ comp board of its decision.
5. The employee returns to work
When the employee recovers and wants to return to work, they must alert you and the insurance company via a written notice. Depending on the severity of the injury, the insurance company may continue paying disability benefits.
Employers must follow the workers’ compensation claim process
Following the correct claims procedure – and supplying employees with the proper information so that they may do the same – is important because employers can be fined for:
- Not carrying workers’ compensation insurance.
- Not supplying employees with accurate information.
- Failing to report injuries or file claims on time.
- Misclassifying employees and / or injuries.
- Influencing a medical practitioner’s diagnosis.
- Appealing a claim without probable cause.
If you have employees and your state requires you to provide workers’ comp benefits, don’t delay on getting insured. Apply for quotes from Insureon today. Most small business can get workers’ comp coverage in 24 hours, depending on their state.