How and When Workers’ Compensation Benefits Are Paid

The workers’ compensation system is designed to help employees when they get injured at work.  Employees will be entitled to receive a variety of different type of payments, including temporary disability, permanent disability, and medical costs.  Understanding when and how these payments are made can be immensely helpful to getting a better grasp to how the workers’ compensation system works.

Temporary disability is either temporary total disability, i.e. when the employee is not able to work at all during recovery, or temporary partial disability, meaning the employee can work, but not work a full schedule while recovering.  Temporary disability payments are two thirds of the gross wages the employee receives, although there is a cap set by state law.  The temporary disability payments begin after the employee’s medical provider determines that the employee is unable to work for at least three days.  Payments are made directly to the employee, and are made every two weeks.

Permanent disability means that the employee has a lasting disability that permanently reduces the employee’s earning capacity.  The employee may be entitled to permanent disability payments even if he or she is able to return to work.  After a doctor determines that an employee’s injury has become “permanent and stationary,” meaning the employee’s injury has reached the maximum level of recovery, the amount of permanent disability must be determined according to very particular formulas.  The percentage of permanent disability will be converted to a specific dollar amount, based on average weekly rages at the time of the injury.  The permanent disability payments are made directly to the employee, and must be paid within fourteen days after temporary disability payments end.

Medical payments are typically handled directly between the health care provider and the workers’ compensation insurance company.  The medical provider will bill the workers’ compensation insurance company directly for the cost of medical services and devices.  If the worker’s claim is accepted, the medical provider is not permitted to bill the injured worker for the balance of services rendered if the workers’ compensation insurance company does not provide as much payment as they usually receive.  The employee will only receive copies of the bills from the medical provider if he or she specifically requests to receive them.

The timing and method of workers’ compensation payments can seem overwhelming.  Call us today at (714) 516-8188 and let us help you understand the system.

Types of Benefits Awarded

Workers’ compensation provides a safety net that is often essential to the financial stability of employees who have sustained work-related injuries. Workers’ compensation allows an employee to receive benefits from his or her employer or the employer’s insurance carrier in order to cover the medical costs or living expenses. To this end, employers are required to carry workers’ compensation insurance to make sure employees are taken care of. Workers’ compensation in California provides for a variety of different types of benefits, depending on the injury.

Total Temporary Benefits are the type of benefits that are paid when an employee’s work-related injuries are so severe that he or she is completely unable to work, or where the employer is not able to provide accommodations to allow the employee to return to work under necessary temporary restrictions. This type of claim is paid at the rate of two thirds of an employee’s weekly earnings, up to a maximum of $1172.57  in 2017.

Temporary Partial Disability is designed for injured employees who are able to return to work, but not to the extent to which he or she worked before sustaining an injury. For example, if an injured employee is only able to work part-time instead of full-time, he or she may apply for this type of benefit. In such a case, an employee would be entitled to benefits that are proportionate to his or her disability, and he or she would be entitled to two thirds of the difference between what the employee made before the injury and after the injury.

Permanent partial disability is available once an employee has reached the maximum recovery and is able to return to work, but with limitations. The amount of disability paid to the employee is determined according to a statutorily scheduled amount. The length of the disability payments will be determined by the percentage of the disability.

Total permanent disability can also be available, although it is rare. If an employee is completely disabled, such as no longer has the use of arms or legs or has gone blind, then he or she may  receive disability payments for life. Finally, death benefits could potentially be available if an employee dies as the result of a work-related injury.

Workers’ compensation is a vast system, and you need an experienced attorney to walk you through it. I have extensive experience assisting my clients and their business in all stages of workers’ compensation claims. Contact me today at (714) 516-8188 to talk about your options and your business.

Studies on Benefits and Costs of Workers’ Compensation

Over the past several years, workers’ compensation premiums have grown at fast rate, often far outstripping the benefits received. In fact, between 2010 and 2014, the cost of workers’ compensation grew much  more than the amount of benefits that were paid out. These costs include not only insurance premiums, but also administrative costs and reimbursement. In 2014, the ratio for benefits received to dollar paid in, was .68 to every dollar. This was down from 2010, when the benefits received were .81 to every dollar paid. In California, the amount paid by employers went up dramatically during that time, by approximately .32 on the dollar, placing California in second place for the increase.

The rising cost of medical care in the United States now represents the lion’s share of the use of the benefits paid out by workers’ compensation insurance. This cost has consistently risen, with the medical benefits representing 29% of the benefits paid out in 1980, whereas this was at 50% in 2014. For a more state specific view, in 32 states, medical costs represents a majority of the benefits paid by workers’ compensation insurance. In California, medical costs in workers’ compensation claims represented 57.7% of the benefits paid out.

This study looked to two potentially contributing factors to the decline in benefits received from workers’ compensation insurance. The study recognizes that there has been a decline in work-related injury, which is a trend which continues. Moreover, the study also specifically recognizes the changes in state specific workers’ compensation coverage requirements. Some states provide fewer protections for workers, which leads a reduction in the number of compensable claims, as well as a reduction in the number of claims filed over all.

Despite the increase of costs of insurance to employers, between 2010 and 2014, the number of employees covered by workers’ compensation benefits increased in California by 9.9%. In addition, the wages covered by the benefits also increased in California by 22.1%. Overall, the number of claims paid out in California rose between 2010 and 2014 by a significant enough amount to make California third in the nation for benefits paid during that time.

Regardless of perceived benefits or costs of workers’ compensation insurance and benefits to the employee, insurance is still required by California law. If you have questions about whether you are required to carry insurance and who needs to be covered, contact me to today at 714-516-8188 to discuss your business.

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