An insurance company says a doctor provided false info. The doc has no comment. Meanwhile, the psychologist says the insurance overruled his decision and handled the case so poorly he’s not going to take workers’ comp cases anymore. And then there’s Neil Eckelberger — the guy in the middle of it all trying to get on with his life after a devastating accident at work left him with ringing ears and painful skin grafts. Seventeen months later, he’s still fighting with insurance. It’s a cautionary tale .
Any form of insurance is a gamble and we don’t expect it to be perfect. But we keep our end of the bargain by paying our premiums and we expect insurance companies to keep their end by covering the unexpected incidents we’ve insured against. The above story shows just how vulnerable we are to the companies we trust with our insurance policies. So let’s dig a little deeper into who needs workers’ comp insurance and where the industry is going.
Who needs workers’ comp insurance?
Offering proper insurance is crucial for every company with employees. Of course, the best claim is the one that’s never filed and we talked recently about how companies can mitigate risk when it comes to workers’ comp. The point remains, though. At its best, insurance protects the employee and the employer. By putting the onus on the insurance company to address claims, companies ensure against lawsuits for accidents and injuries that occur on the job while still ensuring workers get the care they need.
While some companies don’t want to offer coverage on such a small scale, some suggest that even freelancers need coverage. The higher the job risk, the more important the coverage. Freelancers who feel this investment might be important for them may consider checking if their state has a state-sponsored workers compensation fund where self-employed contractors may apply for coverage.
What else?
The cautionary tale above ends with the reporter saying the whole thing highlights the need for reform. Maybe it’s to be expected that a complex subject like workers’ comp would come with some issues. Take the following headlines (from this week alone!) for example:
- Do high health plan deductibles lead to more workers’ compensation claims ?
- Participants in $200 million dollar workers’ comp scheme sentenced
- Orlando Apollos will start practicing in Georgia because of Florida workers’ compensation laws
- Workers’ compensation costs rise; Unified focuses on safety
- Buffett confirms Berkshire Hathaway selling workers comp unit
These headlines indicate that workers abuse the system, employers are attempting to curb costs, health insurance issues may bleed over into workers’ comp, doctors are fed up, and Buffett is bailing. Perhaps these issues point to the canary in the coal mine that this battle is just beginning.
The bottom line
The list of reforms is long and everyone has a different opinion. But one thing isn’t up for debate: workers’ comp is important to both employers and workers.
The best workers’ compensation insurers will respond quickly and address claims fairly. As usual, some companies are better than others. You never know how an insurer will handle a claim until you’re involved. This guy Neil likely didn’t lose sleep over his coverage, but now he is really in a pickle. It’s a good idea to get personal recommendations. Ask people in your network who’ve had a front row seat to a claim how they felt their insurance company handled it. While cost is certainly a factor when choosing insurance, it pays to think beyond the numbers. If your coverage sucks, any claim you end up with will suck your time and energy into it. You have better things to do.
About PayReel:
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