Tennessee is one of the few states left with a court based workers’ compensation system but that may be changing. Current Governor Bill Haslam has a bill that plans to overhaul the system but it’s not going through the government without controversy. In 2011, Governor Haslam conducted a study of the worker’s compensation system in Tennessee to see where any, if any, weaknesses existed. The result is the current bill that is aiming to create a business friendly environment while still providing the necessary benefits to injured workers.
In Tennessee, it’s mandatory to offers worker’s compensation to employees and most recently, another measure ‘tightened the legal definition of what constitutes an injury under the law and simplified the procedure for communication between an injured employee’s doctor and the employer.” One of the main reasons for the study was the investigation into employers and how the workers compensation laws were being violated. Employers would often incorrectly label employees as having a lower insurance premium to save money.
Supporter of the bill claim that it will save Tennessee money and bring balance to the system while opponents argue that changing it will put workers in harm’s way and sacrifice their rights. No matter what the final outcome of the bill is, it’s important to under worker’s compensation and how it affects businesses and their employees.
If you run business or work for someone else, worker’s compensation has an effect on you. Not all states require this form of insurance but many do. Even if it’s not required, it’s a very good sign of a legitimate employer. For a business owner, it acts as a safety net in case your employee is injured while on the job. Most importantly, it protects you from being sued. As an employer, if you don’t have worker’s compensation insurance and one of your employee’s is injured, you can be held responsible for the medical bills. If an employee wants, they can also sue you for additional damages since they were on your clock. When you have worker’s compensation, that’s not an issue. This form of insurance will help pay for any employee injuries or illnesses that develop as a side effect of the work. For example, if your worker develops mesothelioma from working with asbestos for many years, worker’s compensation could help pay for any medical bills.
When is an Employee Covered?
Just like with any insurance policy, there are certain circumstances where employees may not be covered and it’s important that both you and your employee understand what those are. If an employee’s injuries are self-inflicted while on the job, worker’s compensation insurance will not cover losses. It may be hard to tell whether an injury was self-inflicted or not but before the insurance company pays a claim, it request an investigation into the events surrounding the incident.
If an employee tries to claim worker’s compensation for a fall that happened while they were at their favorite lunchtime restaurant, they may or may not be covered. Generally, if an injury occurs while someone is not working, their bills aren’t covered but it can vary case by case. Also, if your employee is committing a crime and gets injured or is violating company policy (which most crimes will) and get injured, that employee will most certainly not receive any insurance benefits. But legitimate claims are made every day and while a policy may not be required, it could help you save you money by avoiding legal fees, medical bills, and payment of lost wages.
It’s important to note that workman’s compensation and disability are two different things but they are related. Many times, a workman’s compensation claim can turn into a disability issues and you need to have the right form of coverage for this as well. Disability comes in two forms: long term and short term. In the state of Tennessee there are several sub-classifications as well which include: temporary total disability (TTD), permanent total disability (PTD) and permanent partial disability (PPD). Each form of disability is subject to payment caps on weekly and monthly amounts and includes a 400 week maximum benefit period. If you are permanently and totally disabled (PTD), you can receive benefits until you reach retirement. Unfortunately, due to the court based system, it can take months and even years to receive a judgment, much less a payment.
The Cost of Protection
As Tennessee considers implementing a new form of worker’s compensation insurance, being protected is still important for an employer and an employee. If the nature of your business is extremely dangerous, it will be in your best interest to provide some type of worker compensation. It may seem just another monthly payment at first but legal fees can be expensive and if you’re found at fault and it’s believed that, as an employer you could have prevented an accident, you will likely be paying a large settlement for years to come. Worker’s compensation normally starts at $2,000 for a normal small business but the more employees you have, the more it costs to insure them. Rates are going to vary state by state to it’s always important to check on requirements as well as how price is determined.
By running a business, you open yourself up to a great amount of risk and worker’s compensation is just one way that you can protect yourself. Whether you’re located in Tennessee with a court based system or in another state that deals directly with the insurance company, the cost of the policy may be well worth peace of mind in the face of an unexpected event.