Even with strong safety programs, workplace injuries can still occur. When they do, understanding the type of workers’ compensation claim that follows is critical for managing costs and keeping your organization running smoothly. Two of the most common claim types are Indemnity claims and Medical-Only claims. While both provide benefits to injured workers, the financial and operational impact on employers is very different.
What is a Medical-Only Claim?
A medical-only claim occurs when an injured employee requires medical treatment but does not miss time from work. Examples might include:
• An employee who receives stitches but is able to return to light duty
• A worker prescribed medication or therapy but continuing to perform modified tasks
• Any case where treatment is provided, but no wages are paid because the employee is not fully out of work
Medical-only claims are generally less expensive and have a smaller impact on an employer’s experience modification factor (mod). When managed properly, they are less disruptive to operations and can often be resolved quickly.
What is an Indemnity Claim?
Indemnity claims arise when an injury prevents the employee from working and wage replacement benefits must be paid. These are sometimes referred to as “lost wage” claims. Examples include:
• A back injury that requires an extended period away from work
• A surgery that leads to weeks of recovery before the employee can return
• Any injury where the worker cannot be accommodated with light or modified duty
Indemnity claims are significantly more expensive than medical-only claims, because in addition to medical costs, they include wage loss payments. They also have a greater impact on the mod, which can directly increase future insurance premiums.
Preventing Medical-Only Claims from Escalating to Indemnity
Many claims begin as medical-only but can easily turn into indemnity if not handled correctly. Employers can reduce this risk by:
• Having a return-to-work program – Offering light or modified duty keeps employees engaged and reduces the chance they will remain out of work.
• Directing employees to approved medical providers – Physicians who understand workplace accommodations are more likely to recommend restricted duty instead of complete time off.
• Maintaining consistent communication – Staying in touch with the injured worker shows support, reduces the risk of disengagement, and keeps the claim from escalating unnecessarily.
Both medical-only and indemnity claims provide necessary support for injured workers, but the financial impact on an organization is very different. The more indemnity claims an employer has, the higher their workers’ compensation costs and mod factor will climb. Proactive claims management and strong return-to-work programs are the best ways to keep medical-only claims from turning into costly indemnity claims.
Members of Hearten Workers’ Compensation benefit from working directly with industry experts to proactively manage claims. That means employees get back to work faster, premium rates stay stable, and organizations run more efficiently. Hearten members also gain access to a network of peer organizations, providing valuable insights into best practices for managing and preventing claims unique to human and social services.
