A Five-Step Workers’ Compensation Insurance Guide (That ANYONE Can Follow)

Nov 29, 2020 | Business Insurance

Accidents do happen anytime and anywhere. Whether it be in the safe confines of our home, on the road, a hospital, or even in the workplace. It’s like seeing the popular adage Murphy’s Law come to life, “if anything will go wrong, it will.” 

If that will be the case, how can a business owner prepare for this eventuality and protect both his employees and his business itself? There are many types of insurance policies that can address these needs but the simplest is the Workers’ Compensation Insurance program. What is it all about?

Workers’ compensation is a state-based insurance system. This program aims to give employees who could not go back to their original job due to a work-related accident or an occupational disease.

This is administered by the U.S. Department of Labor, through the different Office of Workers Compensation Programs (OWCP). Each state may have its policies and procedures in administering this program. However, if anything, the main objective remains — to provide the affected employee with wage replacement benefits, medical treatment, and vocational rehabilitation.

On the other hand, this program also protects the employer from future litigation and medical expenses as well. Premiums are paid for by the employers and are given to employees as part of their benefits. 

What is Covered under the Workers’ Compensation Program? 

Under the Workers’ Compensation program, as long as the employee is doing his job, his injuries are covered. This is regardless of whether he is offsite or onsite. An example is a mechanic who suffered a burn while doing an “on-call” or off-site job is considered as covered under this program. 

This program also includes injuries sustained through workplace violence, terrorist attacks, and natural disasters. Aside from this, occupational diseases developed overtime from his employment, like carpal tunnel or any subsequent effects from toxic chemical exposure are also included. 

Excluded in this provision are the following scenarios: 

  • Stress or emotional injuries without physical workplace trauma
  • Self-inflicted injuries
  • Injuries incurred from fighting with another employee or horseplay
  • Any injuries sustained while traveling to or from work
  • Injuries incurred while under the influence of an illegal substance while violating company policies or committing a crime

A business owner’s consideration is protecting both his employees and the business. To do this, he should make sure of the following:

  • The company can cover his business with a workers’ compensation policy.
  • All employees are made aware of their rights and responsibilities
  • Information about workers’ compensation has been disseminated through posters in strategic locations around the workplace 

Having established all these premises, both the business owner and his employees should know what to do to help them navigate through the program. 

A 5-Step Guide to Workers’ Compensation Claim Process

Documentation is always a necessity in filing any claim. With an emergency on hand, however, panic may overrule common sense and this important step may altogether be forgotten. Both the employer and the worker should follow this requirement on time, otherwise, the claim may fail approval. The worst thing that can happen is the employer getting sued for the worker’s missed benefits. To protect both, below is a guide to consider.

Step 1: Report the injury. 

Ironic it may be, but this benefit is only applicable if there is an involved incident or accident at work. This is the reason why both parties need to be vigilant in ensuring that it should not be abused and misused.

What an injured employee should do once an incident occurs at work is to immediately go to a healthcare professional for assessment and treatment. Insurers often have a network of healthcare providers for their clients to receive their benefits. Business owners should be vigilant in keeping a record of this and provide a copy of this to their employees. 

For immediate diagnosis and treatment in emergencies, companions of the injured employee should just take him to the nearest emergency room instead of looking for the accredited healthcare provider. Some states allow treatment with the patient’s choice of a healthcare provider, while others are strict with just using the services from the insurer’s network.

The rule of thumb is to report the incident immediately to their employer or HR in-charge to facilitate documentation. 

Step 2: File the Incident Report. 

In emergency situations, top of mind should be the injured person’s welfare first and foremost. Then documentation for filing the claim should start already. The injured employee’s supervisor or manager gathers all these documents and submits them to their employer or Human Resources within the prescribed period. This includes:

Company details: business name, account number, location, and policy number

Employee details: full name, date of birth, address, phone number, Social Security number, age, gender, beneficiary, etc.

4W1H of the incident:

  • (When) date and time the incident occurred,
  • (What) type of injury suffered, exact body part injured
  • (How) situation
  • (Why) official diagnosis and medical report (preferably an accredited physician or medical practitioner)
  • (Who) witness and victim’s report.

It is also better if there is another supporting proof or evidence like pictures of the incident.  

 As a best practice, companies would do well with some ready form or checklist which supervisors or managers can use when filing these reports. If physically possible, the employee should also sign this report before submission. 

Step 3: Filing of the Official Insurance Claim

Once the written reports and supporting documents are gathered, the company’s HR Department files an official claim on behalf of the injured employee. It will be passed to the claims administrator and the corresponding Workers’ Compensation Agency Office (WCAO) of the state for processing the claim.

The timeframe to file the report differs per state. The norm is usually one and three years from the date of injury or death. An example of this is the state of Colorado. Written reports must be submitted within four days after the incident or lose one-day compensation for each day of delay. Earlier the report is filed, the better. Below is a chart to help employers check the deadlines of filing the workers’ compensation claim per state.

States Deadlines in Filing Workers’ Compensation Claims

StateSubmitting a Written Report to the Employer*Filing a Workers’ Compensation Claim with the Insurer**State Statute and Agency Resource Links
Alabama5 days of injury and 90 days of the accident2 yearsAlabama Guide to Benefits and Claims Filing and Alabama Workers’ Compensation Law (Alabama Code Title 25, Section 5)
Alaska30 days2 yearsAlaska Workers’ Compensation and You and Alaska Statutes Section 23.30.105
ArizonaAs soon as possible1 yearIndustrial Commission of Arizona Claims Division – Filing a Claim and Arizona Workers’ Compensation Law (Arizona Statutes Title 23, Section 901)
ArkansasASAP2 yearsArkansas Workers’ Compensation Questions & Answers and Arkansas Workers’ Compensation Law (Arkansas Code Annotated Title 11, Chapter 9)
California30 days1 yearCalifornia Department of Industrial Relations, Workers’ Compensation and California Workers’ Compensation Law (California Labor Code Division 4, Sections 3200-6002)
Colorado4 days (to maintain full benefits eligibility)2 yearsColorado Workers’ Compensation – FAQs for Injured Workers and Colorado Workers’ Compensation Law (Colorado Statutes Title 8, Articles 14.5, 40-47, 55, 67)
ConnecticutAs soon as possible1 year (3 years for occupational illnesses)Connecticut Workers’ Compensation Commission Information Packet and Connecticut Workers’ Compensation Law (Connecticut Statutes Chapter 568)
DelawareAs soon as possible2 yearsDelaware Division of Industrial Affairs – Frequently Asked Questions and Delaware Workers’ Compensation Law (Delaware Code Title 19, Chapter 23)
Florida30 days2 yearsFlorida Division of Workers’ Compensation – How to Report an Injury and Florida Workers’ Compensation Law (Florida Statutes Title XXXI, Chapter 440)
Georgia30 days1 yearGeorgia State Board of Workers’ Compensation – FAQs and Georgia Workers’ Compensation Law (Georgia Code Title 34, Chapter 9)
HawaiiAs soon as possible5 years (and within 2 years of manifestation of symptoms)Hawaii Disability Compensation Division – About Workers’ Compensation and Hawaii Workers’ Compensation Law (Hawaii Administrative Rules, various sections)
Idaho60 daysNoneIdaho Industrial Commission – Injured Worker FAQs and Idaho Workers’ Compensation Law (Idaho Statutes Title 72)
Illinois45 days3 yearsIllinois Workers’ Compensation Commission and Illinois Workers’ Compensation Law (820 Illinois Compiled Statutes (ILCS) 305)
Indiana30 days2 yearsWorker’s Compensation Board of Indiana – Who is Eligible? and Indiana Workers’ Compensation Law (Indiana Code Title 22, Article 3)
Iowa90 days2 yearsIowa Guide to Workers’ Compensation and Iowa Workers’ Compensation Law (Iowa Code Chapter 85)
Kansas200 days200 daysWorkers Compensation Information for Kansas Employers and Employees and Kansas Workers’ Compensation Law (Kansas Statutes Chapter 44, Article 5)
KentuckyAs soon as possible2 yearsKentucky Workers’ Compensation Law (Kentucky Revised Statutes Chapter 342)
Louisiana30 days1 year (up to 2 years for the non-immediate onset of disability)Louisiana Workers’ Compensation Law (Louisiana Revised Statutes Chapter 23, Section 1020 et seq.)
Maine30 days2 yearsMaine Office of Workers’ Compensation – Other Questions with Answers and Facts about Maine’s Workers’ Compensation Law
Maryland 10 days2 years (1 year following the discovery of occupational illness)Maryland Workers’ Compensation Commission and Maryland Workers’ Compensation Law (Maryland Annotated Code Labor and Employment Article, Title 9)
MassachusettsAs soon as possible4 years from discovery or causationMass.gov – Check Eligibility for Workers’ Compensation Benefits and Massachusetts Workers’ Compensation Law (Massachusetts General Laws Chapter 152)
Michigan90 days2 yearsMichigan Workers’ Compensation Agency and Michigan Workers’ Compensation Law (Michigan Compiled Laws Section 418.301 et seq.)
MinnesotaAs soon as possible6 years (or 3 years from employer filing First Report of Injury)An Employee’s Guide to the Minnesota Workers’ Compensation System and Minnesota Workers’ Compensation Law (Minnesota Statutes Chapter 176)
Mississippi30 days2 yearsMississippi Workers’ Compensation Facts and Mississippi Workers’ Compensation Law (Mississippi Code Title 71, Chapter 3)
Missouri 30 days2 yearsMissouri Department of Labor – Report Your Injury and Missouri Workers’ Compensation Law (Missouri Revised Statutes Title XVIII, Chapter 287)
Montana30 days (1 year for occupational illnesses1 year (or 2 years for latent injury)Montana Department of Labor & Industry – File a Work Comp Claim and Montana Workers’ Compensation Law (Montana Codes Annotated Title 39, Chapter 71)
NebraskaAs soon as possible2 yearsNebraska Department of Insurance – Workers’ Compensation and Nebraska Workers’ Compensation Law (Nebraska Revised Statutes Chapter 48)
Nevada7 days90 days from injury or discovery of occupational illnessNevada Workers’ Compensation Claims Processing Time Frames and Nevada Workers’ Compensation Law (Nevada Revised Statutes Chapters 616A-617)
New Hampshire2 years3 yearsNew Hampshire Department of Labor – Timeframe for Filing a Claim and New Hampshire Workers’ Compensation Law (New Hampshire Statutes Chapter 281-A)
New Jersey14 days2 yearsNew Jersey Department of Labor and Workforce Development – Filing a Claim and New Jersey Department of the Treasury – Workers Compensation
New Mexico15 days1 year from claim denialNew Mexico Workers’ Compensation Administration – Notification and New Mexico Workers’ Compensation Law (New Mexico Statutes Chapter 52)
New York30 days2 yearsNew York Workers’ Compensation Board – Understanding the Claims Process and New York Workers’ Compensation Law
North Carolina30 days2 yearsNorth Carolina Industrial Commission and North Carolina Workers’ Compensation Law (North Carolina Statutes Chapter 97)
North Dakota7 days1 year from injury or discoveryNorth Dakota Workforce Safety & Insurance – If You Have an Injured Employee and Filing a Claim
OhioAs soon as possible1 yearOhio Bureau of Workers’ Compensation – Injured Worker FAQs and Ohio Revised Code Section 4123.84(A)
Oklahoma30 days1 year (or 2 years from last exposure for occupational illnesses)Oklahoma Workers’ Compensation Court of Existing Claims – Employee’s FAQ and Oklahoma Workers’ Compensation Law (Oklahoma Statutes Title 85A)
OregonASAP2 yearsOregon State Bar – Workers’ Compensation: What Workers Should Know 
Pennsylvania21 days3 years (or 300 weeks from last exposure for occupational illnesses)Pennsylvania Workers’ Compensation Law (Pennsylvania Workers Compensation Act Sections 101-1608)
Rhode Island30 days2 yearsRhode Island Workers’ Compensation Law (Rhode Island General Laws Title 28)
South Carolina90 days2 yearsSouth Carolina Workers’ Compensation Commission – Information for Employees and South Carolina Workers’ Compensation Law (South Carolina Code of Laws Title 42)
South Dakota3 business days2 yearsSouth Dakota Department of Labor & Regulation – Employer Rights and Responsibilities and South Dakota Workers’ Compensation Law (South Dakota Codified Laws Title 62)
Tennessee15 days1 yearTennessee Workers’ Compensation Law (Tennessee Code Annotated Title 50, Chapter 6)
Texas30 days1 year from injury or discovery of occupational illnessTexas Department of Insurance – Employee Frequently-Asked Questions and Texas Workers’ Compensation Law (Texas Workers’ Compensation Act
Utah180 days1 yearUtah Labor Commission – Employee’s Guide to Workers’ Compensation and Utah Workers’ Compensation Law (Utah Code Title 34A, Chapter 2)
VermontAs soon as possible6 monthsVermont Department of Labor – Workers’ Compensation Claims Filing and Vermont Workers’ Compensation Rules Index
Virginia30 days2 yearsVirginia Workers’ Compensation Commission – Information for Employees and Virginia Workers’ Compensation Commission – Injured Workers
WashingtonAs soon as possible1 year (or 2 years from diagnosis for occupational illnesses)Washington State Department of Labor & Industries – Filing Your Claim
West VirginiaAs soon as possible6 months (or 3 years from discovery or last exposure for occupational illnesses)West Virginia Offices of the Insurance Commissioner – Workers’ Compensation Benefits
Wisconsin30 days2 years (6 years for traumatic injuries and 12 years for occupational illnesses)Wisconsin Department of Workforce Development – Worker’s Compensation Claim Flow and Wisconsin Workers’ Compensation Law (Wisconsin Statutes Chapter 102)
Wyoming72 hours to report the injury to employer, 10 days to file Wyoming Report of Injury1 yearWyoming Injured Worker’s Guide to Reporting an Injury and Wyoming Workers’ Compensation Law (Wyoming Statutes Title 27)

Submitting a Written Report to the Employer (or Human Resources)*

Prescribed deadlines start from the date of the accident or injury. Failure to file the report could result in the denial of workers’ compensation claims. It is possible that some states already made amendments with the list, particularly on report submission extension. It was consolidated in January 2018.

Filing a Workers’ Compensation Claim with the Insurer**

The Workers’ Compensation program “no-fault clause” means the injured employee may file a claim regardless of who is at fault. However, depending on the state administering it, two statutes of limitations is used to validate the claim: 

(1) according to the timeline of the injury or illness incurred, and 

(2) based on the last date on which the employee received compensation or benefits from a previous injury. 

The above list refers to the standard statutes of limitations based on the date of the injury or illness. There are some states which provide longer “discovery” periods for occupational illnesses than others. Employees who are no longer connected with the company at the time of the “discovery”, may use this as an appeal.

(Source: workinjurysource.com)  

Step 4: Conducting an Investigation. 

HR investigation and compensation investigation are not in the same league. Human Resources should make sure the efficient processing of claims to prevent any possible lawsuits against the business. However, filing the claim happens only upon the submission of the written incident report to the Human Resource. Only then can the latter submit it to the claim administrator for processing. 

The Human Resource handles the Interviewing of key witnesses to the incident. This is within the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA) regulations. The insurer and the state workers’ compensation claims board on the other hand handles the compensation investigation.

Unfortunately, it may seem, however, but some people would do claimant fraud schemes to get free money and vacation time. Some of these bogus claims include: 

  • A fake injury
  • An exaggerated injury
  • Misrepresented injury or an injury incurred outside work
  • Using an old injury that did not quite heal

These are other red flags to watch out for: 

  1. There are no witnesses.
  2. Refusal to receive treatment or employee providing a conflicting diagnosis. 
  3. Delay in reporting the incident with no valid explanation.
  4. Inconsistency or suspicious report.
  5. History in making workers’ compensation claims. 
  6. History in changing jobs or medical providers within a limited period.
  7. Timeliness of the incident before or after a weekend, strike, or holiday. 
  8. Timeliness of the incident before termination or expiring contract.
  9. Evidence the employee is moonlighting for a second job at the time of the incident.
  10. The activity done at the time of the incident is almost impossible with their injury (i.e.driving a delivery van with a fractured knee)
  11. The “injured employee” could not be reached or located.
  12. Employing the services of a lawyer upon getting “injured” and/or is pushing for a speedy settlement.

Another red flag is when the employee malingers or delays his return to work because of an apparent “not yet fully healed” condition. Only to be found out later on that he is just stalling so he could do other work while continuously receiving his workers’ compensation

Even with these red flags, employees can not be directly accused of fraud until a thorough investigation is made.

To ensure the veracity of the claim, the Human Resources or employer may use the following points as a guide in the investigation:

  1. Getting the details from the employee himself.

The employee may be asked in detail to describe the accident. The HR as the investigator may also use specific questions to help the employee provide you with details that you could almost visualize the incident.

  1. Describing the location

Ask the employee about the location and condition of the area. Ask whether the floor is wet or if the carpet is not properly plastered on the floor, or there are visible wires or clutters that could cause potential injuries, etc. Getting a clear picture of the location could help identify factors that led to the injury.

  1. Ask for witnesses at the time of the accident

It is ill-fated to be in an accident, most especially if there is no one to assist the injured man. This could spell a life and death situation at worst. Aside from providing immediate assistance to the injured person, a witness can also provide important information about the incident that could help validate the injured employee’s narrative.

  1. Adherence to company protocols

There are big reasons why protocols are being implemented across the company. One of these is to prevent accidents and errors from happening. It normally involves using the right tools and equipment and following certain procedures. Injuries may happen if such are ignored and the erring employees should understand that it is already within their responsibility.

  1. Job description

It is equally important that the employee is acting based on their job description. It must be established that the injury happened while the employee is performing his task within his job description. Otherwise, the claim may get quite complicated once it is found that the injury is incurred while doing a job outside their official duties.

  1. Nature and Scope of the Injury

This information may be sourced from the medical provider who attended to the employee. Most states have accredited healthcare providers, while some states allow the use of private physicians. Both may provide diagnosis, prognosis, treatment plans, and work restrictions to support the investigation. It can be used as a cross-reference and should match with the employee and witness accounts.

  1. Job matching

The investigation is not necessarily meant to discredit the injured employee and prevent him from making a claim. It is a check and balance. This is also used as a mechanism to improve procedures at work.

The Human Resources and the employee’s immediate superior use the treatment plans and work restrictions suggested by the employee’s medical provider to modify his task and help him return to work. (i.e. a receptionist who was injured in a wet floor may be relieved of her front desk duties while she is still in a cast, and given back-office tasks in the meantime)

  1. Prior workers’ compensation claim

Depending on the job description of the injured employee, some may be more hazardous than others. However, it can get quite worrisome if the employee involved has a history of several workers’ compensation claims on his record, has taken it to court, and failed. Numerous failed attempts is a tell-tale sign of trying to fraud the system.

  1. The end in mind

These expectations should be the focus of the investigation: (1) confirm the authenticity of the claim to compensate the person injured; and (2) identify immediately to longer-term solutions that could prevent similar incidents from repeating. Thereby providing a better and safer workplace.

Step 5: Tracking the Employee’s Progress

The ultimate goal of the rehabilitation and medication is to prepare the injured employee to get back into shape and be reintegrated to work again. The Human Resource maintains contact with the employee and plans with him a return to work program, if applicable. This could be in the form of continuous rehabilitation and retraining in case of job displacement. 

If the employee can still go back to work, the doctor-directed medical restrictions must be taken into consideration. He may be given back his old function if he is physically and mentally equipped already to do it.

Otherwise, the employee should be informed about the restrictions suggested by his doctor, as well as the light and modified work that will be offered to him so he could return to work again. It should be communicated clearly with him so the employer can also get his commitment to returning to the workforce.

This works both ways. It is good for the employee’s self-esteem to be back to work even in a limited capacity. For the employer, it can help reduce overhead costs from hiring temporary employees, paying overtime, and even workers’ compensation rates.

In Summary

How can a business benefit from Workers’ Compensation insurance? It can benefit through its 2-part program.  The first part is for the employees’ benefits and the second part is for the employee and business protection.  The first part has five basic benefits:

  • Medical care benefits which are aimed to help employees recover from work-related injury or illness. 
  • Temporary disability benefits which compensate lost wages for employees who are temporarily impaired and are unable to work during recovery
  • Permanent disability benefits are compensation for employees who are permanently impaired or incapacitated to earn a living due to their sustained injuries
  • Supplemental or job displacement benefits (SJDB) is a non-transferable voucher for educational retraining or skill enhancement that is given to the injured employee in case he does not recover completely and could not return to work for his employer anymore.
  • Death benefits are compensation given to the employee’s dependents like the spouse, children, or immediate relative in case of death from work-related injury or illness. 

Given the fourth and fifth benefits, it is evident that not everyone will be able to recover and return to work, whether in full or partial capacity. What is important is the employer can show his employees that he cares enough about their welfare by giving them this benefit. It is also true that the claim may still be denied or accepted depending on the merit of the case, but regardless of the outcome, getting it for the business is already a step ahead. 

The second part of this program serves as a protection for the business and the owner. Without this coverage, an injured employee may sue his employer in court. In cases like this, some states may opt to use their special funds to compensate these injured employees and reimburse it from their employers. These employers could face further criminal charges and pay steeper penalties from their non-compliance of state laws.

As if in irony, this may be more than what they should have spent, if they prioritized getting the coverage first. As they say, “prevention is better than cure.” For more information, check our resources for details.

Contact us and we’ll make help you with more information or the best insurance coverage for you.