If you find out that your employer is insolvent or going bankrupt in the course of your workers’ compensation case, you still have options. Here is what you need to know.
Usually the Employer Is Not Paying for Your Benefits
During many Minnesota workers’ compensation cases, the employers are not paying the benefits to injured workers. They have workers’ compensation insurance, and the insurance company is the one actually paying the money. If that is true in your case, then you may continue receiving benefits uninterrupted.
If the employer does not have insurance, it may be self-insured. Self-insurance requires a high showing of financial stability and cash reserves by the employer to the state. These requirements are in place to avoid a situation when a self-insured employer goes bankrupt or becomes insolvent and cannot pay for workers’ comp.
Finally, some companies do not follow the law and never obtain required insurance. Injured workers may receive their benefits payments directly from the company, if ordered by the court, or from the state of Minnesota’s special fund.
When Bankruptcy or Insolvency Affects a Workers’ Comp Claim
Although your employer generally is not the one paying benefits to you, its bankruptcy or insolvency may affect your benefits in some cases. For example, if your employer stops paying premiums on its workers’ compensation insurance policy, the insurance company may discontinue coverage. In that case, your employer is probably obligated to continue your benefits payments – but it may be in the process of declaring bankruptcy. You may become a creditor in line with all the other creditors for payment. The same is true if your employer is self-insured or uninsured.
The State of Minnesota does have a special fund available to pay workers’ compensation benefits for workers whose employers will not or cannot pay. You may apply to the fund for payment. Then, a judge must find that the employer is liable to pay you workers’ compensation benefits. If this happens, you could receive all your benefits even though your employer is bankrupt or insolvent.
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.