first effective workers’ compensation law in the United
States dates from 1908 when Congress, following the recommendation
of President Theodore Roosevelt, passed a law providing limited
benefits for employees of the federal government. The states
of Maryland in 1902, Massachusetts in 1908, Montana in 1909,
and New York in 1910, all passed laws which were declared unconstitutional.
The Federal Workers’ Compensation Act of 1908, amended
in 1939, provides benefits for federal government employees
and employees of the District of Columbia.
compensation laws impose on the employer an exposure to loss
which is usually transferable. The risk of an employer being
sued by an employee for negligence of the employer has been
eliminated in most, but not all, cases. It is estimated that
90 percent of all employees fall within the scope of a workers’
Compensation laws give employees the right to collect from
their employers for injury, disability or death that occurs
in the course of employment. Most of the laws provide coverage
for “accidental occupational injuries arising out of
and in the course of employment”. The term accidental
is intended to eliminate self-inflicted injuries. Some laws
go further to say that if the injury occurred while the employee
was intoxicated or had willfully disregarded safety rules,
recovery is disallowed. The trend of the laws and court decisions
has significantly eliminated these last two exclusions, usually
reasoning that the burden rests on management supervision.
term occupational injury probably means a fortuitous, unexpected
event, definite in time and place. While the intent may be
clear, the laws are not. Prior to the addition of coverage
for occupational disease, in most jurisdictions, numerous
problems of coverage arose and decisions required the time
of the courts or appropriate administrative agency. At the
present every state extends the benefits of the law to cover
occupational disease which is defined as “ an injury
arising out of employment and due to causes and conditions
characteristic of, and peculiar to, the particular trade,
occupation, process or employment, and excluding all ordinary
diseases to which the general public is exposed”. Among
other conditions, heart attacks have presented difficult problems
types of benefits provided for in the laws may be divided
into four groups:
Medical Benefits - Every law provides for
the payment in kind of medical, surgical, nursing, and hospital
benefits. Most states place no limit, other than expenses
necessarily incurred, on the amount of such benefits. A few
states place limitations on the amount and / or time over
which medical treatment must be furnished.
Income Replacement - The second fundamental
purpose of the laws is to provide the injured employee and
his family with a degree of weekly income while disabled as
the result of covered injury or disease. The disability income
level and duration varies depending upon: (1) total or partial
disability, (2) employees average weekly wage level, (3) maximum
duration of benefits stated in the law, (4) maximum aggregate
dollar limits, and (5) waiting periods.
and Partial Disability. In general, one is totally
disabled when unable to perform the important duties of his
occupation. For benefit purposes, total disability is subdivided
into permanent and temporary. In the case of permanent disability,
there is an assumption that the injured employee will not
be able to work again. Some laws specifically state that the
loss of both eyes, both legs, or both arms shall constitute
total and permanent disability but it is not limited to these
specified losses. Temporary disability is that situation in
which the facts indicate that the employee will be able to
return to work at some future time. Weekly income benefits
are usually the same for both permanent and temporary disability.
disability means that the employee can perform some but not
all of the important duties of his occupation. Again, there
is a subdivision of permanent and temporary.
Death and Survivors’ Benefits - The
laws provide that actual funeral expenses will be paid up
to a maximum dollar amount. The burial allowance limits range
from $ 500 to $ 1,500, with $ 1,000 as typical. In addition,
all states provide income continuation for the widow and children
of the employee whose death is work related. As in the case
of disability, this weekly income amount is based on a percentage
of the average weekly wage of the deceased, subject to minimum
and maximum dollar limits. Children’s benefits terminate
upon the marriage of the children or when they reach the age
of eighteen. The widow’s benefit ceases upon remarriage
and her benefits are usually subject to an aggregate dollar
limit. About a third of the states express the limit in maximum
number of weeks the survivor’s benefit will be paid.
In such cases, 500 weeks is typical.
Rehabilitation benefits include medical rehabilitation,
such as physical therapy designed to improve physical functioning,
and vocational rehabilitation, such as retraining for a different
occupation. Workers compensation rehabilitation benefits usually
pay any reasonably justifiable expenses for these purposes.
is important to remember that the benefits, as provided by
the law, represent a right of the injured employee. The burden
of proof is not on the employee to show that he is entitled
to them but rather rests with the employer to demonstrate
the cause why the benefits should not be paid. In most cases,
benefits are paid by private insurance companies under contract
with employers in accordance with requirements of the state
laws. In a few states, the benefits are paid from state insurance
funds - in effect, state-owned insurance companies. If you
get hurt on the job, or if conditions at work damage your
health, chances are about nine to one you’ll be eligible
for workers’ compensation benefits. That’s roughly
the proportion of U.S. employees who are covered by workers’
compensation insurance plans set up by laws enacted in every
state and jurisdiction of the United States.
note that the precise coverage afforded is subject to the
terms, conditions, and exclusions of the policy as issued.
This explanation is intended only as a guideline. This information
is not intended to be considered investment, tax or legal
advice. It is provided, for your education only. This is not
an insurance contract. All terms and coverages are defined
solely by your policy.
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