Insured Solutions
Insured Solutions

How are benefits handled when an employee dies and who receives those funds?

When an employee dies on the job or his/her death is connected to the job, your client must report the death within 8 hours. They are also required to notify the local OSHA office, which investigates the fatality.

Next of kin should be compassionately notified. Then a human resources representative needs to contact the family as soon as possible to discuss insurance and any other benefits. If grief counseling is available, HR should offer it to employees.

The amount of compensation from workers’ comp varies based on the circumstances. If an employee suffers a heart attack connected with an underlying medical condition, workers’ comp pays nothing. But if the employee has a heart attack at work and then hits her head and dies from the head injury, the death falls under workers’ comp.

Compensation varies by states and amounts differ by family situations. If a worker dies without a spouse or children, their estate may not receive any workers’ comp or may receive a minimum amount for burial expenses, i.e. $5,000. In California, though, even if a single employee dies, the state assesses a $350,000 expense on the WC carrier – a way to offset state insolvency funds from other claims.

But, if an employee has a spouse and 4 children under 18, workers’ comp may feel an obligation to replace the missing wages for the family, especially the children. However, most families litigate when their loved one dies to make sure that their children are cared for all the way through college.