Understanding Workers’ Compensation Insurance for Small Businesses

Depending on the circumstances of the injury or illness, injured workers are entitled to specific benefits as structured by workers’ compensation insurance. There are several types of workers’ compensation benefits available to injured workers, including medical care, temporary disability benefits, permanent disability benefits, supplemental job displacement benefits, and death benefits.  Injured workers may be entitled to one or more of these benefits.

Income benefits replace some of the money you lost because of your work-related injury or illness. (except for impairment income benefits). Types of income benefits include:

• Temporary income benefits (TIBs)

• • • Temporary Income Benefits (TIBs) are Texas workers’ compensation benefits paid to injured workers who cannot work.  These benefits are a replacement for lost wages.  When a work injury prevents you from being able to work, that is called disability in the workers’ comp system.  Even if you can work light duty but earn less than your regular pre-injury wages, you have a disability.  Anyone with a disability is owed benefits.

• Impairment income benefits (IIBs)

• • • Employees who have a work-related injury or illness that affects their body as a whole may get Impairment Income Benefits (IIBs) based on an impairment rating given by a healthcare provider. The amount of IIBs is calculated based on the percentage of permanent damage done to the body. The exam for the impairment rating generally happens once an injured employee reaches maximum medical improvement (MMI). The benefits are calculated based on the average weekly wage, and the insurance adjuster is required to pay 70% of the AWW for each week that IIBs are owed. The minimum rate for these benefits is $151.00, and the maximum is $705.00. Any employee with permanent impairment is entitled to these benefits.
  • Supplemental income benefits (SIBs)
    • Supplemental Income Benefits (SIBs) are paid monthly by the insurance carrier after Impairment Income Benefits (IIBs) have ended. Employees with an impairment rating of 15% or more, who have not returned to work or have earned less than 80% of the average weekly wage due to injury, can qualify for SIBs. They must also show they are looking for work and not accept a lump sum payment for their injury.
  • Lifetime income benefits (LIBs)

• Employees are entitled to lifelong benefits in the event of certain permanent disabilities. These disabilities include total and permanent loss of sight in both eyes, loss of both feet at or above the ankle, loss of both hands at or above the wrist, loss of one foot at or above the ankle and one hand at or above the wrist, injury to the spine causing permanent and complete paralysis, physically traumatic brain injury resulting in a permanent neurocognitive disorder, third-degree burns that cover at least 40% of the body, third-degree burns covering the majority of both hands, one hand and one foot, or one hand, one foot and the face. 

• Death Benefits

• • Under the Texas Workers’ Compensation Act, if an employee dies due to a work-related injury, the employer’s insurance company is required to pay death benefits to all legal and eligible beneficiaries. The most common beneficiary is the spouse of the worker. In this blog post, we will provide you with all the necessary information to help you collect death benefits if you are the spouse of an employee who died on the job.
  • The death benefits paid by the insurance company are equal to 75% of the employee’s average weekly wages before the unfortunate incident. These benefits are usually paid by check and sent out on a weekly basis. Employees can also elect to receive the benefits on a monthly basis, you can discuss this option with the insurance company and reach an agreement accordingly.
• Medical benefits 
  • Medical benefits cover necessary medical care for work-related injuries or illnesses.
• Death & Burial Benefits 
  • Death benefits are available to the beneficiaries of an employee who dies due to a work-related illness or injury. The beneficiaries include surviving spouse, children, grandchildren, dependent family members, and non-dependent parents. A legal beneficiary can receive death benefits from the day after the employee’s death. Death benefits amount to 75% of the deceased employee’s average weekly wage, and there are minimum and maximum limits. The spouse can receive benefits for the rest of their life unless they remarry, while children can receive benefits up to age 18, or 25 if enrolled in an accredited college. Other dependent family members can also receive benefits, but there is a time limit for each dependent. To file a claim, a DWC Form-042 must be submitted within one year of the employee’s death.
  • Burial benefits pay for some of an employee’s funeral expenses to the person who paid those expenses.