Find out why workers’ comp claims are denied or disqualified, and what you can do next if your claim is denied.
Employers in the United States are legally required to provide workers’ compensation insurance for their employees who are hurt at work, with a few exceptions. Most employers purchase workers’ comp from private insurance companies.
Meant to protect workers from financial ruin after a work-related injury, the workers’ compensation system can be a complicated nightmare for workers and their families if the insurer denies their injury claim.
Here we unpack common reasons why a worker’s comp claim might be denied, what you can do to appeal a denied work injury claim, and how a workers’ compensation case should work.
Common Reasons for Worker’s Comp Claim Denials
While each state has different workers’ compensation rules and forms, no matter where you work there will be deadlines and requirements that the insurance company can use to deny your claim.
The initial denial of a claim is a major issue in workers’ comp cases. Insurance companies are motivated to keep costs as low as possible. They scrutinize claims for opportunities to deny or reduce benefits.
These are some of the most common reasons your workers’ comp claim can be rejected:
1. You Aren’t a Qualified Employee
Some workers may not be eligible for workers’ compensation.
Commonly disqualified workers include:
- Independent contractors
- Farm workers
- Seasonal workers
- Domestic workers like babysitters or housekeepers
- Undocumented workers
Worker’ compensation law varies by state. For example, California labor laws don’t exempt some domestic workers or independent contractors.
2. Failure to Promptly Notify Your Employer of Your Injury
You must immediately (or as soon as reasonably possible) notify your employer of your injury. Under your workers’ comp insurance coverage, your claim doesn’t begin until you report your injury to your employer. While each state has different time limitations, it’s usually about 30 days.
3. Missed Workers’ Comp Claim Filing Deadline
Reporting your injury and filing your claim are two different actions. There is a legal deadline for filing your workers’ comp claim, called the Statute of Limitations period.
Missing that filing deadline is grounds for denying your claim.
4. You Weren’t Hurt on the Job
To qualify for workers’ comp, your injury must happen while performing your work duties on your employer’s job site, or off-site while working on an assignment from your employer or supervisor.
If your injury occurs before or after normal work hours, or during a lunch break, your injury may not be covered.
For example, if you sprain your ankle while walking to a deli to pick up lunch for yourself or your coworkers, your claim will probably be denied. However, if you were sent to the deli by your boss to pick up lunch for a client meeting, your injury should be covered.
5. You Were Under the Influence When Injured
Regardless of how hard you work, how long you’ve been employed, or what type of work you’re doing, if you are under the influence of drugs or alcohol when you’re injured, expect your claim to be denied.
Technically, you don’t have to be fall-down drunk. If proof exists that self-ingested illegal narcotics or alcohol are even a small factor in your injury, your claim will probably be denied.
Even if you are under the influence of prescribed medications at the time of your injury, your claim may be denied.
6. Your Employer Disputes Your Injury Claim
An employer may dispute your claim by arguing that your injury is a non-work related pre-existing condition, it occurred outside of the scope of your employment, while engaged in horseplay or other activities outside of company policy, or that you’re faking your injury.
As an employee, you are responsible for proving why workers’ compensation should cover your injury.
7. Your Medical Condition Isn’t Covered
Some states don’t require workers’ compensation to cover soft-tissue injuries like a simple back strain or repetitive motion injuries, even if the sprain or strain makes you miss several days of work.
When it comes to non-physical injuries, most workers’ comp insurance claims based on a mental health issue are denied initially. To be covered, you must be able to link your mental health issues to a specific event, such as a trauma you experienced while working.
Some states cover psychiatric injuries from specific events, such as post-traumatic stress disorder (PTSD). Even conditions arising over time, such as depression and severe anxiety, may be covered.
It’s not easy to convince an insurance company your job duties caused your mental health issues. You’ll need strong medical evidence, like detailed medical examination records from a licensed psychiatrist.
8. Your Injuries Aren’t Serious Enough for Coverage
What you think is a bad injury may not be considered as serious by your employer or the insurance company. Your injury must limit or fully prohibit you from completing your job duties, and you need to have received treatment for your injury.
You may injure your back while loading boxes, but if the pain is only temporary, your claim will likely be denied. Even if you believe your injury is debilitating, you won’t convince the insurance company unless you have a doctor’s opinion to back you up.
9. You Were Fired or Laid Off
The insurance company will almost certainly deny a workers’ comp claim filed after you’ve been fired or laid off. You’ll have a hard time convincing the insurance company, or anyone else, that you’re not just trying to stick it to your former employer.
If you’ve been out on workers’ comp and the doctor has cleared you to return to work, you have to go back or risk losing your job and your workers’ comp benefits. You’ll need another doctor’s opinion to prove you are not yet ready to return to work.
On the other hand, it’s illegal to fire a worker for reporting an injury or filing a workers’ compensation claim.
If this has happened to you, the employer’s actions are likely in violation of state and federal laws, meaning you may have grounds for filing a third-party lawsuit against your former employer, in addition to workers’ compensation.
Appealing a Denied Workers’ Comp Claim
Having your claim denied can be frustrating, but it doesn’t have to end there. You have a right to dispute and appeal the claim denial.
The denial letter you receive should include an explanation of your workers’ comp insurance coverage, when and how you can appeal the decision to deny your claim, and notification of the deadline for filing your appeal. State deadlines are usually between 30 to 90 days.
Missing the filing deadline for your appeal can end any possibility of getting compensation.
If you have reliable evidence that your claim was denied as a result of fraud, administrative error, or other irregularity, you can contact your workers’ compensation administrative office to request a complaint form.
Each state has its own forms and complaint process. If your complaint has legal merit, it may support your case and influence the amount of your settlement.
Request an Administrative Hearing
The insurance company is in no hurry to hand out money or benefits. Your claim may be denied up front. If your claim is accepted, you may have to dispute decisions made by the insurance company when it comes to your weekly wage benefit, ability to return to work, vocational training, permanent disability settlement, or more.
If you disagree with the insurance company’s decision on your worker’s comp claim, you can request an Administrative Hearing before the workers’ compensation appeals board.
Requesting an Administrative Hearing takes the decision out of the insurance company’s hands and places it in the hands of an administrative judge.
You’ll need to be ready to argue your case, cite the relevant employment laws, and showcase your medical records in support of your claim.
Formally request copies of your employer’s files, your medical files, and the insurance company’s claim file. Your request may be denied without a subpoena.
If you haven’t consulted a worker’s comp attorney by this point, now’s the time. You can be sure the insurance company will send their attorney to the hearing to argue against you.
Most workers can file their initial claim on their own. However, when your claim is being unnecessarily delayed, your benefits are cut, or your claim has been unfairly denied, you’ll need expert legal advice.
You will also need an attorney if your workers’ comp claim is under investigation.
Most workers’ comp lawyers offer a free consultation, and most state laws limit attorney fees.
Reopening a Workers’ Comp Claim
Reopening a workers’ comp claim is altogether different from appealing a denied claim.
Common reasons to reopen a previously closed workers’ comp claim:
- Your injury has returned, worsened, or become aggravated.
- The lighter alternate job duties or job no longer exist.
- New evidence is found proving your injury claim.
- New evidence shows the compensation award was inadequate or unjust.
- A legal or administrative error caused an unfair result.
- Fraud is discovered.
Each state sets time limitations for filing a request to reopen a claim. They can range from three to seven years from the date of your original claim denial – not the date of your original injury.
Some cases are considered closed when full and final payment is made to you, and a release is signed. In these cases, neither you nor your insurance company can reopen the claim.
The process of reopening a denied claim varies from state to state. It usually requires filing an application with the workers’ compensation board or commission in your area. Contact them and request the appropriate form and instructions to reopen your claim.
Be sure to follow the rules set out in the application form. You must state the reason for your request and provide supporting documentation. You may need to include a copy of your denial letter. For example, if your injury has worsened since you filed your original claim, send in a new medical evaluation diagnosing your condition and connecting it to the work event which was the basis of your original claim.
Although legally possible, reopening a previously closed workers’ comp claim is extremely difficult. Most workers’ compensation commissions are already overloaded with claims and will look for any reason to refuse your request.
Most state laws grant workers’ comp appellate judges great discretion in setting the statute of limitations period. Generally, judges define the statutory periods in favor of the claimant, especially when it has technically expired.
The nature of many injuries makes determining the onset of an aggravation or worsening of a previous injury tough to establish.
Insurance companies always oppose reopening old claims, especially when there’s a chance they will have to pay not only the claim but also compensate you retroactively.
How Workers’ Comp Is Supposed to Work
Assuming you’ve been injured on the job by a company that carries workers’ compensation insurance, taking the right steps, in the right order will preserve your legal rights to workers’ compensation benefits for lost wages and medical care.
Notify management immediately after an on-the-job injury. The sooner you notify your employer, the better it will be for you in the long run. If you’re rushed to the hospital with serious injuries, notify your employer as soon as your condition stabilizes.
Your employer should have a claim form for you to complete. If you’re too badly hurt to complete the claim form, have someone you trust complete the form for you.
Fill out the claim form completely, accurately, and without exaggeration. Keep a copy of the form for your records.
Shortly after submitting your claim form, a representative from your employer’s insurance carrier will contact you.
You may be asked to give a recorded statement, either on the phone or in person. The worker’s comp adjuster may try to trick you into saying something that will undermine your claim.
Depending on your state’s rules, after a week or two, you should be eligible for wage replacement benefits. You will typically receive about two-thirds of your base pay, up to the maximum weekly amount allowed for your location.
Since workers’ comp wages benefits aren’t subject to federal taxes, many workers end up getting an amount close to their regular take-home pay.
Continue your medical treatment until your treating physician clears you to return to work. Your workers’ compensation doctor will likely be recommended by your employer or your employer’s insurance company.
Seriously injured workers may never recover enough from their injuries to go back to work, or to return to their old jobs. Injured workers who suffer total or partial permanent disability will often be awarded a financial settlement toward future wage loss and offered vocational services.
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