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February/March 2020  Volume 18, Number 1        

letter stamped DENIED

When Are Workers Comp Claims Denied?

While workers' compensation is essentially a no fault bargain between employers and employees there are a number of reasons claims can be denied.

Workers compensation is essentially a no-fault arrangement or "bargain" between employers and employees. The "bargain" is that employees give up the right to sue their employers for injuries arising out of their employment in exchange for the employer's guarantee to pay on a no-fault basis most medical and indirect costs relating to those injures, including disability payments and rehabilitation expenses, if needed.

There are, however, guidelines for workers compensation eligibility:

  1. The claimant must be an employee.
  2. The employer must carry workers' compensation insurance or have "opted-in" to the workers compensation laws of the states where it does business. A self-insured employer or employer in Texas (where workers compensation insurance is optional) would probably want to do this. Otherwise the "no-fault" bargain would not apply and the employee could sue the employer for injuries.
  3. The injury or illness must be work-related.
  4. The state's deadlines must be complied with for reporting the injury and filing a workers' comp claim.

Claims can be denied, usually for one of the following reasons:

  • Injury was not reported in time: State deadlines differ as to when employees need to report injuries to their supervisors and for filing a claim. Injuries usually need to reported within 24 hours.
  • Claim was not filed in time: States have different deadlines for filing an initial claim, typically 30 to 90 days. If a claim is filed after someone left the job, there are special rules that apply, depending on the state. The important thing in those instances is that the claim was reported timely to a supervisor in the first place.
  • The injury is not compensable according to state guidelines. Some states have special restrictions on workers' comp claims for cumulative trauma or psychological conditions. Some states rule out workers' comp benefits for illnesses caused by long-term emotional stress at work – or hold the bar very high for them (though in California stress-related injuries are covered by statute).
  • There was no medical treatment: In most cases, medical treatment must be provided for an injury incurred in the course of employment in order to initiate workers' comp benefits.
  • The injury is not deemed to be work-related. It's not always clear whether an injury happened at work. This is often a contentious issue. In a recent case in Washington state, for instance, an Amazon worker claimed his shoulder was dislocated handling boxes as part of his normal job routine. He was denied workers compensation when it was established an injury affecting his shoulder occurred off hours.

Three other situations might also affect workers compensation eligibility:

  • Going and Coming rule — In general, injuries incurred going to and from work are not covered. But there are exceptions: as when traveling is a significant part of the job, commuting in a company car or traveling between job sites.
  • Idiopathic Injuries — these are injuries of unknown origin. For instance, when someone has a stroke or heart attack while at work. Unless there is some sort of connection to a job function, such an injury would be considered idiopathic and not covered.
  • Horseplay — Injuries resulting from horseplay can be barred from compensation. In general, the person initiating the horseplay would be denied benefits.

By the way, injuries caused by third parties either intentionally or negligently are compensable, though typically the employer's workers' compensation company (or the self-insured employer themselves) would subrogate the claim.

If you have questions about the workers compensation claims process as it applies to your business, please give us a call.

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In this issue:

This Just In...

When Are Workers Comp Claims Denied?

Workers Compensation Insurance Execs Look into the Future

Can Second Injury Funds Help Reduce Your Comp Costs?

Top 5 Workers Comp Fraud Schemes



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