In last month’s blog post, we went over some details that employers should be aware of when it comes to Workers’ Compensation coverage, the most important factor being that your clients are 100% responsible for providing this type of coverage to their workers. When it comes to explaining how Workers Compensation Awards work, however, what should your clients tell their employees? Much of how their claim is handled has little to do with their employer and much more to do with the state in which they reside.
How so? A recent infographic published by ProPublica illustrated how Workers’ Compensation is surprisingly unequal between states. They referred to a recent story of two men who live on either side of the Alabama-Georgia state line. These two men had extremely similar jobs, roles, and injuries, yet the worker who lived and worked in Alabama received $45,000 for the loss of his arm, while the man in Georgia received an award of over $740,000 after losing his arm. Even the two men’s ages were fairly similar, one being 25 and one being 27. So why the discrepancy?
Nearly every state has what’s known as a “schedule of benefits” that divides up a person’s body parts on a chart. Employees are then awarded a portion of their wages up to the maximum allowed in their state, for the specified number of weeks assigned to each body. While logically many people feel that if you lose a limb on the job, the cost should be the same throughout the country regardless, the fact is that workers in different states are compensated in different ways.
Some employers are quick to assume that the real problem is that the cost of contributing to Workers’ Compensation Insurance Programs are eating at their profits too much. However, Workers’ Comp premiums are reportedly at historic lows, despite increases in health care costs. Curious as to what employers in your state are paying for Workers’ Compensation coverage? Look up your state’s results here.
The staff members at Midwestern Insurance Alliance are experts in providing Workers’ Compensation coverage, and view their relationship with policyholders as a partnership. To learn more, please contact MIA today.
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