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How to navigate workers’ compensation

Thursday, June 18, 2020

Two construction workers cut wood.

States mandate that most employers provide workers’ compensation insurance, and for good reason. Workers’ comp (sometimes called workman’s comp) is essential coverage for employers and employees alike. 

But workers’ comp can also be a source of anxiety for employers. From maintaining productivity while an employee is recovering to disputing claims that appear fraudulent and responding to lawsuits, coping with a job-related illness or injury can be multifaceted and costly. 

Let’s dig into some of the details surrounding workers’ comp so your company will be better prepared. 

What is workers’ comp?

Workers’ compensation insurance provides a variety of benefits to employees who are injured or become ill while “on the clock,” including costs associated with:

  • Medical treatment, care and rehab 
  • Lost wages (usually at 2/3 salary)
  • Disability support
  • Funeral costs
  • Survivor benefits. 

Additionally, related legal fees may be covered, in part. Without workers’ compensation insurance, employers can be held responsible for these expenses.  

Individual states administer their own workers’ comp programs (here are links to North Carolina and South Carolina’s programs), as does the federal government for their employees. Workers’ compensation insurance is an employer’s expense, as employees are not responsible for contributing to the cost of coverage.

Who is required to provide workers’ comp?

Every state operates a little differently when it comes to which employers are required to carry workers’ compensation insurance. Variables typically include the type of business done by the company, type of work its employees are expected to do, and number of engaged employees.

Certain categories of workers are excluded by every state, most commonly those who work in a seasonal or casual capacity as well as those working in agriculture and domestic environments. In North Carolina, companies with three or more employees must carry workers’ comp; in South Carolina, it’s four or more. Nuances and exceptions exist, though, so be sure to review the specific rules for North Carolina and South Carolina to maintain compliance.

What constitutes a work-related injury or illness?

For an incident, accident or illness to be deemed work related, it must be “arising out of employment and occurring during the course of employment,” or AOE/COE for short.

Some injuries or illnesses develop over time as a result of an employee’s regular job responsibilities, such as breathing issues from constant chemical exposure or back pain from repetitive movement. Others occur unexpectedly, like falling or having a vehicular accident.

If an incident or accident took place on company property, while an employee was conducting company business or in a company vehicle — regardless of who was at fault — the employee will most likely be eligible for workers’ compensation benefits. 

Signing off on a construction project.

What is not considered AOE/COE?

Some injuries and illnesses take place AOE/COE but are outside of the scope of workers’ comp, including incidents and accidents occurring when an employee is:

  • “Going and coming” to work (unless in a company vehicle and a few other exceptions)
  • Offsite during a work break
  • Under the influence of a controlled substance
  • Attending an optional work event after hours
  • Knowingly being careless or irresponsible (“horsing around”)
  • Committing a crime
  • Violating company policy or workplace rules
  • Intending to inflict personal harm or harm to an associate

What is the workers comp process?

An employee who suffers a job-related injury or illness has a finite amount of time to report it. Ideally, you will receive an incident or accident report within hours or a few days. In North Carolina employees have up to 30 days to report injuries or illnesses to their employer or to the state’s Industrial Commission. In South Carolina they have up to 90 days to make an internal report or one to the Workers’ Compensation Commission. A report made outside of this window may result in an employee losing their workers’ comp benefits. 

Employers must also report the incident, accident or illness to OSHA (Occupational Safety & Health Administration). Once reported, ideally the process goes as follows: 

  • Employee immediately seeks medical attention from an approved provider
  • Employer provides injured or sick employee with claims paperwork and information
  • Employee files a workers’ comp claim
  • Claim is approved and employee receives benefits
  • Employee returns to work

If a workers’ comp claim is disputed by the employer, though, benefits can be delayed or denied following panel or board review. And if a claim is denied, employees can appeal the decision – at which point your insurance provider is likely to pair you with an attorney. Workers’ compensation is not one-size-fits-all coverage, and that’s why at Independent Insurance Associates, insurance is personal. Connect with us, and we’ll help you figure out whether or not you are required to carry workers’ comp insurance and what kind of policy you might need.