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Understanding Workers Compensation Insurance

Knowing when you are going to be covered by workers’ compensation for a work-related injury or illness can help you save thousands of dollars in medical costs. Sometimes you can also recover lost wages as a result of your workplace injury.

The tricky part lies in determining whether or not your specific situation falls under workers compensation as well as whether your employer even has coverage for you. To determine what times you would and would not be covered under workers’ comp, here are some general guidelines:

The Bare Minimum

Looking at the most basic requirements for workers’ comp, you can only be covered if:

  • You have a demonstrable injury or medical condition
  • This injury or condition arose as a direct result of your work duties
  • The company or person you work for carries workers’ comp insurance
  • You are a direct employee of that person or company

While these can help you narrow down your eligibility, going into more detail for each requirement helps clarify when you would or would not have workers comp coverage.

Demonstrable, Work-Related Injury or Condition

First, you must actually have some sort of identifiable illness, injury or condition. This requirement means that in nearly every case you will need to see a doctor about your condition to determine precisely what it is, and only then will you receive coverage for it — if it can be proven to be work-related.

For instance, if you feel like you have back problem but a physician cannot find anything within their tests, x-rays and physical pain evaluations, then you will need to seek a second opinion before you can be covered.

Second, the injury had to occur while you were directly performing work duties. Getting carpal tunnel syndrome from typing several hours a day, cutting yourself while using work equipment or getting an illness after being exposed to job site chemicals are all fairly concrete examples of work-related injuries.

Injuries during a commute or lunch break are not usually directly work-related, but if your lunch break injury occurred while you were also picking up materials for your boss, then a gray area arises. If you are being denied a claim on the basis that it is not work-related, you will need to provide further evidence or hire an attorney to back your case.

workers compensation

Your Employer Must Carry Workers’ Comp

For a large majority of jobs available, your employer will have to provide some form of workers’ compensation. Exceptions arise from state-to-state in specific situations. For instance, some states may not require employers to carry workers comp if they employ three or less people or if they are a charity organization.

Ask your employer if they carry workers’ comp, and if they do not then verify your state laws to see if they are in compliance. As an aside, federal employees will be insured under a different, non-state-related system.

You Must Be a Direct Employee to Be Eligible

Independent contractors, volunteers and other complex work relationships may mean that you are not technically a direct employee of the company or individual you work for. Sometimes, an employer will try to classify employees as private contractors when in fact they are direct employees.

Review your state laws or consult an attorney to determine if you are eligible for workers’ comp coverage. Keep in mind that some states make exceptions for:

  • Domestic workers
  • Agricultural workers
  • Leased or loaned workers
    • For example, temps may be covered by their temp agency rather than the job site they are working, or they could be considered independent contractors
  • Seasonal and temporary workers
  • Undocumented workers
    • Some states specifically exempt undocumented workers, others explicitly enforce coverage and many have not yet addressed the issue, creating a legal grey area

As you can see, workers’ compensation claims will not always be as straightforward as they appear. Your best course of action is to speak with your employer and confirm that they will or will not cover you along with some potential situations where coverage may be withheld.

No one should have to go without coverage if they should by rights have workers compensation eligibility. If you do not agree with your employer’s point of view, consult your state’s labor laws or an attorney to find out what your rights should be. You just may be saving you and your co-workers from the burden of unfair medical costs.