Worker’s Compensation was enacted to provide employees with an alternative to suing their employers for injuries on the job. It is an employer-paid benefit that provides lump-sum and periodic payments for health care of employees who have been injured in the workplace. Worker’s comp is NOT part of a company’s payroll since it is not a benefit paid for by employees. In fact, many employers buy WC policies from insurance companies who pay the benefits and lump sums to injured employees.
For all of its good intentions, WC has become the most bureaucratic administrative nightmare in the category of insurance. Currently, nearly all WC cases require litigation in court and the services of an attorney that are paid for out of the final proceeds. States cap out attorneys fees so many attorneys do not take on WC because the cases are also time consuming. Since WC is most often argued by insurance companies, the procedure takes a very long time to process and Plaintiffs often find themselves in a downhill spiral.
WC is very different from private disability since “the process” attempts to assign a “whole body percentage of disability”. Private disability requires reported Restrictions and Limitations that preclude work, which is very different from whole body percentages of disability. In fact, WC determinations of disability may not credibly support private disability claims.
Private disability for STD will not be paid when employees file for WC, but LTD claims “offset” amounts received from WC for disability and health care only. Employers will, on occasion, “hurry up” and file WC claims on behalf of employees to prevent them from filing STD. The problem is that WC takes a long time to pay, while STD is usually paid right away. Employees should NOT automatically file for WC, but should consider ALL of the options available. LTD can still be applied for since WC is a reduction or offset from benefits.
Attorney’s fees, court costs and other admin fees for WC are generally not offsets from private disability claims. Some insurers do attempt to offset all of the lump-sum settlement amounts, however, I recommend that the attorney ensure an itemized list or breakdown of cost allocations be included in the final WC Settlement Agreement. Reimbursements for past or continuing health care are also not offsets from private disability.
Consultants and other advocates are barred from the WC process, which is proabably a good rule since nearly every WC case winds up in court. The process is no longer a simple settlement negotiation, but an opportunity for the WC insurance company to drag employees through embarassing examinations and investigations. While the lump-sum settlement amounts seem impressive at the end, the finalization of WC cases are NOT timely. Since attorneys often resent the cap on their fees, many insureds tell me their WC attorneys are non-responsive, and don’t keep in touch very often.
In the end, WC cases are litigated by insurance companies who put employees through a long and harassing process. I’m not saying that WC is a bad thing, but it is only one source of income available to employees. Employees need to be very careful of being sent to “company doctors” for examination and future care. These physicians have very serious conflicts of interest and don’t represent you as a patient, but rather represent the company (and their WC insurer). The major goal is to get the employee back to work. Company physicians should never be used to certify private disability, it seldom works out very well particularly when employees are totally disabled.
Whether or not to file for WC depends on the seriousness of the injury, treatment costs, and the amount of rehabilitation that may be required. However, employees should know that the process is untimely, and possibly managed by an attorney that puts WC on a pay no mind list because he considers himself under paid. Employees should consider all sources of benefits, and the effects of forgoing STD and benefit reductions from LTD offsets.
