Workers' compensation pays for medical care for work-related injuries immediately; it pays temporary disability benefits after a waiting period of three to seven days; and it pays permanent partial and permanent total disability benefits to workers who have lasting consequences of disabilities caused on the job. This is in contrast to Social Security Disability Insurance payments, which begin five months after the onset of the injury or condition that makes the individual unable to work. Medicare coverage begins 29 months after the onset of the injury.
Medical only: Workers’ compensation pays 100 percent of medical costs for injured workers and pays cash benefits for lost work time after a three-to-seven-day waiting period. Most workers’ compensation cases do not involve lost work time greater than the waiting period for cash benefits. In these cases, only medical costs are paid. “Medical only” cases are quite common in workers’ compensation, but they represent only a small share of overall payments. According to the National Council on Compensation Insurance (NCCI), medical-only cases accounted for 75 percent of workers’ compensation cases, but only 7 percent of all payments of cash and medical benefits in the 38 NCCI-covered states for policy years spanning 1993–2013.
Temporary disability: Cash benefits differ according to the duration and severity of the worker’s disability. Temporary total disability (TTD) benefits are paid when a work-related injury or illness temporarily prevents a worker from returning to the pre-injury job or another job for the same employer for which the worker is otherwise qualified. Most workers who receive TTD benefits fully recover and return to work, at which time benefits end. In some cases, however, injured workers return to work before they reach maximum medical improvement, often with restricted duties and lower or differential pay. When injured workers return to work at less than the pre-injury wage, they receive temporary partial disability (TPD) benefits in most states. Temporary disability benefits are the most common type of cash benefits. Among NCCI states, TTD cases have varied between 58-72 percent of cases involving cash benefits in the years 1993-2013 but accounted for less than 34 percent of cash benefits paid in those cases.
Permanent disability: If an injured worker has severe impairments that are judged to be permanent after he or she reaches maximum medical improvement, permanent disability benefits may be paid. Permanent total disability (PTD) benefits are paid to workers who are unable to work because of a work-related injury or illness. Permanent partial disability (PPD) benefits are paid when the worker has physical impairments that, although permanent, do not completely limit his or her ability to work. In NCCI states, PPD cases have varied between 27-41 percent of cases involving cash benefits in the years 1993-2013 but accounted for 56-69 percent of cash benefits paid. Permanent total disability cases are relatively rare, accounting for less than 1 percent of cases involving cash benefits and 6-12 percent of total payments for cases in the period 1993-2013.
Fatalities: Workers’ compensation programs also pay death benefits when a work-related illness or injury is fatal. The benefits typically include an amount for funeral and burial expenses, and cash benefits for the worker’s family or dependents. For workers who die without dependents, benefits are limited to funeral and burial expenses. Between 1993 and 2013, on an annual basis, fatalities accounted for less than 0.5 percent of cases involving cash benefits and between 2 to 3 percent of total payments in NCCI states.