It’s natural to worry about lost wages and medical bills if you’re hurt on the job. Here’s a guide to what workers’ compensation covers and what it doesn’t.
Most employers in the United States are required to carry some type of workers’ compensation coverage (“workers’ comp”) to cover workers who’ve suffered a job-related illness or injury.¹
Workers’ comp insurance is a type of no-fault insurance for on-the-job injuries that makes it easier for injured workers to get immediate benefits during recovery, without having to prove their employer was negligent.
Equally important, workers’ comp covers a portion of the injured worker’s wages until the person can return to work.
If a worker suffers a fatal work-related injury or illness, death benefits will be paid to the family.
What Workers’ Compensation Insurance Covers
Your employer’s workers’ comp insurance covers expenses directly related to a workplace injury, including medical treatment and rehabilitation, partial wage replacement, and occasionally, vocational training.
However, workers’ comp doesn’t cover every loss an injured employee might incur. Most notably, it does not offer compensation for pain and suffering.
Coverage You Can Expect from Worker’s Comp
Workers’ compensation benefits include:
- Medical Benefits: Pays for medical care and testing, medications, assistive equipment, and physical therapy, and sometimes mileage reimbursement for travel to medical appointments.
- Disability Wage Replacement: Depending on the severity of injuries, the worker will be paid wage benefits categorized as Temporary Partial Disability, Temporary Total Disability, Permanent Partial Disability, or Permanent Total Disability.
- Disability Lump-Sum: Injured workers who suffer a permanent full or partial loss of use of a body part or function may be awarded a lump-sum amount based on a medically-determined impairment rating.
- Vocation Training: Workers who are medically unable to return to the type of job they had before the injury may be offered vocational support to help get them back to work in a job that meets their physical limitations.
- Death Benefits: When a worker is fatally injured on the job, the family will be extended financial benefits to help with burial expenses and some replacement of the deceased worker’s wages.
Examples of Workers’ Compensation Claims
Workers’ compensation insurance is intended to benefit workers who suffer sudden work-related injuries as well as occupational illnesses caused by long-term exposure to workplace hazards or work activities.
Traumatic workplace injuries include:
- Slip and fall injuries
- Back sprains and strains
- Amputations or crushing injuries caused by machinery
Well-known occupational diseases include:
Some workplace injuries, like industrial accidents caused by defective tools or malfunctioning machinery, may involve parties other than the employer.
If another party besides your employer is liable for your injury, talk to an attorney to discuss making a potential third-party injury claim in addition to your workers’ comp claim.
Workers’ Comp Won’t Cover All Damages
While it’s easy for most injured workers to get workers’ comp benefits, there are trade-offs involved, sometimes called a “compensation bargain.” That means workers face some limitations under the workers’ compensation insurance system.
Limitations of Workers’ Comp:
- Financial compensation is limited to partial wages and approved medical costs.
- The worker may be limited in choosing medical providers.
- There is no compensation for the worker’s pain and suffering.
- In most cases, the injured worker cannot sue their employer.
Workers’ comp won’t cover the cost of replacement services you might need because of incapacitation, like hiring someone to mow your lawn or clean your home. Also, your loved ones cannot make any loss of consortium claims based on your work injury.
Injuries Not Covered by Workers’ Comp
Workers’ compensation insurance won’t cover injuries or illness for otherwise eligible employees if the employee was hurt while commuting to and from work, and other more serious circumstances.
Workers’ comp won’t pay for injuries caused by:
- Illegal activities
- Drug or alcohol use
- Intentional acts
- Violations to company policy
- Engaging in horseplay
Medical and Rehab Benefits for Workers
When you’ve been hurt on the job, workers’ compensation benefits should cover the cost of your medical treatment and therapy expenses.
Using Approved Medical Providers
The workers’ comp plan where you work might require you to be treated by medical providers approved by the plan. Be sure to ask if you can choose your own doctor.
Injured workers must have an initial medical evaluation by an approved provider before the plan’s deadline. Depending on your state rules, the deadline can range from 30 to 90 days after the injury date.
If you don’t get a qualified medical evaluation before the deadline, you may lose your right to continue your claim.
After you’ve been evaluated by an insurer-approved doctor, you may choose to get an independent medical opinion from your own doctor.
You might have to pay the costs out of your own pocket, although in some states you can ask to be reimbursed for the second opinion before your claim is closed.
Get copies of your medical records, including bills, test results, and doctor’s notes, and submit a copy to the workers’ comp insurance company.
Rehabilitation Options to Get You Back to Work
Most workers’ compensation laws provide injured employees the right to physical and vocational rehabilitation.
Physical rehabilitation covers medical and therapeutic care.
This includes physical therapy to assist in coping with the effects of your injury and to help you return to your job duties.
Physical therapy benefits cover the cost of licensed physical therapists, massage therapists, and others certified to assist with the healing process.
Vocational rehabilitation helps get you ready to take on a new job with your current employer or find a new job elsewhere. Vocational rehabilitation coverage varies from state to state and may include:
- Retraining for a different type of job within the company
- Education and tuition payments for retraining
- Résumé and employment application assistance
- Assistance in searching for a new job with another company
- Specialized testing to determine if you have skills for a new career
- Counseling about your employment expectations and qualifications
Calculating Your Wage Replacement Benefits
Most workers’ compensation plans pay an injured worker approximately 66 percent (two-thirds) of their normal weekly wages, but there are limits. Typically, your wage benefit is calculated using the amounts you earned for the previous 52 weeks. Each state has a different formula for calculating the weekly wage benefit.
Your earnings for the prior 52 weeks should be based on your gross income (before taxes and deductions), not your take-home pay. Also be sure to include overtime, bonuses, tips, and other financial compensation from your employer, such as a weekly gas allowance.
Make sure you verify the calculations made by the workers’ comp insurance company. Incorrect wage calculations are the most common mistake made in workers’ comp cases, and the mistakes are almost never in favor of the injured worker.
Find out your maximum weekly wage benefit with this SSA Chart of States’ Maximum Workers’ Compensation Benefits.
Benefit amounts can differ dramatically from one state to the next. Be sure your wage benefits are calculated correctly, based on the state where your employer is located.
For example, a construction worker who lives in West Virginia may work for an Ohio-based builder. The maximum weekly wage benefit for Ohio workers’ comp is over $100 more per week than in West Virginia.
Fortunately, the weekly wage benefit for most workers is not subject to federal taxes.
Workers’ Comp Disability Benefits
How long you can expect to receive weekly wages from workers’ comp depends on your injury and your category of disability.
Disability categories can be total or partial, and temporary or permanent.
Definition of Worker Disability Categories
Temporary Total Disability completely prevents you from working for a limited amount of time.
Temporary Partial Disability prevents you from doing some, but not all, of your job duties for a limited amount of time.
Permanent Total Disability prevents you from ever returning to work, whether for your current employer or another employer.
Permanent Partial Disability is a permanent injury that partially impairs your ability to work.
Injured workers have the right to dispute or appeal workers’ comp benefit decisions about their level of disability, medical care, or weekly wage calculations.
Workers’ Compensation and Social Security Disability
Injured workers can receive workers’ compensation and federal Social Security Disability Income (SSDI) at the same time, but there will be some offsets made to the total amount you’ll be eligible to receive.
For more information, read the Social Security Administration’s publication How Workers’ Compensation and Other Disability Payments May Affect Your Benefits.
Workers’ Compensation Death Benefits
Most workers’ comp state laws include death benefits when an employee dies from an on-the-job injury. The total amount varies from state to state and often includes funeral costs.
Workers’ compensation death benefits are paid to surviving family members, usually those who depended on the worker’s income.
In some states, if the worker had no family, the death benefits are paid to the worker’s estate.
Employee Eligibility for Workers’ Comp Coverage
Workers’ compensation rules are different from state to state. The rules for your state will specify when workers are eligible for compensation, the types of injuries or illnesses that may be covered, and the amount and duration of wage replacement benefits.
Your workers’ comp rules will depend on the state where you work. Find yours with this U.S. Department of Labor map of State Worker’s Compensation Offices.
Almost every state has a deadline for reporting a work-related injury and filing a workers’ comp claim. If you miss the deadline, your claim will automatically be denied.
No matter where you live and work, be sure to notify your employer as soon as possible after you’ve been injured, or as soon as you find out you have a job-related health problem.
Not all employers are required to carry a workers’ compensation policy. Depending on the state, small business owners with a limited number of employees are excused from having to provide workers’ compensation coverage or healthcare benefits.
On the other hand, some companies have enough assets to provide intra-company insurance with benefits equal to, or better than those provided under the state’s workers’ compensation laws. These companies are referred to as “self-insured.”
Who Is Not Eligible for Workers’ Comp?
Federal workers will not be eligible for traditional state-mandated workers’ compensation. However, federal and postal service employees are covered for work-related injuries and illness through the Division of Federal Employees’ Compensation.
Most states exempt certain types of workers from eligibility for workers’ compensation. The most common categories of workers who are not covered by workers’ comp are:
- Independent contractors
- Seasonal workers
- Domestic workers in private homes
- Farm workers
- Temporary or agency workers
- Undocumented workers
While some workers may not be eligible for workers’ compensation benefits, they may be able to pursue compensation through the employer’s business insurance or liability insurance policy.
Exceptions to the Exceptions
Be sure to check your state’s guidelines for eligibility. Every state is different.
Most volunteers won’t be able to get workers’ comp benefits, but many states do provide job-related injury coverage to volunteer firefighters.
Are you really an independent contractor? It depends. If your employer dictates the hours and place of your work, you may qualify as an “employee” for workers’ comp eligibility.
Some states, like California and Texas, require employers to provide workers’ compensation benefits to seasonal or migrant workers, including undocumented workers.
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