Who pays workers’ compensation benefits?

In most states, employers are required to purchase insurance for their employees from a workers’ compensation insurance company — also called an insurance carrier. However, in some states, smaller companies (with fewer than three or four employees) are not required to carry workers’ compensation insurance. In some states, larger employers who are clearly solvent are allowed to self-insure, or act as their own insurance companies.

When a worker is injured, his or her claim is filed with the insurance company — or self-insuring employer — who pays medical and disability benefits according to a state-approved formula.

Are all on-the-job injuries covered by workers’ compensation?

Most are. The workers’ compensation system is designed to provide benefits to injured workers, even if an injury is caused by the employer’s or employee’s carelessness. But there are some limits. Generally, injuries that happen because an employee is intoxicated or using illegal drugs are not covered by workers’ compensation. Coverage may also be denied in situations involving:

• self-inflicted injuries (including those caused by a person who starts a fight)
• injuries suffered while a worker was committing a serious crime
• injuries suffered while an employee was not on the job, and
• injuries suffered when an employee’s conduct violated company policy.

Does workers’ compensation cover only injuries, or does it also cover long-term problems and illnesses?

Your injury need not be caused by an accident — such as a fall from a ladder — to be covered by workers’ compensation. Many workers, for example, receive compensation for repetitive stress injuries, including carpal tunnel syndrome and back problems, that are caused by overuse or misuse over a long period of time. You may also be compensated for some illnesses and diseases that are the gradual result of work conditions — for example, heart conditions, lung disease and stress-related digestive problems.