On average, employers report nearly 2.8 million cases of nonfatal injuries and illnesses among employees annually. Whether it's a slip in the hallway or an equipment malfunction, accidents happen, and taking a proactive approach is crucial in safeguarding your employees and business.
While worker safety programs with regular training and protocols are important, workers’ compensation insurance is one of the most essential tools to utilize. In fact, in every U.S. state except Texas, having workers' compensation insurance is not only best practice but also the law. The consequences of being caught without coverage can lead to severe legal issues for your business, including possible shutdown.
While we can give you a general overview of workers' compensation, it’s crucial to note that every state in the U.S. and Washington D.C. has its own program, each with specific requirements and regulations. This means it's not only a recommendation but it’s also a necessity to check and understand your local laws to protect your business. By doing so, you can ensure full compliance and avoid potential legal issues down the line.
What Is Workers’ Compensation?
Workers’ compensation is a type of insurance that provides comprehensive benefits to workers who become injured or ill on or as a result of the job. This insurance offers quick help to cover medical expenses related to the injury, rehabilitation costs, and lost wages during the period an employee is unable to work.
While regulations vary by state, employers generally accept liability for work-related injuries and illnesses regardless of fault. In return, employees receive prompt and guaranteed compensation for their injuries while giving up the right to sue their employer for negligence. This system not only protects your employees but also provides a safety net for your business, ensuring that you can continue operations even in the face of unexpected accidents or illnesses.
What Does Workers' Compensation Cover?
Workers’ compensation can cover a variety of needs, including salary replacement. Salary replacement can be particularly helpful when an employee needs to take a significant amount of time off work. However, typically, it covers less than an employee's full salary, usually around two-thirds.
In addition, workers’ compensation can include the following:
- Medical expense coverage: Most plans provide reimbursement for health care costs, including, but not limited to, emergency room visits, surgical procedures, and medication.
- Continuous support: Should an injury or illness require long-term care, such as occupational or physical therapy, due to a work-related incident, workers' compensation may cover these needs.
- Repetitive stress injuries: Conditions such as carpal tunnel syndrome, often seen in employees involved in continuous typing, develop over months or even years. Most workers' compensation will cover injuries or conditions resulting from repetitive tasks.
- Disability assistance: In cases where an injury permanently incapacitates an employee, workers' compensation offers financial support similar to wage replacement. Both disability assistance and salary replacement help cover medical expenses and compensate for lost wages. The difference is salary replacement is for employees who can return to work after healing, and disability assistance is for those unable to resume their roles.
- Benefits for survivors: In the unfortunate event of an employee's death from a work-related injury or illness, workers' compensation provides financial assistance to the dependents and may also cover funeral expenses.
Employer Responsibilities
As an employer, you’re responsible for providing adequate and compliant coverage for your team. When looking into your coverage options, there are several factors to consider, including which industry you work in. Sectors known for their high-risk environments, such as manufacturing or nursing, typically require more comprehensive coverage and are subject to higher premiums compared to other industries. In addition, it’s important to consider how many employees you have and what you are legally required to provide based on your state.
Your legal obligations extend beyond just providing insurance; you’re responsible for accurately documenting and reporting incidents. In the event of a workplace injury, your first responsibility is to ensure the injured employee receives necessary medical attention. This may involve calling emergency services for severe injuries or providing transportation to a medical facility for evaluation and treatment.
Once your employee has received medical attention, it's crucial to document the incident thoroughly. This documentation should include details about how the injury occurred, the nature of the injury, and the time and place of the incident. All this information should be included in the First Report of Injury (FROI) and sent to your claims representative. In most cases, this needs to be done within 24 hours of the incident or from when an employee seeks medical attention. Failure to do so will result in substantial fines and leave your business open to lawsuits from the injured employee.
Workers’ compensation can get expensive, especially if you’re in a high-risk industry. Creating a culture where safety is a priority and claims management is taken seriously is crucial to combat costs and prevent injuries
Protect Your Business With GMS
Workers’ compensation can be a costly expense, especially for small businesses. Partnering with a professional employer organization (PEO) like GMS can help save money and prevent your workers from being injured on the job. At GMS, we approach workers' compensation in two ways: cost containment and loss prevention.
Cost containment
You may not be a Fortune 500 company, but when you partner with GMS, you'll gain access to a risk management team that gives you Fortune 500 service. We do this by minimizing your exposure, helping you keep records, and completing other crucial best practices that keep your business compliant with OSHA.
Loss prevention
Our loss prevention strategies include risk assessments, safety training, the development of safety manuals and guidelines, workplace inspections, and OSHA compliance. GMS will work with you to reduce the risk of workplace accidents so that your business has fewer, less severe claims over time. If an incident does occur our partnership with CarivaCare provides our clients with 24/7 access to a workers' compensation nurse triage program. This program offers employees a neutral, third-party medical professional to report any injuries on the job.
Contact us today, and let us help you offer your employees the best coverage while saving your company time and money.