Most employers in California, including employers located outside the state that have employees who regularly work here, are required to carry California work comp insurance. These programs insure employees in the event of an injury or illness that arises in the course of employment. The scope of covered injuries is quite broad. It includes injuries from single accidents, like a broken arm suffered in a fall, as well as certain types of injuries that arise through repeated stress, like carpal tunnel syndrome. Diseases can be an especially important source of risk for employers in certain industries, like construction, where unsafe exposure to chemicals or dust could give rise to respiratory problems.
If California work comp insurance was only required to cover basic medical treatments for predictable kinds of injuries, it might have been a simpler system. But health care and employment are both difficult topics to capture in simple ways. Mandated coverage can differ from state to state. In California employers are required to provide these benefits:
- Medical care, including medically necessary prescriptions and other forms of intervention.
- Temporary disability benefits, such as wage replacement.
- Permanent disability benefits, which may include wage replacement as well as other benefits.
- Death benefits payable to an employee’s spouse and children in the event an employee dies from injuries sustained on the job.
- Supplemental benefits to assist employees who are displaced from their jobs as a result of their injuries.
Some workers’ compensation claims are straightforward. A sprained ankle or a dislocated finger might involve simple treatments and little or no downtime for the patient. But many claims are tricky. If an injury entitles an employee to disability benefits or leads to medical complications, the claims process may go on for some time. Paperwork needs to be completed accurately and on time. Claims need to be coded correctly to avoid delays in benefits and misunderstandings with insurance providers. All of these issues make it necessary for an employer to dedicate resources to developing expertise on the workers’ compensation system, or hiring an outside firm to handle some or all of the claims management process.
Workers’ compensation insurance can be a significant expense for temporary staffing firms. If the cost of a workers’ comp program is not controlled with care, it can render a business unprofitable and unsustainable. Bringing costs down requires a comprehensive risk management plan that takes into consideration the full range of hazards faced by employees. In the case of temporary staffing firms, that can mean an examination of client work sites, implementation of an employee training program, and other steps.