As a company that employs workers, you have an obligation to your staff. You must compensate them for their labor. You additionally have an obligation to protect them from injury on the job. Part of that obligation involves investment in safety equipment and training your employees. You also have the obligation to carry workers’ compensation insurance.
In New York, employers can either purchase a specific policy or may have the option of self-insuring. In a self-insurance arrangement, the business pays directly for the medical needs and wage losses of workers hurt on the job.
There are many rules and laws aimed at ensuring that those who need benefits can receive them. These rules apply to insurance companies and self-insured businesses. Will a denied claim potentially affect your self-insured status as a New York employer?
New York treats self-insurance as a privilege
Allowing a business to self-insure gives them the opportunity to reduce their operating costs. However, those savings could evaporate immediately after even a single worker injury. Companies may have to pay tens of thousands of dollars in medical care and wage replacement for a worker who got hurt on the job.
In the event of a claim, outside insurance is usually the lower-impact solution for a business. While their premium might increase, they won’t have to absorb the full cost of the claim. Self-insured employers will be responsible for everything themselves. This trade-off works for many businesses, but they could lose the right to self-insure if they handle claims improperly.
Defending against questionable claims
While workers have the right to coverage when they do have medical issues because of their work, companies have the right to protect themselves against claims that don’t seem valid.
You will want to carefully review any major claims to make sure they are valid and that the employee isn’t trying to get more benefits than they should receive or make your company responsible for an injury that happened off the clock. Still, denying claims that the state later determines are valid could impact your self-insure privilege.
In order to protect your status as a self-insured employer, you need to be cautious about how you respond to employee claims. You have the right to defend your company against exaggerated or inappropriate claims, but you may need help in fine-tuning your approach so that you don’t run the risk of losing out on the option to self-insure.
