Worker’s compensation is a confusing system. Your employer must buy the insurance and manage the coverage, but it does so under the guidance of the state.
The Insurance Information Institute explains workers’ compensation is not a state program, but it is a state system.
State system, not program
The state can control various aspects of the workers’ compensation system. It has oversight over it, which allows the state to ensure the system runs smoothly.
It is the state that sets laws concerning workers’ compensation. For example, the law will say which employers must have workers’ compensation insurance. The law also will spell out rules, such as how much benefits for lost wages must be or what constitutes eligibility to receive workers’ compensation benefits.
Every state differs
Complicating the whole concept of workers’ compensation is that every state has different rules and systems in place. So, if you live in Kentucky but work in Tennessee, you would have to follow the Tennessee law when it comes to workers’ compensation coverage, which could be much different than that in Kentucky. This gets confusing when you start to talk to other people who may have had different experiences than you with the workers’ compensation system.
Essentially, the only part of the workers’ compensation system that is the responsibility of your employer is paying for the insurance. Your employer has little control beyond that except choosing from which company to buy insurance, but even that sometimes is something state law dictates.
You and your employer should consult the state about workers’ compensation questions because that is where you will get the best information.