The 4 Parts of Workers’ Compensation

the 4 parts of workers compensation text overlaying a photo of a construction worker It’s hard to say which type of business insurance is most important for your business. They all cover specific things and keep your business protected in different ways. But there is one type of commercial insurance that you are most likely required by law to have if you have employees: workers’ compensation.


This type of policy covers you and your employee if they are hurt while working, or sick because of workplace conditions. Workers’ comp in nearly every state covers medical expenses, disability, rehabilitation, and death benefits. And while there is some uniformity in regard to the benefits available to injured workers across the country. There is considerable variation in the amounts and methods each state distributes. If you want to find out more about how workers’ comp works in your state, check out our state-by-state guide. Then talk to an EZ agent about what you need.


First, though, read on to find out more about how workers’ comp covers these four benefits (medical expenses, disability, rehabilitation, and death). So, you know exactly what to expect from your policy.

Compare Commercial Insurance Plans

  • Compare The Best Commercial Plans For Your Business!

Medical Expenses

At its core, workers’ compensation covers medical expenses incurred by employees who get sick or hurt on the job. It will cover most medical expenses for most legitimate claims. Including bills that come from visits to the doctor, inpatient care, skilled nursing care, medication, diagnostic imaging, physiotherapy. And the cost of long-term supports like walkers and wheelchairs. 


In some states, though, there’s no coverage for “alternative” therapies like biofeedback and massage. And it’s possible that one state may cover a treatment while another won’t. Additionally, in some states there are limits on certain treatments. For instance, the law might allow no more than twenty-four visits to a chiropractor or physical therapist.


In most cases, workers’ comp does not have spending caps, deductibles, or copayments. And workers will be eligible for benefits until they have made a full recovery from their injury. 

Managed Care

A managed care organization (MCO) is a healthcare provider or group of healthcare providers that has a contract with an insurer or self-insured employer to provide managed healthcare services to enrolled workers. In many states, benefits through a managed care plan can be provided by employers or workers’ compensation insurers to get injured workers the care they need. In fact, insurers in some states legally have to offer this option to businesses. 


Managed care plans are governed by a wide range of statutes. Typically, a plan will include some combination of the following:


  • Provider Networks – A network of medical professionals who have agreed to provide discounted services to members of an insurance pool or employee group. In some states, injured workers will have to receive care from in-network providers.
  • Utilization Management – This type of management is intended to ensure that the type of medical care that is provided to workers is necessary, appropriate, and efficient with regard to costs. Before carrying out particular medical procedures, providers might be have to get prior approval from the insurance company.
  • Pharmacy Benefits Manager – An administrator of a program that purchases prescription drugs whose job it is to limit spending. A pharmacy benefit manager (PBM) is responsible for establishing formularies, negotiating discounts with drug manufacturers, forming contractual relationships with pharmacies, and paying claims for prescription drugs.
  • Medical Care Management – This type of management provides supervising care to make sure that injured workers get the appropriate treatment they need. So, that they can get back to work as quickly as possible.


Disability benefits compensate an employee for a portion of the wages they lose while they are unable to work as a result of an injury on the job. For instance, if a construction worker breaks their leg in an accident. It is highly unlikely that they will be able to return to work until they have fully recovered. Because of the amount of time this will take, they will require financial assistance during this time when they cannot work. 


“Disability” as it relates to workers’ comp has four distinct categories:


  • Temporary Total Disability (TTD) – To receive TTD benefits, your employee must have been injured so severe that they will not be able to return to work at all for a long time. For example, if a worker sustains an injury to their back and is subsequently unable to perform any duties for six weeks, but will then return to their regular responsibilities.
  • Temporary Partial Disability (TPD) – Your employee has a relatively minor injury that has only temporarily rendered them partially disabled. For instance, a worker breaks their arm while they are on the job and must work reduced hours. They’re able to still work just not to their full capacity.
  • Permanent Total Disability (PTD) – If your employee has an injury that will not heal and will be unable to generate income in the future by performing the kind of work they were doing at the time of the injury.
  • Permanent Partial Disability (PPD) – The injury your worker suffers might affect them permanently, like an injury that causes hearing loss, but they might still be able to work. The injury, though, might prevent them from earning as much income as they did before their injury. 

Disability Payments

The severity of a worker’s disability will determine how much money they will receive from workers’ compensation benefits. In general, your employee’s average weekly pay prior to the injury is the basis for the calculation of benefits. This amount, though, might be subject to minimum and maximum limits, depending on your state. There will be a waiting period before benefits are provided, which is typically one week. If the disability lasts less than that period of time, your employee will not be eligible for benefits.


Typically, disability benefits are as follows:


  • Temporary Total Disability – With TTD, benefits will be paid while your employee is recovering. Typically, these benefits are calculated as a certain percentage of the worker’s average weekly wage. For example, if a worker whose normal weekly wage is $1,000 is unable to work due to a broken leg for a period of two months. They will get a total of $667 weekly over the course of the eight weeks.
  • Temporary Partial Disability – With TPD benefits, your worker will typically receive their normal pay in addition to a percentage of the difference between their normal pay and their reduced pay. This is the case when the worker receives compensation for work that they are able to perform. For instance, a worker who sustains an injury to their leg is unable to perform their regular job duties because those duties require them to stand. They typically make $1,000 a week. During the two months that it takes for their leg to heal, they are responsible for performing administrative work. This job only pays $500 each week. So, there is a difference of $500 per week between their regular pay and their current pay. They will earn $500 per week plus $333 (66.66% of $500). For a total of $833 per week while they are unable to perform their normal duties.
  • Permanent Total Disability – A worker who is totally and permanently disabled will typically receive compensation equal to 66.66% (or some other specified percentage) of their previous average weekly wage for the rest of their life. When an employee reaches the official retirement age in some states, the benefits they have been receiving will end.
  • Permanent Partial Disability – A permanent partial disability may be classified as either “scheduled” or “non-scheduled” in some states. Injuries on the schedule typically involve a specific limb, organ, or part of the body. A worker who suffers a permanent injury to a body part in the schedule can receive disability payments for a specific period of time. If an employee loses a finger on the job, for instance. They may be eligible for 45 weeks of disability pay at 66.66% of their regular wage.


Disability benefits for employees with a permanent partial injury not on a schedule are determined in accordance with applicable state law. Benefits may be calculated in accordance with the worker’s degree of impairment, loss of earning capacity, wages lost. Or some other factor, depending on the state.


Compare Commercial Insurance Plans

  • Find The Right Commercial Plan For Your Business Needs!



The part of workers’ compensation that covers rehabilitation helps if something catastrophic happens to an employee that prevents them from working and requires long-term treatment for recovery. For example, if an employee has a history of mental breakdowns, such as after prolonged exposure to toxic stress. They may not be able to work for a time. But rehabilitation and therapy during this time may help them recover. Although they may no longer be able to return to your place of work.


Rehabilitation can also include a service called Transferable Skills Analysis, which can help the employee in these situations. The goal of this program is to assist participants in securing gainful employment that puts their acquired skills to use. Their benefits cover the cost of a case manager who will assist them in their job search.


If an employee dies on the job, his or her dependents will receive workers’ comp death benefits. This protection is in place to help families deal with the monetary fallout of a loved one’s death. This type of coverage will help the deceased’s loved ones pay for funeral expenses. And help replace the income they would have otherwise received.


It’s important to be aware of the laws and regulations in your state before purchasing workers’ compensation insurance. It’s also vital that you stay well-informed on your insurance policies. So, that you can communicate effectively with your staff in the event of an accident.

Working With EZ

EZ.Insure knows that in order to succeed, businesses must have all the information possible. That’s why we’re here to answer all of your questions about the commercial insurance policies you need! But don’t worry, we know that your time and money are valuable. So, you won’t pay anything for our services. And you won’t have to worry about being inundated with calls from your agent as they answer your questions, help you compare plans, and sign you up when you’re ready. To start, either enter your zip code into the box below or call 877-670-3538 to speak with an agent. Thanks to EZ.Insure, getting insurance is a breeze.

Compare Commercial Insurance Plans

  • Compare The Best Commercial Plans For Your Business!

Happy Make a Difference Day!

While it isn’t Christmas or Halloween, we can still appreciate Make a Difference Day, a national day set aside for observing togetherness. Every fourth Saturday in October is dedicated to this idea. This year it is October 26th. It is mostly used as a great excuse to go out and bring your community together. While the focus is more on volunteer work, any type of service or gathering will serve to honor the spirit of this holiday.

happy volunteers for Make a Difference Day
You’ll find great people out on this day. Sign up at a local charity or search online.

When a leap year comes around, people often muse on what they can do with the time. In 1992, USA Weekend magazine, a large periodical, offered a suggestion for that year’s ‘leap day’. Why not take is as a way to improve the lives of others? It became so popular, the day was made into an official holiday. This year is October 26th, but it changes. So, next year will be October 24, 2020.

How Can You Help?

You don’t have to wait for a leap year to do some good in the world. Think about the time you have and plan for this October to get out and make someone’s day. Think about ay cause you feel particularly drawn to, or a group of individuals that you see need help. Just one day of service out of your year can make a difference in their lives.  

United Way hosted projects such as raking leaves for the elderly or disabled. Another volunteer, Maggie Leach, working with Points of Light, gathered $810 in quarters to donate to shelters for laundry. It just takes some insight into how you can help people, even with something small.

Here are some other ideas if you’re not sure where to start:

  • Building or painting community houses
  • Volunteering at your local animal shelter or zoo
  • Cleaning up a park or public sports field
  • Raising money for charities


Be Social on Make a Difference Day

adults jumping on a beach after volunteering
Think of all the good you can do in just one day. It doesn’t have to be on the holiday, but it is easier.

Even if you can’t get out of the house for a day, you could host a gathering for your neighborhood and ask for any spare change to donate to your local shelter. Just keeping the spirit of community alive for your neighbors can honor the day. Or, perhaps you may have a yard sale and ask your friends for donations. Clearing out your attic can turn into money to help local food banks. If you can’t spare time to help on this specific day you can always volunteer another. This holiday is once a year but help is appreciated all year long!

For the tech-savvy amongst us, you can use this time to spread awareness of the day using hashtags. Commemorate your service by posting selfies to Facebook or Instagram with #MakeADifferenceDay. You may find others in your area doing the same thing, and you can merge your efforts together. 

It doesn’t take much to help each other. If we put in some effort, on this day or another, maybe we can make this world a better place