Who Provides Workers’ Comp Benefits

Workers’ comp is a system that compensates workers who are injured while one the job. Every employee in the US is covered by the workers’ comp system. However, despite how universal workers’ comp is, very few people actually understand how it works. One very common question is who actually provides the benefits of workers’ comp. Is it the employer or someone else? If it is the employer, wouldn’t that create a conflict of interest? This guide will answer this question and provide you with all the information you need to know on the matter.

The Two Models

Part of the reason why this question is complicated to answer is because the answer varies depending on which state you are in. There are two workers’ comp models:

  • The insurance model
  • The state model

Some states employ the insurance model, while some states employ the state model. It is a good idea to research which of these two models is in place for the state you work in. As an additional note, you should know that it is only the state you work in that matters. If you live in a different state than the one you work in, your home state does not affect the situation at all.

The Insurance Model

In states which employ the insurance model, workers’ comp functions similarly to any insurance policy. The employer can shop around with different insurance providers and choose whichever one he or she wants to provide workers’ comp benefits. If a worker is injured, the insurance company will provide the benefits to the employee.

All employers are legally obligated to have workers’ comp coverage and to submit a claim if an employee reports a work-related injury. Because employers’ workers’ comp insurance rates may increase after a claim, it does create a conflict of interest. If you suspect your employer may have intentionally not filed your claim, you may be able to pursue legal action.

The State Model

In states which employ the state model, benefits come directly from the state. Usually, there is a state agency set up to handle all workers’ comp claims throughout the state. In these states, there is nothing special employers need to do for employees to be covered by workers’ comp. However, the employer is still legally obligated to submit a workers’ comp claim in these states. There is no conflict of interest between employers and employees under the state model. However, if your employer fails to submit your claim, you may still be able to take legal action with the help of a workers compensation lawyer from Law Offices of Franks, Koenig & Neuwelt.