Types of Benefits
There are two general categories of workers’ compensation benefits, medical and indemnity. Medical treatment that is medically reasonable and necessary and serves to cure or relieve the effects of the injury is compensable. Disputes may arise over the kind of treatment the injured worker receives, and courts and legislators try to strike a balance between the patient’s right to select medical care and the employer’s right to curb excessive or unnecessary treatment.
Indemnity benefits are those that attempt to compensate the injured employee for lost earnings or earning capacity caused by the work injury. Some injured workers never lose time from work and may be entitled only to medical benefits. Other injured workers are out of work temporarily and receive temporary total disability payments, usually two-thirds of the worker’s average wage. Injured workers who are able to return to a job only part time or at a reduced wage receive temporary partial disability payments, which supplement the worker’s reduced paychecks. Workers who sustain injuries that cause permanent disability are entitled to permanent partial disability payments if they are able to return to work. The calculation of permanent partial disability payment varies among states but usually depends on a disability rating given by a doctor. If a worker is permanently precluded by a work injury from ever working again, that worker is deemed permanently and totally disabled and may receive workers’ compensation benefits until retirement or death. When a work injury causes death, most states require the payment of dependency benefits to the employee’s spouse, children, or both.
The workers’ compensation system is criticized at times for being outdated in a post-industrial age world. Workers’ compensation premiums and expenses drive up the cost of products, and the system is made more expensive by fraud and litigation. Disputes often arise between employers and employees regarding the legitimacy of workers’ compensation claims. Yet proponents of the system say it is effective in returning injured workers to work and that it promotes safe workplaces.