What Pennsylvania employers need to know about workers' compensation insurance

What does workers’ compensation generally cover in Pennsylvania?

Employees in Pennsylvania who experience a work-related injury or illness are eligible for the following workers’ compensation benefits:

• Wage Replacement for Lost Time. Employees can receive up to two-thirds of their regular salary, up to the legal maximum, for time missed from work due to a work-related disability.
• Medical Care. Employees are entitled to reasonable medical and surgical services related to a work-related injury or illness. This includes reimbursement for healthcare costs based on the fee schedule rate, even if no time was lost from work.
• Total Disability Benefits. These benefits are available to employees who cannot return to work due to severe work-related injuries or illnesses, such as the loss of a limb or eyesight.
• Partial Disability Benefits. Employees who are not fully disabled and can return to work, possibly in a restricted capacity due to a work-related injury or illness, may qualify for partial disability benefits.
• Death Benefits. Surviving dependents are eligible for benefits if a work-related incident results in the employee’s death.
• Specific Loss Award. Employees can receive this award if they incur a permanent disability affecting specific body parts or functions such as a finger, hand, arm, leg, foot, toe, sight, hearing, or other body part or function.

Obtaining workers’ compensation coverage in Pennsylvania

Employers in Pennsylvania can obtain workers compensation in one of four ways:

• Buy the policy through a licensed insurance agent or broker in the state.
• Purchase workers’ comp directly through a private insurance company. Pennsylvania has over 300 private insurers who are approved to write workers’ comp policies in the state.
• Self-insure your business if it qualifies. In Pennsylvania, large, financially stable employers operating for three or more years can seek approval from the BWC to self-insure, either individually or as a group.
• Consider applying for workers’ comp coverage through the State Workers’ Insurance Fund (SWIF) if you’re a new employer struggling to secure coverage due to a lack of experience. The SWIF program is required to provide coverage to virtually all businesses that apply, serving as a reliable option for those finding it difficult to obtain coverage from private insurers.

For more insurance information, review the consumer guide on the Pennsylvania Insurance Department website.

What are the penalties if a Pennsylvania employer breaks workers’ compensation laws?

Workers’ compensation insurance is a legal requirement in Pennsylvania. Consequently, covered employers who fail to comply with the applicable workers’ compensation laws may face penalties.

Below are some less-than-desirable outcomes that uninsured employers could face if an employee incurs a compensable work-related injury.

• The employer is liable for reimbursing the state’s Uninsured Employers Guaranty Fund for any compensation paid out to the employee.
• Reimbursements from the state fund include the benefit amount paid, along with accumulated interest, fees under section 440 of the PWCA, and attorney fees.
• The employer may be charged with a misdemeanor. A conviction could result in a fine of up to $2,500 and up to one year in prison. Each day the employer lacks workers’ compensation insurance is considered a separate violation.
• In cases of intentional violations, the employer may face felony charges, potentially leading to a $15,000 fine and up to seven years in prison. Each day the employer intentionally goes without workers’ comp insurance counts as a separate violation.
• Failing to respond to the BWC’s inquiries regarding workers’ comp coverage can result in a fine of $200 per day, lasting for up to 30 days.

Additionally, the injured employee can file a lawsuit against their uninsured employer. 

In this case, the employer may be responsible for the following damages, among other potential liabilities:

• Cost of medical treatment
• Lost wages and benefits
• Reduced earning potential
• Long-term nursing care
• Permanent disabilities
• Scarring and disfigurement
• Pain and suffering (physical and emotional)
• Out-of-pocket expenses
• Decreased quality of life

What happens if an employee experiences a workplace incident?

When a work-related injury occurs, both the employee and the employer have specific responsibilities.

Here is an overview of the key steps in Pennsylvania’s workers’ compensation claims process:

• The employee must report the work-related injury to their employer within 21 days. Failure to report the injury within 120 days of its occurrence typically means the employee is not entitled to any compensation.
• The employee has the right to seek medical care for their injury. If the employer has a list of designated healthcare providers, the employee must choose a provider from this list for their initial 90 days of care following the injury. However, the employer cannot dictate which specific provider the employee should choose from the list.
• The employer is required to report the injury to their insurance company immediately. Self-insured employers should report the incident to the individual or entity managing their workers’ compensation program.
• The employer must file an injury report with the BWC within 48 hours if the injury results in death, and within seven days if it leads to a disability lasting longer than a day or work shift.
• Following the employee’s notification of the injury, the insurer has 21 days to either deny or accept liability. They must notify the employee of their decision accordingly. In the case of accepting liability, a compensation agreement must be issued to the injured employee.

Additional steps in the process include issuing the employee a Statement of Wages and, eventually, a Final Receipt when benefits terminate.

Other things to know: 

• If the employee is denied benefits, they have a three-year window from the date of the injury to file an appeal. This process involves litigation, allowing the employee to hire an attorney for representation.
• As mentioned, if an employee sustains an injury while the business is uninsured, the state’s SWIF fund steps in to cover the workers’ comp benefits. The employer must reimburse the state for these costs later.
• The employer will have an opportunity to voice any concerns they have about the claim, such as suspicions of fraud or filing an appeal.

More resources for Pennsylvania employers

• Pennsylvania Workers’ Compensation Services
• State Workers’ Insurance Fund (SWIF)
• PA Workers’ Compensation Employer Information
• Workers’ Compensation & the Injured Worker
• The Flow of a Pennsylvania Workers’ Compensation Claim
• Workers’ Compensation Coverage and Benefits
• Workers’ Compensation Appeal Board Overview

For more information on workers’ compensation in Pennsylvania, you can contact the BWC’s  office in the following ways:

• Get help by phone: 800-482-2383 (toll-free) or 717-772-4447
• Or reach them by email: ra-li-bwc-Helpline@pa.gov