Does The Worker’s Compensation Pay For My Health Insurance?

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Many individuals wonder if the workers’ compensation insurance of their employers could pay for their health insurance. Well, the exact answer is NO! Your employer may be responsible for all reasonable medical expenses for your injury that you incur during the working operations. However, this doesn’t mean that your employer may need to take charge of buying you or your family members, health insurance. The benefits of the worker’s compensation and health insurance that is considerately given to you by your employers — are two different things.

Does the Worker’s Compensation Pay For My Health Insurance?

While worker’s compensation is mandated for all the employers in California and has to pay its required premium rate — health insurance is not. However, some employers also purchase group insurance health plans where they can cover their employees. Usually, the mode of payment for this group insurance is on a percentage basis, on where the 70% comes from the company. At the same time, the other half is deducted to the employee’s salary on a tax-free basis. 

What Is The Difference Between Worker’s Compensation And Health Insurance?

Most individuals and small business owners know the difference between workers’ compensation and health insurance — however, some don’t. So to recap both coverages, worker’s compensation is a type of insurance that could protect the employer against liability from its employees — while they incur a work-related injury. On the other hand, health insurance is a type of insurance that can cover the full or partial payment for the medical expenses of the insured. 

Difference Between Workers Compensation And Health Insurance

Workers Compensation

Workers’ compensation is a type of insurance that is mandatory for all business owners. This type of insurance provides a wage replacement and medical benefits to the insured’s employees — in case the employee, incur an accident or injury during the course of employment. Additionally, this insurance is also designed to protect the employer since the employees have to give up their rights on suing their employers — in exchange for workers’ compensation benefits. This trade-off between the employees and employers is also known as “the compensation bargain.” Generally, workers’ compensation cannot cover pain and suffering and punitive damages. Moreover, negligence on the part of the employee is also not applicable to coverage. 

Benefits Of Workers Compensation

Workers’ compensation insurance could provide four types of benefits to the employees — including survivors’ benefits, income replacement, medical expenses, and costs for rehabilitation. However, coverage would only be applicable if the injury of the employee — arises out of employment. In contrast, in the operations of work, and the disease that the employee incurs is an occupational disease. 

Survivors Benefits

In any event, the employee suffers a work-related death. Workers compensation could provide an income benefit to the surviving beneficiaries of the employee — including its surviving spouse and its dependents, or the employee’s children under the age of 19. In thirty jurisdictions, the spouse and its dependents need to receive at least 75% of the deceased worker’s average weekly salary. However, in some jurisdictions, it is implemented that the worker’s compensation needs to provide an additional percentage of benefits if the deceased worker has one child only. 

Besides, the burial fee will also be paid to the surviving dependents of the insured. If there is no dependent existence, the burial fee will be given to the individual who pays for the cost of burial. 

Modes Of Payment For Survivors Benefits

Payments for surviving benefits do not apply to individuals who are not financially dependent on the deceased worker. Also, if the deceased employer has no one who is financially reliant on him — the employer is not liable for any payments even though the deceased worker has surviving relatives and is financially independent.

Survivor’s Benefits Payments for the surviving spouse is until its death or until the spouse’s remarriage. On the other hand, its surviving dependent children will be receiving the compensation until they reach the age of 18 or 22; it depends if the children are a full-time student. However, if the dependent of the deceased worker is his parents — they will only receive benefits for a maximum of 312 weeks.

Calculation Of Death Benefits
Average Weekly Salary Of The Deceased Employee$500
Survivors Benefit (75% of the weekly salary)$375

 Medical 

Workers’ compensation could provide unlimited medical care benefits for the work-related accidental injuries of the employee. However, medical expenses that result from occupational diseases can be paid up to a specific time only —or can be covered in full. Unlike health insurance, worker’s compensation does not have a deductible rate and coinsurance before the insurance kicks in. Also, workers’ compensation does not impose incentives for the injured employee to demand and control the medical services they want to receive. 

In case the doctor decides for surgery or other procedures — the decision will be reviewed first and will require preapproval from the insurer. 

Income Replacement

Workers’ compensation can provide an injured employee a weekly income replacement — while the employee is disabled due to covered causes of injury or disease. The duration of income replacement payments will depend on the factors below:

  • Employee’s compensation benefits
  • State’s maximum duration of benefits
  • Adjustments to cost-of-living
  • Waiting period
  •  The severity of the employee’s disability whether it is a temporary, partial or permanent disability. 

Length and Degree Of The Disability

Disability can be permanent or temporary — total permanent disability (TPD) is a condition of an individual, which means that he is no longer able to work again due to work-related injuries. Total permanent disability may involve an individual’s loss of use of the limbs.

While temporary disability is a type of injury that is due to an accident that can be resolved over time.

Duration Of The Possible Benefits

There are no limitations in terms of giving benefits to employees who incur a temporary total disability. However, some jurisdiction only allows up to a maximum of 500 weeks on providing benefits. Additionally, if the employee suffers a permanent total disability due to work-related injuries — the duration of the benefits will be until the employee’s lifetime.

Rehabilitation

Many employees who incur an injury concerning their working operations, usually recover from their disabilities. However, some of them may no be able to resume their duties or what they are doing prior to their accidents. So the possible benefits for them are a rehabilitation benefit. Rehabilitation benefits involve the following:

  • Vocational training, so the employee could perform a new occupational function based on his/her current state. 
  • Medical and Physical therapy, this could be a big help to rehabilitate that employee as close as possible to their prior lifestyle — before the accident occurs.
  • Psychological therapy, to provide support and help to employees who are depressed due to what has happened to them. This therapy could help them to be able to perform a useful function again confidently.

Health Insurance

Health insurance is a type of insurance that could pay the partial or full part of the person’s sustaining medical expenses. Simple to say — it allows the insured individual to transfer their risk to the insurer. For further illustration, all individuals are at risk of getting an illness or a severe injury that needs surgery, also a chronic disease that requires an ongoing treatment — for example, diabetes, cancer, and leukemia. Health insurance could help pay for your unaffordable medical bills. 

Advantages Of Having Health Insurance

Coverage For Possible Medical Expenses

Health insurance plans could help the insured pay for its recurring medical expenses — including hospitalization expenses and charges from the service of an ambulance.

Coverage For Critical Illnesses

Most insurance providers offer coverage for critical illness, on either an add ons to their current health insurance plan — or as a standalone plan. This insurance policy could cover the insured against life-threatening diseases — including bone marrow transplant, stroke, kidney failure, and other more life-threatening illnesses. 

Tax Deductions

The insured who pays for health care plans are usually eligible for tax deductions. Under the Income Tax Act, 1961, Section 80D, if the insured is under 60 years of age, the insured may claim up to 25,000 tax benefits with their Health insurance premium. Additionally, if your parents are senior, the insured may claim up to 30,000 tax benefits. 

Workers Compensation vs. Health Insurance

Due to the existence of workers’ compensation, almost all private health insurance providers refuse to pay for the treatment of an individual — if work-related accidents cause the injury. Additionally, many healthcare insurance providers exclude coverage for an individual’s medical expenses, which are needed to provide by Federal workers compensation.

Also, some health insurance providers generally exclude coverage for individuals who incur an occupational disease or injury that can be covered by worker’s compensation. Regardless, of whether the individual could receive a workers’ compensation benefits or not. 

Workers Compensation vs. Health Insurance

Health InsuranceWorkers Compensation
BenefitsCovers the employees’ personal medical expenses. In any case, the disease or the injury of the insured are not due to work-related accidents Covers the medical expenses for the employee’s injuries that are due to work-related accidents.

 Cost for the employee’s       Rehabilitation

 Income Replacement 

 Survivors Benefits in case the employee incurs death. (due to work-related injuries)

Payments for the insuranceThe employer can pay 70% of the premium and the employee will pay the difference. Employers pay for the whole amount of the premium. 
RegulationsSmall businesses that have an employee that are less than 50 workers are not required to purchase Health insurance.

Additionally, if the company has a group health insurance plan, it must be served to every employee. 

In the states of California, all business owners must have workers’ compensation.
Where to get the insurancesThrough Healthcare gov. Private Insurers, private companies, and marketplaces. Through Private Insurers, private companies and marketplaces. 

FAQ Of Employees

What If My Employer And The Insurance Provider Say That My Injury Is Not Work-Related?
  1. Sometimes there are disputes on giving workers compensation benefits. Often insurance companies do not cover specific injuries such as; Back injury due to the worker’s having arthritis,
  2. Injuries to the neck or cervical spine
  3. Shoulder injury
  4. Traumatic brain injury
  5. Psychiatric injury
  6. Repetitive injuries
  7. Environmental injuries
  8. Damages that incur from traveling to work

Take Note: Sometimes, insurance companies provide coverage for this type of injury. However, the employee will have to prove the injury to the court. 

Here at Business Insurance Los Angeles, we could help you find an affordable worker’s compensation insurance. Also, health insurance with comprehensive coverage. Get a free quote here. 

 

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