We have talked almost exclusively in this blog about the various accidents, illnesses and injuries that can lead to a workers’ compensation claim in Colorado, but we haven’t said much about the workers’ compensation system itself. Where do the funds for workers’ compensation come from? What incentive do employers have to make their offices and work sites safer?
In Colorado, workers’ compensation is a system in which employers pay a premium to their insurance companies, which will cover workers’ compensation claims made by employees. As part of the insurance coverage, employers must pay a premium, part of which is dictated by loss costs.
Loss costs are found by taking the average medical costs and lost wages an employee will have during the course of his or her employment. Colorado insurers use the National Council on Compensation Insurance’s loss cost number when determining premiums, but then will add their own separate charges for Colorado employers.
Though loss costs are factored by looking at workers’ full career, these figures do not stay stagnant. Instead, as more employees are injuring themselves at work or are out of work longer, the loss costs rise. In addition, if employees need more medical care or more treatments during a period of medical leave because of a serious injury, loss costs can also rise.
Looking to 2013, the Colorado Division of Insurance has announced that loss costs are expected to rise by 5.2 percent, even though employers are claiming that they are improving on-the-job safety.
Following an accident, it is important to speak with a workers’ compensation attorney, as insurance adjusters value finishing a claim as quickly and cheaply as possible, not making sure that an injured employee is adequately compensated for the injuries he or she sustained.
Source: The Denver Post, “Colorado employers to pay more for workers’ comp in 2013,” Andy Vuong, Nov. 12, 2012