Who Pays Workers’ Compensation Insurance Premiums?
In New Jersey, workers’ compensation is insurance designed to provide benefits to employees who fall ill or sustain an injury in the line of duty. Under the New Jersey Workers’ Compensation Act, all employers are required to carry this coverage to protect their workers.
But, who pays for workers’ compensation insurance premiums? In one way or another, employers make premium payments, and the claims are administered by various organizations.
Are you an employee who has been injured at work or an employer with questions about workers’ compensation? Contact a North Bergen Personal Injury Attorney today to discuss your concerns.
When Provided by the State
In many states, the United States Department of Labor — through the Bureau of Industrial Relations or Department of Commerce — administers workers’ compensation programs or funds. These government programs act like an insurance company and pay out approved claims. Some employers, especially small business owners, choose to get their insurance coverage from these programs.
When an employer is part of a state-run insurance program, they pay premiums to the state department. The department is then placed in charge of evaluating claims, determining the benefits owed, and facilitating the payments to the employee.
When Provided by an Insurance Company
A good number of employers also decide to get their workers’ compensation insurance coverage from private insurance companies. Small businesses and large corporations have the final say on the company they choose to work with. That said, not all states allow this, including Washington, which prohibits employers from seeking coverage from private insurers.
When an employer gets their coverage from an insurance company, the company administers all workers’ compensation claims. It investigates, approves, or denies, and pays out workers’ claims. The employer, in turn, is expected to pay monthly or annual premiums to the company.
Employers can self-insure if they are large enough and can prove that they have enough resources to cover the estimated liability associated with their industry. Such companies are required to submit to oversight by the state in which they operate to ensure workers are protected at all times. In this case, the employer does not pay premiums but uses the company’s assets to pay benefits when a claim arises.
Most self-insured companies will usually hire a third-party administrator to handle compensation claims on behalf of the management. The administrator will then oversee:
- Claim investigations
- Claim managements
- Benefits payment
Because self-insured employers have the greatest financial risk in workers’ compensation claims, they tend to employ significant resources toward fighting claims. An expert attorney can ensure you don’t get cheated out of what you deserve.
Talk to a North Bergen Personal Injury Attorney
Who pays for workers’ compensation insurance premiums? Employers, in one way or another, are responsible for making these payments but different organizations may administer claims. This could be the state government, an insurance company, or a third party administrator.
Attorney Anthony Carbone, an experienced North Bergen Personal Injury Attorney, has been fighting for the rights of injury victims in New Jersey for over 30 years. Contact the Law Offices of Anthony Carbone at 201-733-2230 to discuss your rights.