What Is Workers' Compensation Coverage A?

Workers' compensation coverage A refers to an insurance policy that protects employees under state laws and provides medical care, death, disability, and rehabilitation benefits for workers who are injured or killed while on the job. The insurer agrees to pay all compensation and benefits related to the insured employer's state's workers' compensation laws without any regard to liability. Workers' compensation coverage premiums are based on the employer's payroll and the type of duties its employees perform.

Key Takeaways

  • Workers' compensation coverage A protects employees under state laws.
  • It provides medical care, death, disability, and rehabilitation benefits for workers who are injured or killed while on the job.
  • The benefits of workers' compensation are generally awarded on a no-fault basis.
  • Premiums are based on the employer's payroll and the type of duties its employees perform.

Understanding Workers' Compensation Coverage A

When an employee is injured, disabled, or dies while on the job, the employee or their survivors are entitled to Workers' compensation coverage A benefits. Under this type of insurance, the employer pays certain benefits such as medical care, lost wages, and rehabilitation costs.

The benefits of workers' compensation are generally awarded on a no-fault basis, as long as the employee is not under the influence of drugs, including alcohol. Employees are usually required to submit to a drug test following an on-the-job accident. Many workers' compensation incidents provide partial reimbursement of lost wages, and survivor benefits in the event the worker is killed while on the job.

Workers' compensation Part A satisfies state insurance requirements. It funds employees’ medical bills, related expenses, and lost wages in the case of a covered workers’ compensation loss. Payments made are normally based on predetermined schedules in the case of defined injuries. Expenses are paid accordingly as the adjuster calculates them.

Workers' compensation Part A has no policy limits, and the insurer instead pays all benefits required by the workers’ compensation law of any state listed in the declarations. However, the employer can be held responsible for payments made by the insurer that exceed regular workers’ compensation benefits. Under such circumstances, an employer would be responsible for such payments due to the following:

  • Serious and willful misconduct
  • Knowingly employing workers in violation of the law
  • Failure to comply with health or safety regulation
  • Discharge, coercion, or discrimination against any employee in violation of the workers’ compensation law 

Under this misconduct, the employer is responsible for reimbursing the insurer for any payments that exceed regular workers’ compensation benefits.

Special Considerations

Workers' compensation Part A is legally mandated in nearly every state in the United States and is a significant expense for employers. Employers may pay more if the company has had a certain number of previous claims, or if its employees have certain occupations that are deemed dangerous.

Workers' Compensation Part A is legally mandated in nearly every state.

Workers' compensation coverage continues to grow in every state, according to the most recent statistics from the National Academy of Social Insurance. In the two-year period between 2015 and 2017, American worker coverage rose to 3.2%, while covered wages also increased by 8% between the same period. But the report indicated an overall decline in employer costs and worker benefits. Total benefits paid, on the other hand, dropped. Employers paid $62.0 billion in 2017—a 2.2% decrease from 2013—while costs related to workers' compensation for employers totaled $97.2 billion.

Patient Outcomes

Patients with workers' compensation generally have worse clinical outcomes than those who don't. Those who do and have upper extremity surgeries return to work at lower rates. When they do, they take longer to return. This may be because their jobs are more taxing to their upper bodies and because they may receive more compensation after having a post-operative disability.

Workers' Compensation Part A vs. Part B

Unlike workers' compensation Part B also covers medical care, lost wages, and rehab costs for employees who are injured on the job. But unlike Part A, Part B coverage covers employees when the employer is liable through negligence or otherwise, which is also why it's called employers' liability coverage. While Part A covers state requirements, Part B also pays additional damages up to certain limits.