If an injured employee has received his or her workers’ compensation settlement, that person may be confused as to how the money can be spent. No one wants to get the money only to discover restrictions that he or she had no idea existed. How can workers’ compensation be spent? Are there restrictions that come attached to the money? We have asked attorney, Alaina Sullivan, and here is what she had to say: What Is Covered Under Workers’ Compensation? Traditionally, workers’ compensation is insurance that reimburses injured workers for the costs of medical expenses and lost wages following a work-related injury. The money received from workers’ compensation does not include money for pain and suffering. If the individual wishes to seek this type of payment, a personal injury law suit would be the best route. However, if an individual pursues workers’ compensation, he or she waives the right to file a personal injury claim against the employer. It also matters what type of benefits are allowed under the state’s given law. Each state has its own set of rules, but for all intents and purposes, the following benefits are available: Temporary disability benefits: These benefits are paid while the person is off of work and still recovering from the injury sustained at work; Permanent disability benefits: These benefits are meant to be compensation for permanent, long-lasting physical disabilities that have been caused from the work-related injury; Medical treatment involves reasonable and necessary medical care for the injuries sustained from the work-related injury; Vocational rehabilitation: These benefits are meant to pay for job training or any other assistance that is needed to help the injured employee find a job within his or her work restrictions; Mileage for travel to and from the injured employee’s doctor’s appointments or any other workers’ compensation-related travel is also included in many states. A more thorough description is listed below for specific categories that are covered under workers’ compensation laws for most states. Reimbursement for Medical Costs and Treatment Workers’ compensation insurance covers costs that an employee incurs when he or she is injured and needs medical attention. These medical costs include trips to the emergency room, ambulance rides and any other medical bills associated with the injury. Lost or Missed Wages If the employee has injured himself or herself while on the job and cannot work for a long period of time, most workers’ compensation laws in all 50 states cover missed wages for that employee while he or she is recovering. Lost wages can actually end up being a pretty hefty expense when it comes to a workers’ compensation claim depending on what the injured worker’s wages were and how long that person will be out of work. A workers’ compensation settlement tends to cover a lump sum, and the employee can technically do whatever he or she wants with that money. However, given the fact that the “lost wages” are meant to cover what the employee would have earned to cover costs of living, it would be advisable for the employee to keep this money to pay for living expenses while he or she recovers instead of using this money to purchase a luxury item. Costs of Ongoing Care Workers’ compensation benefits should also assist in paying for the cost of ongoing care because of the work-related injury. If the employee is going to need surgery, specialist treatment or even rehabilitation, the costs can be included in the workers’ compensation settlement. Death Benefits and Funeral Costs In the event the work-related accident results in an employee death, workers’ compensation insurance can help the deceased employee’s family in paying for the costs of the person’s funeral. In some situations, workers’ compensation benefits will cover death benefits, which include support payments to the surviving dependents of the deceased employee. How is Workers’ Compensation Calculated? Workers’ compensation is a no fault insurance scheme operated by almost all employers, with a few exceptions depending on each individual state’s rules. If an employee covered by workers’ compensation insurance is genuinely injured or becomes sick at work, they are entitled to apply for compensation. The way workers’ compensation is calculated varies a little from state to state, but the two main benefits are loss of wage compensation and payment for all medical treatment. It is most common for wage compensation to be calculated as a percentage of the average wages or other earnings that might have been earned if the employee had been able to be at work. The percentage tends to vary in a tight range around the 66.66% or two thirds figure. For example, if you were injured in a store and earned an hourly wage of $12 an hour, you would expect to be able to claim two thirds of $12 for every hour you are legitimately off work. If you normally work a 36 hour week and have injuries that take two weeks (10 working days) to heal, you would expect to be able to claim $8 x 2 x 36 = $576 for the time off work. WC claims also should take into account any future estimated loss of wages due to long term injuries or disability. The other component is the cost of medical treatment. Insurers will generally accept compensation for the full cost of medical treatment, including estimated future treatment. The main requirements are that you should show that whatever medical treatment you claim for was definitely related to the workplace injuries or sickness. Many, but not all, insurers have their own preferred medical providers. They may insist you use them for all medical services except for immediate emergency treatment. You will need to check this out as a failure to use he preferred provider may mean a denied claim. Most insurers tend to have a good idea of what a legitimate claim should look like. If you overestimate the claim payment or exaggerate the amount, then the insurer may insist on going to court to settle the payment. The easiest way to avoid this delay is to work through a WC attorney. How are Workers’ Compensation Lawyers Paid? Most workers’ compensation attorneys work on a contingency fee basis. This is similar to the way most personal injury attorneys charge fees and, in many cases, attorneys will offer both workers’ compensation and personal injury claim assistance. The way contingency fees work is that the attorney will first discuss your case with you and give an honest professional opinion about the likelihood of the claim succeeding. This is more important for PI claims as unlike workers’ compensation you do need to prove who was at fault. This first consultation is normally provided free. If the attorney believes that you have a good chance of success and is prepared to take your case on, then the legal fee will be deferred until a final settlement. If the claim is denied or is unsuccessful, the attorney will discuss further legal action that is appropriate, such as an appeal. The legal fee is calculated as a percentage of the total claim payment. This varies from attorney to attorney and you should be told what this calculation is when you have your consultation. It tends to be in the range of between 10 and 25% of the total settlement. Why You Should Work with a WC Attorney If you have been injured or become sick because of your job it can be an intimidating experience negotiating with an insurer and you are never sure just how much documentation you need to convince the insurer that your claim is legitimate. A WC attorney will have dealt with many WC cases like yours before and will now whether you have sufficient information to submit with your claim. The attorney will also be able to help provide estimates of future medical treatment if you are injured in such a way that long term treatment is necessary or your disability is permanent. Although you do have to deduct some of the final settlement for legal fees, you are more likely to receive a higher and fairer payment if you work through an experienced attorney. Legal Fees Workers’ compensation insurance can also include legal fees the employee needed to incur to pursue the benefits to begin with. This money will come out of the lump sum the employee receives, or the money could go directly to the attorney as part of the settlement to ensure that the legal fees are properly paid. Contact an Attorney Today If you are in the process of pursuing workers’ compensation and have questions about what is covered in the workers’ compensation claim, an attorney can assist in reviewing the settlement and discussing what is included. An attorney can also listen to the facts of the case and can best advise you on how to proceed. Contact an attorney experienced in workers’ compensation law to schedule a consultation today. Additional Resources How Much Are Workers' Comp Settlements? Can My Workers’ Comp Settlement Pay My Medical Bills?
