Manage Workers' Compensation Costs

Employers in most states are required by law to carry workers' compensation insurance. This coverage protects employers from being sued by their employees over workplace illnesses or injuries, unlike disability insurance, which pays benefits to workers who become injured or ill due to non-work related circumstances.

Qualified Expenses

Qualified expenses depend on state laws, but may include:

• Medical services
• Rehabilitation services
• Lost income
• Vocational Training

Each state determines the amount and duration of workers' compensation benefits and how those benefits are administered.

Difficulties of Managing Workers' Compensation

Workers' compensation payments are based on an estimate of wages paid based on risk—electricians cost more to cover than desk workers. Since the premiums are not based on actual wages paid, insurers may require a large, upfront payment. And if your estimate is found to be low at the end of the year, you'll have to pay the difference in one lump sum.