Workers’ Compensation vs. Employee Health Insurance: A Business Guide
One of our primary goals is to ensure our partners understand the nuances of their coverage. With expertise across several fields, we’ve curated specialized business insurance to industries nationwide seeking tailored solutions.
Here we provide insights into workers’ compensation and employee health insurance to contextualize their benefits.
INCREASE IN WORKPLACE INCIDENTS HIGHLIGHTS NEED FOR INSURANCE COVERAGE
The U.S. Bureau of Labor Statistics (BLS) reported that fatal work injuries increased by 5.7% in 2022. In another study, the BLS also documented 2.8 million nonfatal workplace injuries and illnesses during the same year. Consequently, the rise in workplace injuries now results in employers spending an average of $75,000 on legal fees to settle employment claims pre-trial.
This is where specialized insurance comes in.
WORKERS’ COMP VS. HEALTH INSURANCE: KNOW THE DIFFERENCE
Workers’ compensation covers work-related injuries and illnesses, including medical expenses and lost wages, and is usually required by law. Employee health insurance offers broader healthcare coverage for general medical needs, regardless of work-relatedness, and is typically an employer-provided benefit. The key difference is that workers’ compensation is specific to job-related incidents, while health insurance for employees covers overall health.
HOW WORKERS’ COMPENSATION WORKS
Employers must prioritize protecting the well-being of team members on the job. This requires insurance that covers unforeseen work-related injuries and illnesses, even when every possible safety measure is in place. Workers’ compensation addresses that need by providing a few fundamental solutions that may protect businesses of any size, including:
A FINANCIAL SAFEGUARD AND CARE FOR EMPLOYEES
Workers’ compensation provides employees with any necessary medical care and compensation during their recovery period. This allows an injured team member to stay focused on healing without the added stress of medical bills or lost wages, including rehabilitation costs.
LEGAL PROTECTION FOR EMPLOYERS
This coverage may also reduce or eliminate significant legal expenses should a lawsuit surface from a workplace injury or death.
SUPPORT FOR FAMILIES
Workers’ comp can also provide death benefits to the deceased worker’s dependents where qualified. This crucial support helps families navigate challenging times.
WHAT DOES WORKERS’ COMPENSATION INSURANCE COVER?
It’s best to err on the side of caution and assume any injury or illness an employee experiences onsite or offsite while performing work on your behalf qualifies. Common claims we see involve:
- Cuts and lacerations
- Fractures
- Eye injuries
- Burns
- Physical trauma
Still, every workers’ compensation policy we develop for our partners is individualized to their company’s needs. In this case, an insurance company pays the benefits whether the employee is at fault or not, with coverage generally including:
- Medical care
- Lost wages
- Disability benefits
- Ongoing care and rehab
- Death benefits
Keep in mind that injuries involving fraud, self-harm, or damages where an employee is under the influence of drugs or alcohol are not covered.
IS WORKERS’ COMPENSATION REQUIRED?
Every state but Texas requires a business to have workers’ compensation insurance. Some states provide exemptions for specific workers.
Given the nuances around state requirements, it’s best to partner with an insurance team specialized in workers’ comp that also has expertise in your industry.
HOW DO I OBTAIN WORKERS’ COMPENSATION INSURANCE?
You can purchase workers’ compensation insurance through your payroll company, but it’s often more expensive and typically lacks the same level of expertise.
We recommend obtaining this type of insurance from a broker with expertise in risk control, safety, and workplace claims. We invite you to contact us to have our business insurance team coordinate the details on your behalf.
HOW EMPLOYEE BENEFITS INSURANCE WORKS
As a business owner, you’ll partner with an insurance carrier or broker to secure coverage for your team. This process involves paying premiums that safeguard your eligible employees and their dependents. These plans often have defined rules, including:
- Types of benefits
- Deductibles
- Copayments
- Coverage limits
- Other curated needs
WHAT DOES EMPLOYEE HEALTH INSURANCE COVER?
Employee health insurance covers injuries and illnesses that happen beyond your business or when performing non-work related activities. In this case, your organization is not liable for these claims. Coverage includes:
- Doctor visits
- Hospitalization
- Prescription drugs
- Preventive care
- Surgeries
- Emergency services
DO I NEED TO OFFER HEALTH INSURANCE TO EMPLOYEES?
It depends on your state’s requirements and the size of your organization. Nevertheless, providing health-related benefits is paramount to attracting and retaining top talent.
HOW DO I ARRANGE HEALTH INSURANCE FOR MY EMPLOYEES?
While you can purchase employee health insurance through various online marketplaces, doing so doesn’t always yield the best results. Therefore, it’s vital to work with a knowledgeable insurance team who can:
- Help you navigate the complex landscape of health insurance options
- Tailor a plan to your company’s unique requirements and budget
- Provide ongoing support for claims and policy management
- Offer insights into industry trends and cost-saving strategies
NEED INSURANCE FOR YOUR BUSINESS?
We’re here to save you time and money and provide peace of mind by ensuring that your business is properly insured. With expertise in a wealth of industries, we can curate coverage tailored to your needs and budget.
Contact us today or schedule a consultation to discover how working with JD Fulwiler & Company Insurance can expand your insurance portfolio with the right solutions.
