Who Pays for Ohio Workers’ Compensation Benefits?
If you’re injured on the job, you likely have a lot on your mind between regaining your health and filing for workers’ compensation. By understanding the different types of workers’ compensation programs and who pays for Ohio workers’ compensation benefits, you’ll have a better understanding of who you’re dealing with as you navigate the workers’ compensation system.
No matter what type of insurance an employer has, they should provide their employees with the proper paperwork and guidance when notified of an injury on the job. The employer will submit the required paperwork to the insurance carrier and the employee’s doctor will provide a medical report to verify the claim. Then the insurer (or company, if the company is self-insured) will approve or deny the claim and, if applicable, make a payment or negotiate some sort of settlement.
Ohio Workers’ Compensation Benefits Through an Insurance Company
In most cases, an employer will purchase workers’ compensation insurance through a private insurance company. These types of insurance companies handle workers compensation for companies of all sizes, from small mom and pop businesses all the way up to large corporations.
State-Run Workers’ Compensation Coverage
Ideal for smaller employers or employers in an industry that typically sees few workplace injuries, state-run workers’ compensation programs are typically run by a state’s department of commerce, labor, or industrial relations. States may have one of two types of workers’ compensation funds:
Monopolistic state insurance fund: This is found in states that only allow employers to purchase workers’ compensation through a state insurance fund. The cons of this kind of fund is that it doesn’t allow for competition. States such as North Dakota, Ohio, Washington, and Wyoming require all employers to purchase workers’ compensation policies through state funds and do not allow employers to purchase policies from private insurers. In some cases, employers in Ohio and Washington can be granted authorization to self-insure.
Competitive insurance fund: This type of fund will be found in states that allow employers to purchase a policy from the state or from a private insurer. This allows private and state carriers to compete for employers’ business. Arizona, California, Colorado, Hawaii, Idaho, Kentucky, Louisiana, Maine, Maryland, Minnesota, Missouri, Montana, New Mexico, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas, and Utah all allow employers to purchase workers’ compensation from a state fund, a private insurer, or to self-insure.
Self-Funded Workers’ Compensation
Some employers choose to self-insure when it comes to workers’ compensation. This means that they have a self-funded plan where they assume the risk of providing Ohio workers’ compensation benefits if one of their employees is injured on the job. When a claim is approved, these companies pay out of pocket to cover the cost rather than continually paying a fixed premium to an insurance company to provide coverage.
Why would an employer choose a self-insured workers’ compensation program? Many companies feel that it gives them more control over costs and employee care. This type of plan is only feasible for companies with the financial resources to pay claims when they arise, as workers’ compensation claims can be quite expensive. According to the National Safety Council, the average workers’ compensation claim costs about $40,051, with the most expensive claims costing an average of nearly $80,000. Even companies with large cash flow will often purchase catastrophic insurance to cover claims above a specific dollar amount.
Some states don’t allow employers to take part in self-funded workers’ compensation programs and require them to purchase from insurance companies or take part in state-funded plans. It’s estimated that around 6,000 corporations and their subsidiaries around the globe have self-funded workers’ compensation programs.
While state laws differ on the type of insurance an employer may carry, all states require employers to carry workers’ compensation insurance, supply employees with accurate information, and file claims in a timely and truthful manner. If an employee is uncertain about how to move through a workers’ compensation claim, has questions, or feels that their employer is working to slow up or derail the process, it’s essential to get advice from qualified legal experts like the team at Taubman Law who have years of experience dealing with Ohio workers’ compensation benefits.
This post was written by Cleveland attorney Bruce Taubman, who practices workers’ compensation, personal injury, and medical malpractice throughout Ohio.
Taubman Law primarily practices in personal injury, medical malpractice, workers’ compensation law, and employment discrimination throughout Northeast Ohio and beyond. For more than 40 years, the Taubman Law Family has been helping our clients receive the compensation that they deserve. Come and see us at our Ohio City office (1826 West 25th) for a free consultation or contact us here to set up an appointment. A lawyer who cares is right around the corner. Taubman Law — Smaller, Smarter, Better.