How to Administer a Workers’ Compensation Claim

The following are typical steps to administer a workers' compensation claim after an employee suffers a work-related injury or illness. Employers should also review and comply with state laws as state law is most often the source of determining what constitutes a workers' compensation claim.

Step 1: Educate the Team

Organizations should educate employees and supervisors about workers' compensation coverage and injury/illness reporting requirements. Employers generally create policies and procedures that are posted on the company's intranet, or included in the state's poster/notice requirements. Employers should develop and facilitate training supervisors on recognizing work-related injuries and illnesses and reporting them.

Step 2: Report Incidents to Appropriate Parties

In accordance with the organization's policies and procedures, employees should be trained to contact the company's designated representative (this is usually someone from human resources, a manager, or a member of a health and safety committee). The representative should determine whether first aid is to be administered on the spot or if additional healthcare services are required at a healthcare facility. Depending on the severity of the injury, the representative may need to notify the employee's emergency contact of the incident. The employer should take immediate action to ensure that the worksite where the incident occurred is safe and secure so that there are no other incidents.

Step 3: Complete Injury/Illness Reports

The representative should meet to complete injury/illness reports, if possible. Some employers create their own incident reports, whereas others use "first report of injury" or workers' compensation claims forms provided by their insurance carrier or state worker's compensation agency. Some employers have the injured/ill employee  complete an initial report, but others may need assistance from the employee. The report usually includes the following information: date of injury, the place of injury, a description of the injury or illness, the date the employer became aware of the injury or illness, the date the employee was provided with the form, the date the employee returned the form, and any other required information. The representative should assign the  employee a deadline for completing the form. If the employee must return the form via mail, it should be mailed certified with a return receipt so there is a record of when the employee returned it to the employer.

During the meeting, the representative should review with the employee the claims procedures, the benefits available to the employee, and whom to contact if they have any concerns. Frequently discussed topics include:

  • Injuries and illnesses should be reported to the employer in a timely manner. Occupational injuries and illnesses should be reported as soon as they occur but no later than 24 to 48 hours after the incident. The company can investigate the matter and take safety measures to prevent further incidents if the employee files a report within the specified time. Time frames vary by state law for workers' compensation reporting. An employee usually can file a claim within one or two years of the incident. If they do not file within the state's time frame, they may lose their right to receive workers' compensation benefits.
  • Physician selection. Under some state laws, a physician may initially be selected by an employer for employees with work-related injuries and illnesses. The physician should inform the employees of their options for getting medical treatment.
  • Medical expenses. Health care facilities often inquire if the injury or illness is work-related. To ensure medical bills are sent to the proper payer, the representative should provide the contact information of the employer if self-insured or the workers' compensation carrier before any medical visit. Although health care facilities normally provide worker's compensation insurance companies with medical documentation, the representative should instruct employees to save all documentation they receive from related medical visits.
  • Compensation benefits. The representative should explain the wage replacement benefits that the employee is entitled to after a waiting period. Depending on the state compensation benefit, the employee may receive 66 percent up to 100 percent of the state average weekly wage. Employees may also be informed of salary continuation or the use of paid leave benefits such as sick, vacation or paid time off during waiting periods or periods of wage replacement. The use of paid leave benefits while receiving workers' compensation benefits may vary by state law. Additionally, the employer may want to address the issue of compensation of medical appointments.
  • Family and Medical Leave (FMLA). An FMLA-covered employer should provide an FMLA-eligible employee with required notices if applicable. For more information see the SHRM toolkit Managing Family and Medical Leave.

Step 4: File Injury/Illness Reports

The injury report is then forwarded to the workers' compensation carrier. The employer should check with the workers' compensation carrier on the available methods for submitting the report. Some carriers prefer electronic reporting, while others prefer that employers be able to call in or the report must be mailed in. Some states also require employers to submit their worker's compensation report to the state's workers' compensation agency. Employers should contact their workers' compensation carrier, which may file an incident report on their behalf.

Step 5: Stay in Contact with the Worker's Compensation Carrier

Organizations must keep in touch with the workers' compensation carrier. The employer may be required to submit medical documentation to the workers' compensation carrier. Moreover, the workers' compensation carrier may request information from the employer such as the number of days missed, the status of the employee's return to work, and any salary continuation so they can determine the wage replacement benefit amount.

Step 6: Stay in Contact with the Employee

The company’s representative informs the employee that their claim for workers' compensation has been submitted and that the workers' compensation carrier will contact them regarding wage replacement and medical treatment. The representative should then establish a schedule of regular follow-up calls, mail, or emails to let the employee know the status of thor claim and that their return to work and well-being are important to the organization.

Step 7: Establish a Timeline for Return to Work

Establishing a timeline for the employee to return to work is imperative, Determining whether or not the employer will be able to accommodate any restrictions regarding the employee's return to work. and, employers may need to consider whether workers' compensation insurance benefits will be paid concurrently with leave under the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), state leave laws, or a company-provided leave of absence. The leave policy should indicate how leave relates to workers' compensation for the employer.

Step 8: Return the Employee to Work

Getting the employee back to work is the main goal for both the employee and employer, even if it is on a light duty basis. The employer's policy should be well-written, and addressed with care to the employee's needs. Some workers' compensation carriers have resources to assist employers with their return-to-work programs.

An employee's return to work may be restricted by doctors that may allow the employee to return on restricted or light duty, which could be less physically and mentally demanding than the employee's regular job. If the employee is eligible for FMLA leave, he or she may accept the light duty assignment, which will not count toward FMLA leave because the employee has returned to work and is no longer on leave. Other options, such as continuing to be out on FMLA leave. However, the employer may deny the employee wage replacement benefits through workers' compensation and short-term disability based on the doctor-directed medical restrictions if the employee opts to take leave and not work.

Making temporary accommodations to assist the employee to return to work after an incident will prove beneficial to the employee in making them  feel connected to the organization and contribute to it. For the employer, the accommodations can reduce costs by reducing the need for temporary help and overtime. It may also lower workers' compensation rates. Moving the employee temporarily to another position is appropriate if the employee's limitations and ability to perform the tasks are taken into consideration. In the absence of a company policy regarding return to work or light duty, the ADA still requires an employer to provide reasonable accommodation to allow the employee to return to work. The ADA does not require an employer to eliminate essential job functions or to create a new position. However, the Equal Employment Opportunity Commission (EEOC) acknowledges that employers may have to transfer or reassign an employee with a disability to an alternate position if the position meets the light duty restrictions and is vacant or available, and the employee meets the requirement.

Step 9: Continue Leave or Terminate When an Employee Is Unable to Return to Work

An employee's doctor may provide a fitness-for-duty report that states that they are not fit to return to work and may not be able to return for some time or not at all. In this situation, the employer will have to determine whether additional leave is available under FMLA, the ADA, state leave, or company policies and practices. State workers' compensation laws may include anti-retaliation provisions that may preclude an employer from terminating an employee for being absent from work due to a work-related injury; other states have precedents that limit an employer's ability to terminate an employee receiving workers' compensation benefits. Above and beyond these laws, employers are under no obligation to continue to employ the individual; however, as with any termination, employers should seek legal counsel specific to their circumstances.

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