Health insurance are not the same as workers compensation insurance. Even with health insurance, you are not covered for work-related injuries, and the simple reason is that as per the laws of most states, it is required for employers to have workers’ compensation insurance. Workers’ compensation insurance is borne by the employer and happens to be very different from health insurance even when they cover similar injuries.
While you get to decide the extent of coverage of your own health insurance, in workers’ comp insurance, the coverage and the premium are based on the risk of your job. For example, according to OSHA – construction accounted for approximately 20% (1,061) of worker fatalities in the private sector in the calendar year 2019, accounting for one in every five worker deaths for the year.” Because this work is considered risky, the premiums will be higher.
The Difference Between the Two
Often employers are confused between the two in cases where health insurance is also provided by the employer. A clear indicator is health insurance can be partly paid by the employee (either as a payment or as a deduction). At the same time, worker’s compensation is entirely an employer’s responsibility, and many states have “no dipping” laws to safeguard this fund too. While health insurance will pay for the cost of treating injury or illness, worker’s compensation insurance also covers a portion of wages lost. In cases of death, this fund is not forfeited but rather paid to their closest kin.
How does Workers Compensation Insurance benefit an employer?
As mentioned here, workers’ comp doesn’t only protect the employees against injuries but also employers from lawsuits. It saves the employer’s cost by ensuring safe and efficient recovery of the employee, and in many states, employers decide the healthcare practitioners are looking after the employees. This is to ensure that the time taken for recovery is minimized while the care coverage can be customized too. In choosing your insurance provider, employers must pay attention to the long-term cost. The cheapest plan may not ensure an employee’s quick return, which only drags the cost. Sometimes, even when you include extra coverage in your insurance, the paperwork might cause significant delays. It is the onus of the employer to choose a plan that ensures the quick return of the employees.
While this does sound like a lot of responsibility, in many cases, employers aren’t liable to compensate for a work-related injury, for example, when an employee is committing a crime, is injured due to intoxication, self-inflicted an injury, pre-existing conditions, etc. To explore your options as an employer, you can get in touch with a reputable insurance company. They will help you understand all the various types of insurance schemes that best suit your business and employee needs.
Generally, workers comp is one of the most commonly inquired topics as a Human Resource magazine reports. For an employee, it is essential to know if they’ll be supported during a difficult time, how soon they will have to return, and to what extent they will be compensated. It falls on the employer and the employee to clarify this from the beginning.
In addition, most states have mandated workers compensation, ensuring that even businesses do not face financial hardship in the sudden event of an employee injury. Businesses also require a lot of assistance in order to make the right decisions at the right time. The kind of coverage, working environment, payroll, etc., will determine your premium. So, like every other business decision, this one requires thorough research and analysis, and it doesn’t end there. Once you’ve shortlisted a few, you’ll have to get a quote, read the legal documents, and then finalize the one that fits your business needs. And it may sound exhausting, but it’s better to be prepared.