What is Workers' Compensation and How Does it Work
Workers' compensation is a type of insurance that is a legally mandated for countless American businesses. Workers' compensation, also known as workers' comp, is program which provides medical benefits to injured workers who sustained an injury, or became ill, while on the job. The workers' compensation system currently covers over 124 million workers nationwide. To make up for medical costs that your regular insurance provider will not cover, and lost wages you will not be able to earn, most businesses carry this to assist you while out of work. In order to maintain HIPPA, the provider will use a claims administration software so all parties have access while protecting your rights as the patient.
This type of insurance usually covers injury or illness caused by the work environment, which can include loss of limbs, repetitive motion injuries, and permanent impairment. Workman's compensation will cover medical treatments, as long as it's in the workers' compensation database, rehabilitation services, and your lost wages that have been recorded by your company in the benefits administration software. Death and liability insurance will be filled out differently, however; once the data is entered into the claims administration software, you are eligible for coverage. Workers' comp provides you with coverage regardless of who is to blame -- whether it be the employee, the employer, co-workers and/or customers.
While you might assume providing this type of coverage would be to the detriment of a business owner, workers' compensation insurance can actually quite literally shield you from litigation should an employee become injured or sick due to job site conditions or accidents. Every state is legally required to enforce that the companies carry workers' compensation insurance, either through the private sector or the state. The business can decide to be self-insured, but each state has various regulations pertaining to certain industries regarding what is covered under the insurance and how situations are assessed. With everything located in the claims administration software, the ways in which medical care is directed and given, as well as the magnitude of benefits each employee can receive, is determined by your state's regulations.
Failure to proceed with these required processes for your insurance coverage will result in your business paying out of pocket for benefits, as well as penalties and fees that are levied by the state. The financial strain for workers' compensation insurance will differ depending on the provider. Any businesses premiums can also be either increased or decreased depending on the number of claims filed each fiscal year. Business owners can reduce claims that decrease their premiums by assessing the safety of the work environment, creating a safe workplace, getting injured employees back to work faster, and starting an employee wellness program.
Now that you know a bit more about what's expected of you as a business owner and how your compliance with workers' compensation regulations can positively impact your operations, you'll need a reliable system that can track and maintain necessary records. To learn more about our claims administration software and how it can streamline your company, please contact us today.