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By Staff Reporters
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While some medical practitioners and facilities can operate without Professional Liability Insurance coverage, one business related insurance that cannot / should not be avoided is Worker’s Compensation. Employers in all but seven states – so-called “monopolistic” states because they have their own state funds, are under statutory obligation to provide coverage for their employees. Historically, Worker’s Compensation pre-dates Social Security entitlements and well before the emergence of employer sponsored group benefits.
The coverage under worker’s compensation provides for lost income due to on-the-job accidents or work-related disability or death and the amount of benefits vary by state. In some instances, the coverage will reimburse the employee for medical expenses incurred with the accident.
The four general benefits covered under Worker’s Compensation are:
Medical Care – for expenses incurred usually without limitations on amount or period of care.
Disability Income – payable for both total and partial disability and is usually based on 66 2/3 percent of their wage base.
Death Benefits – generally fall into two categories; one a flat amount for “burial” insurance; and two, survivor benefits. Though varying by state, these benefits are similar to the disability payment (a percentage of weekly base wages) but may be capped as to total benefit, such as $50,000 or a period, such as 10 years
Rehabilitation Benefits – includes not only medical rehabilitation, but vocational rehabilitation, vocational counseling, retraining or educational benefits, and job placement
Traditionally, the secondary purpose of Worker’s Compensation was to reduce potential litigation because employees accepting the benefits from a Worker’s Compensation claim generally waived their right to sue their employer.
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However, in our litigious society, this “protective shelter” has been severely tested and is crumbling.
Employers may provide their Worker’s Compensation three ways:
- Private commercial insurance
- State government funds
- Self-insurance
Very few factors drive the premium structure – the occupation of the workers is the single most important determinant of premiums. An office worker may have premiums as low as $.10 per hundred of wages and a coal miner may exceed $50.00 per hundred of wages. Generally speaking, however, Worker’s Compensation premiums for the medical profession or healthcare worker are among the lowest available.
Therefore, for the medical practice, some physicians may consider self-insurance because the weekly benefits are typically below $500, thus making this decision attractive.
Alternatively, because officers and owners can elect not to be covered by Worker’s Compensation, the decision to purchase coverage from a private insurance company may afford inexpensive assurance that the benefits will be conveniently provided, and administered, by a private insurance company for their employees.
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Filed under: "Ask-an-Advisor", "Doctors Only", Financial Planning, Glossary Terms, Health Insurance, Healthcare Finance, Insurance Matters, Risk Management | Tagged: business insurance, commercial insurance, death benefits, disability income insurance, finance, health, Health Insurance, healthcare, insurance, insurance cost, insurance premiums, medical care, Private Insurance, professioonal liability insurance, rehabilitation benefits, self insurance | Leave a comment »
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