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Workers Compensation 101

Workers compensation is a no-fault system of benefits provided by law to most workers who have job-related injuries. In exchange for the no-fault system, employees give up their right to sue their employer directly for negligence. Each state has and administers its own workers compensation law.

The law will require most employers to obtain workers compensation insurance or permission to self insure. Other requirements include posting notice in the workplace explaining workers rights under the law and listing the insurance carrier, not passing the cost of the insurance on to the employees, and not discriminating against those who file a claim.

There are three key workers compensation benefits: medical, lost wages, and permanent partial disability.

Medical care that is reasonable and necessary to treat the injury is covered. This could include first aid, emergency care, surgery, and physical therapy. The injured worker is not required to pay co-payments or deductibles. The covered reasonable and necessary charges are paid directly to the medical provider by the employer or the insurance carrier.

Lost wages or temporary total disability (TTD) are paid for the time period the employee is unable to return to work as indicated by a doctor. All states have a waiting period or required number of days off before TTD is owed. Further, the TTD benefit is typically 66 2/3% of the employee’s average weekly wages, subject to minimum and maximum limits allowed per state law.

Permanent partial disability (PPD) is a bit more complicated. It varies greatly based on the type of injury, recovery time, and the laws of the state where the accident took place. A PPD determination is usually not made until an employee has reached medical maximum improvement for the injury. In Illinois, when employees are unable to do things they were able to do before the injury, they can be entitled to this benefit.

It should be noted that not all workplace accidents and injuries result in or guarantee all three benefits. An employee can sustain an injury that results in just medical benefits or one that results in both medical and TTD benefits but not PPD benefits.

Most states have detailed websites covering their workers compensation law, and links to a few are below.

Arizona – http://www.ica.state.az.us/
Illinois – http://www.iwcc.il.gov/index.htm
Indiana – http://www.in.gov/wcb/index.htm
Iowa – http://www.iowaworkforce.org/wc/
Wisconsin – http://dwd.wisconsin.gov/wc/

Arron Hampton, CPCU, CWCP, INS
Workers Compensation Claim Manager
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