Workers’ Comp vs Health Insurance: Essential Differences Explained

a business owner comparing workers' compensation insurance and health insurance
Mordechai Kamenetsky
Last Updated: 
February 14, 2024

Workers’ comp and health insurance serve distinct purposes in protecting employees. While workers' compensation covers work-related illnesses and injuries, health insurance covers general healthcare needs.

It’s important to note that while employers are legally required to provide workers' comp coverage, offering health insurance is not always mandatory.

What are Workers' Comp and Health Insurance?

What is Workers' Comp Insurance meant to cover?

Workers' comp, short for workers' compensation, is a type of insurance policy that provides coverage for employees who experience work-related injuries or illnesses. As a business owner, you are often required by law to provide workers' comp insurance for your employees. 

The main purpose of workers' comp is to cover medical expenses, lost wages, and disability benefits for employees who suffer injuries or become ill while on the job. 

Workers' comp insurance can include benefits such as:

Medical Expenses

Medical Expenses: Covers costs related to a work-related injury or illness 

Lost Wages

Lost Wages: Provides income replacement for employees who are unable to work due to their injury or illness

Disability Benefits

Disability Benefits: Offers financial assistance for employees who suffer long-term or permanent disabilities as a result of their injury

How does Health Insurance provide protection?

Health insurance, on the other hand, is a private coverage option that helps protect individuals and their families against the high cost of medical expenses for non-work-related injuries and illnesses. While health insurance is not mandated by law for employers, many businesses choose to offer it as part of their employee benefits package. 

Health insurance typically covers a wide range of medical costs, including:

Preventive Care

Preventive Care: Regular check-ups, screenings, and vaccinations to maintain good health

Hospital and Medical Expenses

Hospital and Medical Expenses: Costs for doctor visits, emergency room services, and hospital stays

Hospital and Medical Expenses

Prescription Medications: Helps cover the costs of necessary prescription drugs

In summary, workers' comp insurance is specifically designed to protect employees and employers in the event of a work-related injury or illness, whereas health insurance offers a broader scope of coverage for the overall well-being of employees and their dependents. 

How do they differ in coverage?

What costs are employers and employees facing?

For workers' comp, employers pay premiums that depend on their industry's risk level and their claims history. Thus, businesses in higher-risk industries typically face higher premiums. The employer is solely responsible for providing workers' comp coverage, and employees do not contribute to the cost.

As for health insurance, employees and employers often share the monthly premium costs. The exact amounts will depend on the specific insurance plan and the company's offerings. Usually, health insurance providers offer a choice of different plans, which can lead to varying premium costs for employees.

Frequently Asked Questions

Frequently Asked Questions

Can I choose to use my personal health insurance instead of Workers' Comp if injured on the job?

No, workers' comp is designed to cover work-related injuries, and you cannot opt to use your personal health insurance for those situations. Workers' compensation is legally required for businesses and ensures that employees receive proper medical care and financial assistance for injuries sustained at work. 

Most health insurance policies contain language that excludes coverage for workplace injuries and illnesses.

How does Workers' Compensation Coverage affect my personal Health Insurance Premiums?

Workers' compensation and health insurance are separate coverages with distinct purposes. Workers' comp covers work-related incidents, while personal health insurance caters to non-work-related health issues. These two types of insurance don't directly affect each other's premiums. 

However, a safer work environment and fewer workers' comp claims could potentially contribute to lower overall costs for a business, including health insurance expenses.

Who is responsible for paying my Health Insurance Premiums while I'm receiving Workers' Compensation Benefits?

In general, employees are still responsible for their portion of health insurance premiums while receiving workers' compensation benefits. However, specific regulations might vary depending on your state and employer, so it's crucial to review your benefits and discuss with your human resources department or insurance provider for a clear understanding of your responsibilities.

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Get Workers' Comp Insurance for your business!

Looking for workers' compensation insurance to protect your employees and your business? Get a quote today. By filling out the instant quote form on Kickstand’s website, you'll get a sense of how much the coverage will cost. 

Don't risk the financial and legal consequences of not having proper coverage – consult with the experts at Kickstand to get the workers' compensation insurance your business needs.

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Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.

Mordechai Kamenetsky

Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.

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