Basics of the Workers Compensation System

Basics of the Workers Compensation System - A Primer


Today, we'll delve into the fundamental principles of the workers' compensation system. This primer aims to provide a basic understanding that will prove useful as you navigate through your workers' compensation claim. We will cover the importance of immediate injury notification, the active and permanent phases of a workers' compensation claim, and the critical recommendations made by doctors during the process.

Overview of Discussion

Let's begin with a brief overview of the topics we'll cover today:

  1. Importance of Prompt Injury Notification
  2. The Active Phase of a Workers' Compensation Claim
  3. The Permanent Phase of a Workers' Compensation Claim
  4. Doctor's Recommendations and Their Impact

The Notification Door

Before delving into benefits and obligations within the workers' compensation system, it's crucial to address the initial step – notifying your employer of your injury. This is a legal obligation, and failure to do so promptly may lead to claim denial.

A visual aid: A diagram illustrating the active and permanent phases, with emphasis on the notification door.

Tips for Notification:

  • Notify your employer immediately after an injury.
  • Ensure you can prove the notification (e.g., written report, witness).
  • Inform treating doctors and medical staff about the work-related nature of the injury.

Active Phase vs. Permanent Phase

The workers' compensation system comprises two phases – the active phase and the permanent phase.

Active Phase:

  • Doctors actively work to improve your medical condition.
  • Entitlement to medical care related to the work injury.
  • Compensation at 66% of the average monthly wage prior to the injury.
  • Litigation may occur over issues like recommended treatments or compensation disputes.

Permanent Phase:

  • Begins after reaching Maximum Medical Improvement (MMI).
  • Doctor's three recommendations: Supportive Care, Impairment Rating, and Compensation.

Supportive Care:

  • Ongoing medical treatment to monitor rather than cure.
  • Agreement to the adequacy of supportive care is essential within 90 days.

Impairment Rating:

  • Determined based on the American Medical Association (AMA) guidelines.
  • Essential to understand and potentially dispute if deemed inadequate.


  • Varied based on the type of injury (scheduled vs. unscheduled).
  • Scheduled injuries involve limbs and have a fixed compensation period.
  • Unscheduled injuries require a loss of earning capacity analysis for lifelong compensation.

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