Understanding Workers Compensation

November 13, 2014

 Understanding Workers Compensation

The widow and son of a Bartlesville, Oklahoma man who died during firefighting training have been awarded more the $503,000 in federal and state death benefits despite testimony that said the man was never with a fire department.  This account from the Insurance Journal and many more like them pop up in the news every day.

The basis of interpreting your needs for Workers Compensation insurance is to understand your role and responsibilities so that proper procedures are followed and state compliance is maintained.  If a work-related injury or illness does occur, you want to be prepared.  Begin by understanding the definition and scope of Workers Compensation.

Source: California State University-Workers Compensation Guide for Managers & Supervisors

The definition of Workers’ Compensation is an employer-paid benefit program that provides compensation and medical benefits if an employee is injured or becomes ill due to a work related circumstance.  Any injury or illness is covered under Workers’ Compensation if it is caused by the employee’s job. This includes serious injuries as well as first aid injuries. Under Workers’ Compensation law, the employee may receive medical care if he/she is injured, no matter who was at fault. Eligibility for benefits is generally determined by a third party Workers’ Compensation claims administrator.  Some injuries may not be covered through the workers’ compensation program. Such cases may include but are not limited to injuries while voluntarily engaging in recreational, social, or athletic activities outside of the employee’s work duties.

Injuries and Illnesses

According to the California Labor Code, the term “injury” includes any injury, illness, or disease arising out of employment and occurring in the course of employment (AOE/COE). Other terms used in reference to an injury are: industrial injury, industrial accident, compensable injury, and work injury.

Injuries are categorized in three ways:

  • Specific: Injury to one or more parts of the body resulting from a specific incident.  (Example- Employee falls down stairs and fractures a bone.)
  • Cumulative: Injury from repetitive traumatic activities over a period of time.  (Example- Employee experiences hearing loss due to repeated noise exposure.)
  • Aggravation: A pre-existing condition or non work-related condition aggravated by an occupational injury or disease. The employer provides medical treatment until the employee returns to the pre-injury status of the pre-existing condition.(Example- Employee’s previous back injury exacerbated by continued heavy lifting.)

 Evaluation of reported injuries/illness are generally based on:

  • The accident/exposure must have occurred during assigned work hours. (Assigned work hours begin when the employee arrives at work.) Workers’ Compensation benefits generally do not cover accidents that occur while coming and going to work or at lunch, unless the lunch period is “paid time”.  The accident/exposure must have occurred on the employer’s premises or a location required by the employer.
  • The accident/exposure must have occurred while performing a work-related activity. A work-related activity is defined as one that benefits the employer, even if it may not be an assigned duty. For this reason, injuries/exposures that occur on authorized breaks are generally covered by Workers’ Compensation.  A claim may be denied or reduced in benefits if injury or illness was due to:
  • The employee was intoxicated or had illegal drugs in his or her system at the time the injury occurred.
  • Injuries are purposely self-inflicted.
  • Injuries/Illnesses caused by an accident/exposure, which is defined as an unexpected and unforeseen event (i.e., acts of nature—thunder, earthquakes…)
  • Injuries sustained by an employee who assaults or was involved in activities intended to injure another person are not covered.
  • It is determined by the insurer that the employee misrepresented his/her claim
  • The employee knowingly works outside his/her limitations while on modified duty

Check with us again as we will expand on this subject.  If you would like to make suggestions for future topics please email to ptribble@armstronginsco.com.

The Armstrong Company Insurance Consultants  (License #0440075)