How to Insure Your Income: Workers' Comp Claims
Under workers' comp, disability income benefits compensate the injured employee for lost or reduced earning capacity that results from a compensable injury or occupational disease. The benefits are paid -- without much discretion on the insurance company's part -- when the worker is unable to perform all or part of his or her regular duties.
A caveat: The one piece of control insurance companies have over workers' comp disability benefits is evidence that a claim is fraudulent (and there are quite a few of these). If you're making a disability claim under one of these plans, be prepared to report your status on a regular basis -- and to deal with skeptical claims reps.
Workers' comp benefits are paid in four designated classes of disability, as follows:
- permanent total;
- temporary total;
- permanent partial; and
- temporary partial.
A waiting period (usually three to seven days) applies before benefits for loss of wages begin. If the disability continues beyond a longer period (usually two to four weeks), retroactive benefits will be paid for the initial waiting period.
For permanent total disability or temporary total disability, the benefit is a percentage of the injured person's weekly wages before the injury. This amount is subject to stated minimum and maximum dollar amounts. Within each state, the percentage is the same for either type of total disability (66 2/3 percent is most common).
However, for permanent total disability, the dollar maximum and the benefit period are usually greater. Benefits for permanent total disability often continue to age 65, while benefits for a temporary total disability may be limited to a maximum number of weeks.
People with partial disabilities are able to perform some work, so the laws provide a benefit equal to a percentage of the wage loss (difference between earnings before and after the accident). In addition to benefits for lost wages, the state provides scheduled benefits for specific permanent partial disabilities, such as loss of limbs, sight or hearing. Usually, these benefits are paid in addition to any other income benefits.
