Where do workers compensation benefits come from?
Thats actually a multi-factorial question — there are multiple types of workers compensation benefits, in a sense.
Some employers are big enough that they’re self insured, and so they use their own money to fund their workers’ compensation program. They usually higher a TPA we call them, a Third Party Administrator, to process those bills, to process those benefits. But those moneys come from the employer.
It is also possible for an employer to buy an insurance policy. Just like a regular auto insurance policy. You have insurance, and if there is a claim, the insurance company handles it and the employer has no input into it whatsoever.
And then there are some hybrid plans, where the employer contributes a certain amount of money they pay in, and then the insurance provider may start paying if a claim goes over a certain amount. And sometimes an employer will have input into those cases.
So where the money comes from varies, how much input the employer has into the case varies. It is very common for me to have someone come in very upset that their employer is opposing a workers’ compensation claim, and it turns out their employer isn’t opposing it, but that the insurance company their employer has purchased insurance from is opposing the claim.
Sometimes this helps people to understand that it’s not necessarily their employer who they have worked for for five years that’s doing them wrong, but it’s instead the insurance company that is challenging the veracity of their claims.