Keeping Your Head Above Water: How to Minimize the Financial Effects of a Work Injury

Most people do not think about what would happen to them and their families if they were severely injured on the job. In fact, when people are injured on the job and cannot work, they are often surprised at the time it takes to return to work on a full-time basis. They are even more surprised to find out how complicated workers’ compensation law is and how easily it is to miss out on important financial benefits. These benefits have been specifically designed to ensure that injured workers are fairly compensated. However, sometimes the law does not seem fair when the unexpected happens.

This article has been written to give practical advice to workers in California so that a medical crisis does not become a financial crisis as well. Surely, knowledge is power and injured workers do not have to feel powerless when they file a claim for injury.

The first thing to know is that your employer is required by law to provide medical care if you are injured at work and wage replacement benefits to you if you are unable to work for a period of time. When the workers’ compensation bill was initially signed into law over 100 years ago, employees gave up the right to sue their employers in the civil courts in exchange for employers providing benefits to employees if they become injured at work. California law requires that all employers keep and maintain adequate workers’ compensation insurance for their employees.

Most employers pay for workers’ compensation insurance to cover their employers, although some larger employers and government entities may be “self-insured” which means they have registered with the state to administer benefits directly. Either way, all employees, must be covered by workers’ compensation insurance.  

So, if you file a claim for benefits, you are not filing a “lawsuit” against your employer. By filing a claim of injury with your employer, you are in fact, notifying them that you have or believe you have suffered more than a minor injury that will require medical care and could affect your ability to work. “Filing a claim” means that you have completed a DWC-1 Form (the claim form) and have given it to your employer. From there, the employer completes the bottom portion of the form and turns it into their insurance company or administrator. The insurance carrier will then contact you to begin providing benefits or to further investigate your claim. The employer is required to provide you with this form within 24 hours of knowledge of your injury, however, if they do not, you may obtain the Form DWC-1 online at www.dir.ca.gov/dwc/dwcform1.pdf.

Once your claim is filed, the insurance company administering your claim has 90 days from the date you file your claim to determine whether they will admit or accept that you have been injured at work and begin to provide you with benefits or deny your claim altogether. However, they are required to provide medical care worth up to a maximum of $10,000 during this time. The medical care you will be provided with is through the insurance company’s preferred providers, unless you have “predesignated” a physician before you were injured.

If your employer or administering insurance company has set up a “Medical Provider Network” (MPN) filled with medical providers they have chosen and has properly notified you, you will be required to treat with one of their providers unless you have predesignated a physician.

If your injury prevents you from working for more than three days and your claim is admitted, you will be entitled to “temporary total disability” (TTD) benefits for up to a maximum of 104 weeks total. The amount of TTD is two-thirds of your average weekly wage, subject to a set weekly maximum amount and is paid to you by the insurance company administering the claim every two weeks. The amount is based on your average weekly wage, which includes overtime hours and other financial benefits received from the employer. TTD is essentially “wage replacement” you receive while you are unable to work.    

If the insurance company does not immediately admit your claim and start to provide you with TTD, there may be a period of time that you will not have income if you are unable to work. Remember, they have 90 days to investigate your claim and there is no guarantee they will admit your claim.

If your employer pays into State Disability Insurance from your wages (some governmental agencies do not) you should apply for it right away through the Employment Development Department (EDD) either at any of their office locations or online at www.edd.ca.gov/Disability/Filing_for_State_Disability_Insurance_(SDI)_Benefits.htm.

The reason for applying for SDI is simple: there is no guarantee that your claim will be admitted by the insurance company, even when it appears obvious that your injury happened at work.

Further, you cannot receive SDI and TTD at the same time or for the same period of time, except in limited circumstances. If you receive SDI for a period of time and then the insurance company begins providing you with benefits, you should advise the EDD and make sure that the insurance company has paid them back any benefits you received. Otherwise, you may end up owing EDD.

You are eligible for SDI if you are unable to work for at least 8 consecutive days, you were employed or actively seeking employment when you became unable to work, you are under the care of a licensed physician, and you show enough earnings during a “base period.”  The base period refers to quarters in a year immediately preceding your claim.

So, it does not matter whether you were injured at work or otherwise, if you have paid into SDI for the appropriate quarters immediately preceding your claim and a physician certifies that you are unable to work, you may receive these benefits for a maximum of 52 weeks. Any licensed physician can certify that you are unable to work.

There is a secondary reason that you should apply for SDI benefits at the same time you file a workers’ compensation claim. Since there is a base period requirement, if you wait too long after you become unable to work, you may lose the ability to obtain these benefits entirely.

Filing a SDI claim in effect “locks in” your wages earned, so even if the EDD denies your claim because you begin to receive TTD benefits, you have created a financial safety net for yourself.  If you run out of TTD benefits (104 week maximum) or there later becomes a conflict between physicians as to whether you are still unable to work, you will have up to another year of benefits while you recover from your work injury.

Because there are few exceptions to the 104 week cap on TTD benefits, it is best to apply for SDI if you are eligible. The TTD cap exceptions are as follows:  acute and chronic hepatitis B or C, amputations, severe burns, HIV, high-velocity eye injuries or chemical burns to the eyes, pulmonary fibrosis or chronic lung disease.

There are some things you can do at home to minimize the financial effects of your work injury. Stop any unnecessary or duplicative services that you receive in your home. For example, if you have a cellular telephone service and a telephone or “land line” service in your home, consider only keeping the less expensive service. If you have television service in your home, contact your provider and reduce your service package to a basic level, or eliminate it altogether. Contact your electricity and gas provider to find out if you qualify for assistance due to your reduced income level.

If you pay a mortgage, car loans, student loans, or have credit cards, contact the lenders and review your contracts to determine if there are any temporary payment cessation programs you may enroll in due to your reduced income. 

If you pay child support, contact your attorney or visit the legal self-help desk at your local government center to find out whether you may temporarily reduce the amount due to the reduction in your reduced income.

If your employer provided you with an employee handbook, review it for company policies with regard to reporting requirements and benefits offered such as long-term and short-term disability insurance policies.

Finally, if you are a member of a union, obtain a copy of your contract or handbook from your union representative and review it so you know what your rights and responsibilities are with regard to health benefits and other financial benefits that may be available to you.

Having a work injury does not have to mean financial ruin for you and your family. Taking immediate steps after you have a work injury can relieve the financial stresses of a work injury so you can get back to work with minimal interruption to you and your family.