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Uninsured Employers Guaranty Fund

  • Dave Brown, Esquire
  • 01/13/2020

Can you receive workers’ compensation benefits in Pennsylvania if your employer does not have workers’ comp insurance?

Most employers in Pennsylvania, especially large employers, carry workers’ compensation insurance. So, if you get injured at work and are unable to do your job as a result of that injury, and you submit a claim to your employer, they will notify their workers’ comp. carrier. Shortly thereafter, the insurance company should start paying you money for your lost wages, as well as your medical bills, allowing you to relax and focus on what matters most, recovering from your injury as soon as possible and moving on with your life. Beyond the legal mandate to carry the workers compensation insurance, that is why it exists. Accidents and injuries happen. Workers compensation insurance is there so that even when they do employers can still focus on delivering their products and services, and hurt employees can focus on getting better.

But what if you hurt yourself at work, notify your employer, and learn that they do not have workers’ comp insurance and, therefore, can’t pay you what you deserve? While Pennsylvania law requires employers to maintain workers’ comp insurance for their employers — and can criminally charge those who don’t — some employers, particularly small employers, fail to carry PA workers’ comp insurance.

What happens in this situation? Paying lost wages and medical bills is very expensive, especially for small companies who struggle month after month. Are you out of luck and unable to collect wages while being required to pay your own medical bills because your employer doesn’t have insurance? Fortunately, you have recourse because Pennsylvania has a fund called the Uninsured Employers Guaranty Fund — called the UEGF for short. And, in the event your employer does not have workers’ comp. insurance, you will need to file a claim against the UEGF.

Your case will be heard by a workers’ compensation judge. Your employer likely will not have a lawyer because if they didn’t have the money to purchase workers’ comp. insurance, they probably won’t have the means to hire a lawyer. The UEGF, however, will be assigned a lawyer by the state to defend your claim.
If the judge rules in your favor and awards you workers’ comp. benefits, do not expect to get paid quickly. If your employer has workers’ comp insurance — through Liberty Mutual, PMA, Hartford, or another company — you will be paid the past benefits you are owed within 30 days of the judge’s decision (unless an appeal of the judge’s decision is filed by the defense attorney). But if the UEGF is involved in your case because your employer is uninsured, the judge will find that your employer is primarily liable and the UEGF is secondarily liable. In other words, your employer will have 30 days to pay the money that you’re owed and if they don’t (which they almost certainly will not), then the UEGF has to step in and make payment. The problem is, because the UEGF is funded by the state, they have limited financial resources, and it may take them several months before they have the funds to pay you. While an insurance company can be penalized if they don’t pay you on a timely basis (they don’t pay you within 30 days of the judge’s decision), the UEGF cannot be penalized for untimely payments. And while an insurance company is required to pay 10 percent interest annually on back benefits, the UEGF does not have to pay interest. The law relieves the UEGF of the obligation to pay penalties and interest because, unlike insurance companies, they have limited finances.

If the judge does not rule in your favor, you have the option to file an appeal, giving you the chance to be awarded benefits the second time around.

Whether or not your employer has workers’ compensation insurance, you do not want to handle your claim by yourself. You need a workers’ comp lawyer to represent you and navigate you through the complicated process established by the PA Workers’ Compensation Act over 100 years ago. You need the workers’ compensation attorneys at Pearson Koutcher Law — one of our experienced, knowledgeable lawyers will fight for you and obtain for you the benefits that you deserve. Workers’ Comp. It’s all we do. We are here to help you through a difficult time as quickly and easily as possible.