Who Qualifies for Workers’ Compensation?

In 2020, private-business employers reported approximately 2.7 million workplace injuries and illnesses. There were roughly 4,700 fatal injuries, representing the lowest number since 2013.

Workers’ compensation insurance can help employees who experience job-related injuries. This type of insurance provides benefits for medical bills, rehabilitation, and lost wages.

Below, we will review the rules for workers’ compensation and what’s covered. 

What is workers’ compensation?

Workers’ compensation — also referred to as workers’ comp — provides insurance benefits to employees. It pays cash benefits and medical reimbursement for work-related injuries and illnesses. The employer signs up for a workers’ compensation policy and pays the premiums. The carrier handles all the claims.

Each state has its own laws and requirements for workers’ compensation. States may have their own funds for claims or rely on private insurance companies.

The carrier or employer may dispute the workers’ compensation claim for many reasons, including potential fraud or insufficient evidence. This means that the employee receives no cash until the courts resolve the matter. States can provide disability benefits in the meantime.

Who is eligible for workers’ compensation?

Your employer must have workers’ compensation insurance if state law requires it.

Workers’ compensation qualifications vary by state. Some states — like North Carolina and Virginia — only require coverage if there are three or more employees. If you work for a small employer, you may not get coverage. Texas is also the only state that does not require a company to carry workers’ compensation.

But many employers still buy workers’ compensation. An important reason is that this means an employee cannot sue the company for work-related injuries. 

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You can visit individual state websites for more eligibility rules and requirements. Here are some state websites that can provide you with more information:

• Alabama

• Arkansas

• Florida

• Georgia

• Michigan

• Mississippi

• Missouri

• New Mexico

• North Carolina

• South Carolina

• Tennessee

• Virginia

You must be an employee to qualify for workers’ compensation. This means you cannot be a contractor or gig worker. You also usually cannot be a volunteer.

Employers sometimes misclassify employees as contractors. If so, you may be eligible for workers’ compensation. Because of the legal complexities, you should seek the advice from an attorney.

Workers’ compensation requires that you have a work-related injury or illness. This can include an incident not on the employer’s premises. An example is an incident that takes place while driving a vehicle to deliver your  employers’ products.

If the injury is work-related, you still may be denied workers’ compensation benefits. You must report your incident prior to state deadlines to qualify for benefits.

What benefits does workers’ comp cover?

Workers’ compensation covers medical costs. They include:

• Doctors’ visits

• Equipment like a wheelchair or walker

• Medication

• Surgeries

You may need to get authorization for medical treatments. Your employer or the insurance carrier will provide the notifications and forms.

Workers’ compensation may also pay for rehabilitation like physical therapy. Some states may provide for vocational rehabilitation. This would include training to qualify for a new job.

You or the employer will usually select your healthcare provider. The insurance company should cover deductibles and copayments.

Workers’ compensation allows for benefits for disability, including temporary or partial disability. These disability benefits are generally tax-free and may cover about two-thirds of lost wages. An exception is if you receive Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI). The IRS might tax a portion of the worker's compensation benefits in that case.

If you die from a work-related incident, your relatives should receive benefits. Workers’ compensation generally covers funeral expenses and partial payments for lost wages. You will file a claim with the state’s agency for workers’ compensation. The deadlines for filing a claim generally range from 6 months to 6 years.

What qualifies as a work-related injury?

Physical injuries are the most common form of work-related injuries. Examples include:

• Auto accident

• Burns

• Electrocution

• Falling object

• Machinery or equipment accident

• Slip and fall

• Violence

Workers’ compensation may cover occupational illnesses. An employee develops these over a period of time. They may not be aware of the problems until years later. For example, you could develop cancer because of exposure to asbestosis or toxic chemicals.

Other potential occupational illnesses include:

• Coal workers’ pneumoconiosis (CWP) or black lung disease

• Contagious diseases, such as COVID-19

• Hearing loss because of a noisy work environment

Repetitive stress injuries could also qualify for workers’ compensation. For example, extensive typing or use of machines can lead to carpal tunnel syndrome and back problems. However, some states may require more evidence to prove the injury was work related.

What types of injuries are not covered by workers’ compensation?

Many states require that you must experience a physical injury. A doctor must also provide a written statement that it is work related.

But there are certain medical problems that may require additional proof. They include diseases like heart attack, cancer, and stroke. Workers’ compensation also does not cover temporary ailments like colds, headaches, and flus. States will determine requirements to prove that your injury is reasonable and medically necessary.

Insurance usually does not cover services related to mental problems or stress. But there may be exceptions. Contact your insurance provider to get a better idea of what’s covered.

What situations don’t qualify for workers’ comp?

You are not eligible for workers’ compensation if you:

• Are intoxicated at the time of your injury

• Can continue to work without interruption

• Engage in unnecessary risky activities

• Injure yourself intentionally

• Start a fight

• Violate company policies

• Violate the law

In most cases, you also will not qualify if the injury happened on a commute, a break, or lunch. Workers’ compensation is provided to employees who were injured while working. 

How soon after a work-related injury do I have to file a claim?

You will file a report about your injury to your employer. Depending on the state, the deadline can range from a few days to up to 2 years. But generally, it is 30 days.

You should notify your employer as soon as possible. This means you will get your benefits sooner.

You should also get medical help promptly. If not, you may not get enough compensation for an injury or illness that got worse.

What is the process of filing a claim for workers’ compensation?

You will need to report your injury or illness to your employer. If you miss the state’s deadline, you could lose your benefits.

Your employer will usually apply for the workers’ compensation claim. They will send the documents to the insurance carrier and a state agency or board. The carrier will investigate the claim and either reject or approve it. This process can take up to a month.

If you have a severe injury or are disabled for a long time, you might want to get the help of a qualified lawyer.

When should I report an injury sustained at work?

This chart shows the deadlines for various states:

These are guidelines, and there may be exceptions. This is why you should review your state website. You may also want to seek the guidance of an attorney.

Can I get disability if I get hurt outside of work?

You will not be eligible for workers’ compensation for injuries sustained off the job. But you may apply for benefits from the Social Security Administration, if you qualify. There are two programs that offer benefits:

• Social Security Disability Insurance (SSDI): You must have a certain number of work hours. Your minimum work credits depend on your age. For 2022, the average monthly benefit for all disabled workers is $1,358.

• Supplemental Security Income (SSI): This is a needs-based program. You must have limited income and assets of lower than $2,000 if you are single, or $3,000 for married couples. In 2022, the average monthly benefit for SSI was $841.

Both programs have the same definition for disability. This is a physical or mental impairment that must either:

• Have a terminal illness that could result in death, or

• Prevent you from working for at least 12 months

Why trust our experts?

Written by:

Tom Taulli, EA

Tom Taulli, EA, founded and operates his own tax preparation and planning firm, Pathway Tax. He is a licensed enrolled agent and can represent taxpayers before the IRS. He can also prepare and advise on tax matters for all 50 states.

Edited by:

Charlene Rhinehart, CPA

Charlene Rhinehart, CPA, is a personal finance editor at GoodRx. She has been a certified public accountant for over a decade.

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