In Minnesota, all employers must purchase workers’ compensation insurance or become self-insured. Injured workers should determine whether their employers are self-insured, because these workers may face different obstacles in getting the benefits to which they are entitled.
Self-Insured Means No Third Party Insurance Company
Self-insured employers do not use a third party insurance company to provide coverage for workers’ compensation claims. Instead, they get approval from the state of Minnesota to insure themselves against worker injuries. They pay for claims directly out of company money.
For injured workers, a self-insured employer could be a blessing or a curse. These employers may not have any experience handling the claims of injured workers, may not be prepared to process and pay for medical bills, and may not be familiar with the laws on wage loss benefits. The unfamiliarity could benefit employees by leading to fewer disputes, or it could hurt employees who are also unfamiliar with the system.
In addition, self-insured employers have a conflict of interest when administering workers’ compensation claims. They have to help injured employees by paying medical bills and wage loss benefits, but they need to keep costs low. Higher workers’ compensation costs directly affect companies’ cash flow and income, hurting their bottom line. As a result, companies have an incentive to deny coverage and benefits, even more so than insurance companies.
Self-Insured Means the Employer Has Some Financial Security
Employers cannot argue that their self-insured status means they cannot afford to pay benefits to injured workers. For one, to be self-insured the employer must show the state that it meets certain financial requirements by submitting financial statements, evidence of net worth, a large money deposit for a bond, and more. As a result, self-insured employers tend to be larger companies.
For employees, these strict financial requirements mean that self-insured employers will be able to pay out workers’ compensation claims, even if they initially deny benefits to keep the money in their pockets. Instead of going through an insurance representative, a self-insured company should designate employees or a Workers’ Compensation Service Company as the representatives. Injured employees should inquire about how to contact these people to submit medical bills.
Due to the inherent conflict of interest self-insured employers have in administering workers’ compensation claims for their employees, injured workers may have some concerns about receiving appropriate benefits. If you find out your employer is self-insured, seek legal advice from a Minnesota workers’ compensation attorney.
Need help getting workers’ compensation for your injury? Joe Osterbauer, Esq. and the Osterbauer Law Firm stand up for injured Minnesota workers’ rights. Joe’s 27 years of workers’ compensation experience and his team’s speedy service combine to get clients the results they need. To schedule a free consultation, visit Osterbauer Law Firm online or call Joe’s office at (612) 334-3434.