As an employer, you know that workers’ compensation exists to protect both you and your employees. You, from unwanted lawsuits, and your employees, from financial challenges following a work-related injury.
After that, though, the rules and regulations in place for workers’ compensation claims can get a little complicated—and you might have some questions. For example, if you’ve ever wondered whether there are time limits on workers comp claims, read on as we break down this common question and take a look at the factors that impact the length of time your employee’s claim may stay open.
How Are Workers’ Comp Cases Resolved?
Understanding how workers’ comp claims are settled is the first step in learning how long a claim may stay open. There are two basic ways that workers’ comp settlements are handled:
- Compromise and release: with this type of settlement, the injured employee is given a single lump sum payment, which closes the case and severs the relationship between the employee and the insurer. If their medical condition requires further care in the future, they will need to pay for the injury out of pocket; they cannot reopen the claim.
- Stipulation and award: This means that the claimant receives payments for the injury over a period of time—generally months or, in some cases, years. That fact means that there is a continuing relationship between the injured worker and the insurance company, and the employee may be able to reactivate their claim if their health worsens in the future from the consequences of their work injury. Whether they can do so or not depends largely on the workers’ comp laws of the state they live in and how long it’s been since the injury. In California, for example, an employee has five years after the injury to reopen their claim case.
There is also the possibility of a judicial ruling in a workers’ compensation case if the participants cannot reach one of the two settlement types listed above.
How Long Can a Workers’ Comp Claim Stay Open?
Simple workers’ comp claims can stay open for a few weeks, while more complex claims that require ongoing medical treatment can stay open anywhere from one to several years. If a worker has an injury that left them with a lasting disability that requires regular medical care, their claim may stay open for their lifetime.
As you might guess, the type of settlement you arrive at in a workers’ comp claim impacts the length of time the case will remain open.
...with Compromise and Release Settlements
If the workplace injury has stabilized and the employee is finished with medical care and able to return to work, a compromise and release settlement might be a good option.
If that’s the case, the workers’ comp case will only be open long enough for participants to agree on the sum and the employee to receive the check. At that point, the case closes. This usually takes a fairly short time, and the case could be resolved within a few weeks.
...with Stipulation and Award Settlements
For more complex cases, where continuing medical treatment is required and the employee suffers from temporary or permanent disability, a stipulation and award settlement sometimes makes more sense.
Often, the settlement will be delayed while the worker is still recovering, since it’s not clear how much the insurer will need to pay for medical costs. The insurer, however, is required in many states to pay for medical costs while the settlement is still pending. In California, for example, the insurer must provide up to $10,000 for treatment while the case is being considered by the claims administrator.
In these cases, a workable settlement may not be arrived at for more than a year, and the workers’ compensation benefits might continue for years, providing financial support for the employee as they deal with a personal injury that has a lasting impact.
If that happens, the insurer may be paying for medical expenses long after the date of injury. There is no set statute of limitations on claims; in some cases, the workers’ compensation coverage may end or diminish when the worker reaches the age of 65 and Medicare kicks in. In other cases, it may last as long as the employee lives. The terms of the settlement will have dictated the length of time the claim is paid out.
Are Workers’ Comp Rules the Same No Matter Where the Employee Lives?
Workers’ compensation insurance is partly governed by rules created by the Division of Workers’ Compensation in the state where the business operates. So the answer to a question such as “How long can you be on workers’ comp in Texas?” could be different from “How long can I be on workers’ comp in Ohio?”
In general, state laws regarding workers’ comp deadlines are more often concerned with the length of time the employee has to file the claim—not the length of time for which they can receive benefits.
If a worker needs care for the rest of their life, their claim may stay open for their lifetime—and that doesn’t vary much from state to state. It’s possible that the payments may be reduced when the employee begins to collect social security retirement benefits, but there is no age limit for workers’ compensation.
If you or your employee are concerned with possible state laws limiting benefits, your best bet is to consult the law firm of a workers’ compensation attorney. These legal professionals understand the labor code in your state and can speak to the potential length of an injury claim.
If you are using a payroll or workers’ comp system such as Hourly’s easy-to-use app, you can be sure your state laws will be taken into account. This ensures that you are paying neither too much nor too little on your premiums and that you stay in compliance and avoid headaches down the road.
Does Workers’ Compensation Follow You around?
Another question you or your employees might have is whether a work injury claim stays open if the employee leaves the business to work elsewhere. Here, once again, the type of settlement plays a role.
If a worker with a job-related injury and the insurance company agree on a stipulation and award settlement, with multiple payments over time, there is no issue with the employee working elsewhere—or, if their injuries are severe, living on full or partial disability benefits.
Some insurers, however, will refuse to agree on a compromise and release settlement if the claimant wishes to return to work for the same employer. Why? Because insurers claim that the claimant could, in the future, open a new claim with the same insurer for the same injury.
No insurer wants to pay twice for the same injury, so they will likely turn down a proposed settlement under those conditions. Whether this is truly the case or not is open to debate and is not stipulated by law, but it is a fact that often if there is a lump sum payment, the expectation is that the worker will not be returning to their job.
What Is the Difference between Workers’ Comp Settlements and Lawsuits?
A workers’ comp settlement is when an employee, employer and insurance company agree on the amount of money that should be given for a workplace injury (and that money is provided), whereas a lawsuit is when they can’t agree and someone sues, which lands the case in court.
With a lawsuit or hearing, the participants in the claim, including the employee, their workers’ compensation lawyer, if they have one, and a representative from the insurance company go before a judge who has experience dealing with workers’ compensation laws.
There is no jury, however.
The judge will hear testimony on the case, review medical records and past settlement attempts, and decide on the claim and how much money shall be given to the claimant—or, conversely, rule that the claimant has no right to a payout.
An injured employee may ask for the case to be settled by a judge if the claim was denied and they wish to appeal it or if the amount that the insurer wants to pay seems inadequate. They may need to undergo a medical exam from an independent medical provider, and they may want to get legal advice and retain a lawyer if they have not done so previously.
Deadlines for Workers’ Comp Claims
Although a case can stay open for as long as the injured worker is alive, there are deadlines, mostly imposed by the state, for filing a claim. Let’s take California, for example. In California, they include the following:
- Reporting the injury to the employer: California workers must give the employer written notice within 30 days of the incident. There are a few exceptions, such as when the injury resulted in a coma, or for a contagious illness for which quarantine was required. If the injury is cumulative, such as a repetitive stress fracture that gets worse over time, the employee must inform their employer within 30 days of missing work, or 30 days from the date that the doctor diagnosed the work-related injury.
- Filing the claim: This is done by both employer and employee. Once the employer knows about the injury, they must give or mail the employee a claim form within one working day. The employee fills out the “employee” section and returns it to the employer. The employer fills out the “employer” section and forwards it to the insurance company. This must be done within a year of the injury.
- Insurer response: The insurance company has 14 days to inform the employee of the status of the claim once they receive the claim form. If the claim is not denied within 90 days, it is presumed to be covered.
- Authorizing medical treatment: California state law says this must happen within a day of filing the claim form. While the insurer is deciding whether to accept or reject the claim, the employee may receive up to $10,000 in medical treatments.
Other states may have different regulations and deadlines. If you’re unsure of the regulations or deadlines in your state, talk to your insurance agent.
What Is the Most Common Question Claims Adjusters Ask?
The first and possibly most important question a claims adjuster will ask an employee is: “What happened?” If you are the person who was injured and you’re not sure exactly how the accident happened, it’s a good idea to talk to eyewitnesses so you can answer this question accurately.
The injured worker should not embellish, exaggerate, or lie, as these will raise red flags that might impact the adjuster’s final report. The adjuster may take the time to talk to others who were on the scene, and any discrepancy between what they say and the worker’s own account would be noticed.
If you are the business owner, the adjuster will want to ask for your version of the accident or injury. They may also want to talk to you about safety conditions in your place of business, as well as protocols in place to protect your employees from likely accidents. This is one reason it's a good idea for business owners to be compliant with all OSHA safety requirements and state-mandated safety regulations well before there is an accident.
Here are a few more tips to make that meeting as smooth as possible, and to handle frequently asked questions that the adjuster might have.
- Fill out the claim form completely: First, make sure the claim form is completely filled out, with no answers left blank. This can hold up a settlement and waste time for all involved. If the adjuster has to go hunting for birth dates, social security numbers, or information on the nature of the injury, they cannot do their job properly.
- Submit your claim in a timely manner: Make sure all requested material is submitted in a timely manner. If you wait too long, you may lose out, and even submitting close to a deadline can put the adjuster in a tight spot as they work to gather material before their own internal deadlines.
- Report all medical attention and lost time as soon as possible: If work time has been lost due to an injury, the costs for the insurer will begin to increase as they look at paying out on wage losses. They want to handle that promptly.
- Answer all questions—but only if you have the answers: Answer questions thoroughly and as completely as you can, but don’t volunteer information or diagnose any injuries yourself when talking to an adjuster. Make sure your employee is examined by an independent medical professional.
Know How to Answer Your Employees’ Questions on Comp Benefits
You don’t necessarily have to be a workers’ compensation expert to be a business owner—but some basic knowledge about what happens when an employee is injured in an on-the-job accident can be helpful. If that happens, you will be involved in helping them settle their claim in a way that is fair for all those involved.
Now that you know a little more about how claims work, the types of settlements that are offered, and how long a claim can stay open, you’ll be able to answer questions that your employee may have about the process and how it will progress.
1. Introducing Yourself
Your introductory email needs to pack a lot of information into a small package. Try something like this:
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My name is John Doe and I work for ABC Agency, where we provide business insurance policies to many of Dallas' rockstar small businesses.
Congratulations on your new business, Jane's Bakery. Are you wondering if you have all the insurance you need? Or if your policies will really cover you in a pinch?
At ABC Agency, we pride ourselves on providing robust, comprehensive coverage options to companies like yours with flexible, pay-as-you-go plans.
Are you available this week to talk more about how we can help? I can help you find the most affordable rates and the best policies out there.
I look forward to speaking with you soon.
2. Presenting a Quote
Once you've met with your potential client, a quick reply with their quote will get the ball rolling.
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Thanks so much for meeting with me this morning. I loved touring Jane's Bakery–I can still smell those delicious chocolate chip cookies baking! You have a great location, and I'm sure you're going to do great on Front St.
After reviewing my notes, I've pulled together an insurance quote for you (attached). I recommend a business owner's policy. A BOP includes several insurance products in one: liability, property insurance, and business interruption insurance. It offers robust coverage at a competitive price.
I'll call you in a few days to see what you think about this insurance plan. In the meantime, if you have any questions, don't hesitate to email me or call me at [phone number].
Again, thank you for your time today. I look forward to working with you in the future.
3. Thanks for Purchasing a Policy
Gratitude is important! It's never a bad idea to thank your clients for their business.
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Thank you for choosing a business owner's policy with ABC Agency. We know it's so important to get the right coverage for your business, and we are honoured you've placed your trust in us.
We're excited to work closely with you, and our no. 1 goal is to make sure you're business is always protected.
Do you have any questions? We are here to help. Reach out whenever something comes to mind.
Thank you again for choosing ABC Agency to insure Jane's Bakery.
4. Welcome Email
A welcome email helps clients feel like you're there to help–and can softly pitch other insurance products you offer.
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Welcome to the ABC family! We are thrilled to have you as a new customer and can't wait to meet all of your insurance needs.
As an independent insurance agency, we work with multiple insurance providers to find the best coverage options for all our customers. If you need any other type of insurance–like [include additional offerings unique to your agency, like life insurance, health insurance, home insurance or anything else]–we can help you too.
Do you want to discuss any of these policies?
5. Introducing a New Product
A happy client may want to expand their business with you.
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I hope all is well with you and Jane's Bakery. I stopped in yesterday for a blueberry muffin and coffee, and they were delicious. I loved the hint of cinnamon in the muffin! Was that your idea?
I wanted you to be the first to know we are now offering commercial vehicle insurance to our policyholders. Auto insurance for your catering vans is super important since your personal car insurance won't cover them.
We're offering this insurance coverage solely to our current business clients at the moment and have some very competitive rates.
Would you like me to work up a quote for you?
As always, thanks so much for being a part of the ABC family.
6. Asking For Referrals
Once your relationship is established and comfortable, let your clients help you grow.
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You've been a valuable member of the ABC family for two years now, and we so appreciate your business–not to mention the muffins you supply for our monthly meetings!
Because you are a valued policyholder, I wanted to ask a quick favour. I know you are active in the local Chamber of Commerce, and I'm hoping you might know some colleagues who would benefit from working with our insurance company.
Referrals are one of the most effective ways to connect with our community since people really trust their friends, family and colleagues. Is there anyone you'd recommend I speak with?
Remember that in addition to business insurance products, we offer everything from life insurance policies to pet insurance.
As a thank you for your help, we will send you an Amazon gift card of $100 when your referrals buy insurance from us.
Thanks so much for your help!
7. Policy Renewal
If your client needs to renew their policy with you, send an email like this:
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I hope you're doing well! What a year it's been—from being listed as one of the top 5 bakeries in Dallas to being an official vendor for the city—you have so much to be proud of.
Just a heads up that your business owner's policy is up for renewal soon and will expire on June 15, 2023.
If you're still happy with the coverage, we can easily renew it for you.
Do you have some time to chat this week?
Looking forward to serving you again!