WORKERS' COMPENSATION LAWS : Benefits, Disability Income, Death Benefits

Benefits
Workers' compensation laws typically provide four types of benefits:

- Medical care

- Disability income

- Death benefits

- Rehabilitative services

Medical Care
Benefits for medical expenses are usually provided without any limitations on time or amount. In addition, they are not subject to a waiting period.

Disability Income
For an employee to collect disability income benefits under workers' compensation laws, his or her injuries must result in one of the following four categories of disability:

Temporary total. The employee cannot perform any of the duties of his or her regular job. However, full recovery is expected. Most workers' compensation claims involve this type of disability.

Permanent total. The employee will never be able to perform any of the duties of his or her regular job or any other job. Several states also list in their laws certain disabilities (such as loss of both eyes or both arms) that result in an employee's automatically being considered permanently and totally disabled even though future employment might be possible.

Temporary partial. The employee can perform only some of the duties of his or her regular job but is neither totally nor permanently disabled. For example, an employee with a sprained back might be able to work part-time.

Permanent partial. The employee has a permanent injury, such as the loss of an eye, but may be able to perform his or her regular job or may be retrained for another job.

Most workers' compensation laws have a waiting period for disability income benefits that varies from two to seven days. However, benefits are frequently paid retroactively to the date of the injury if an employee is disabled for a specified period of time or is confined to a hospital.

Disability income benefits under workers' compensation laws are a function of an employee's average weekly wage over some time period, commonly the 13 weeks immediately preceding the disability. For total disabilities, benefits are a percentage (usually 66⅔ percent) of the employee's average weekly wage, subject to maximum and minimum amounts that vary substantially by state. Benefits for temporary total disabilities continue until an employee returns to work; benefits for permanent total disabilities usually continue for life but have a limited duration (such as ten years) in a few states.

Benefits for partial disabilities are calculated as a percentage of the difference between the employee's wages before and after the disability. In most states, the duration of these benefits is subject to a statutory maximum. Several states also provide lump-sum payments to employees whose permanent partial disabilities involve the loss (or loss of use) of an eye, an arm, or other body member. These benefits, which are determined by a schedule in the law, may be in lieu of or in addition to periodic disability income benefits.

Death Benefits
Most workers' compensation laws provide two types of death benefits:

- Burial allowances

- Cash income payments to survivors

Burial allowances are a flat amount in each state and vary from $300 to $5,000 with benefits of $1,000 and $1,500 being common.

Cash income payments to survivors, like disability income benefits, are a function of the worker's average wage prior to the injury resulting in death. Benefits are usually paid only to a surviving spouse and children under age 18. In some states, benefits are paid until the spouse dies or remarries and all children have reached age 18. In other states, benefits are paid for a maximum time, such as ten years, or until a maximum dollar amount has been paid, such as $50,000.

Rehabilitation Benefits
All states have provisions in their workers' compensation laws for rehabilitative services for disabled workers. Benefits are included for medical rehabilitation as well as for vocational rehabilitation, including training, counseling, and job placement.

A difficulty faced in providing vocational rehabilitation is that employers are reluctant to hire workers with permanent physical impairments because a subsequent work-related injury may result in their total disability and thus an increased workers' compensation premium. For example, a worker who lost an arm in a previous work-related accident would probably be totally and permanently disabled if the other arm was lost in a later accident. Consequently, most states have established second-injury funds. If a worker is disabled by a second injury, the employer is responsible only for providing benefits equal to those that would have been provided to a worker who had not suffered the first injury. Any remaining benefits are provided by the second-injury fund.