One of the most common questions about workers’ compensation is “where the money given to an injured employee come from?” Though the specific systems vary a bit from state to state, the money comes from either a recipient’s employer or a state program. Some states have workers’ compensation insurance programs, while others issue payments directly from a company to the recipient.
In state’s with state-run programs, employers are usually given a choice whether to utilize that program. Most of the employers who take part in these state-run programs are smaller or have a low-rate of work-related injuries. Despite the state issuing payments, the money originally comes from payments made to the insurance program through employer-paid premiums.
In states that utilize private insurance companies for workers compensation, employers pay the private company which than issues payments to an injured employee.
Finally, some larger corporations opt to self-insure for workers’ compensation. In order to do so, they must be large enough and have enough assets to cover payouts. The programs are usually overseen by the state to ensure they are run properly. Most companies that self-insure use a third-party administrator to handle paperwork, and processing and management of claims.
Maryland’s Workers’ Compensation Program
In Maryland, in order to be in compliance with workers’ compensation laws, every employer must obtain workers’ compensation insurance from any insurance company licensed to write workers’ compensation insurance in the state or from the Chesapeake Employers’ Insurance Company. Employers also have the option of applying to become self-insured, which requires approval from the Workers’ Compensation Commission.
Employers who do not secure workers’ compensation insurance are subject to a fine of up to $10,000. In corporations, officers can be held liable for the fine. The entire cost of workers’ compensation insurance is the responsibility of the employer. An employer that deducts any portion of the workers’ compensation premium from an entitled employee’s wages is guilty of a misdemeanor.
For more information about Maryland’s workers’ compensation program, visit the website for the Maryland Workers’ Compensation Commission.
The goal of workers’ compensation is to ensure money is available to pay for medical care should an employee be injured while on the job. Employees are not held responsible for the cost of their care when they are injured during the course of their duties in the workplace. If you were injured on the job and have been told you are responsible for paying for your medical costs related to that injury, or you are not injured but you believe a portion of your rightful earnings are being used to pay workers’ compensation insurance premiums, you have a right to take legal action.
For more information or to discuss your situation with an experienced attorney, contact Shugarman & Mehring at 410.783.4200 or toll free at 888.342.7200 to schedule a consultation.