When employees are injured and unable to perform their job, they may be entitled to certain benefits. The type of benefits employees are entitled to receive depends on several factors, including where and how they were injured. Between worker’s compensation, disability insurance, and accident insurance, it can be confusing to know which policy is applicable to a situation.
Understanding the Basics
Worker’s compensation is a benefit that only applies to work-related injuries. This coverage is mandated by each state and may vary from state to state. There are many variables to workers’ compensation benefits, but generally, benefits are paid for either the length of the disability or as a lump sum payment. The coverage may generally be used to replace lost income due to the injury, medical benefits, and permanent disability benefits.
Supplemental Disability Insurance
A supplemental disability insurance policy, sometimes called a private policy, differs from worker’s compensation in that it can cover both work-related or non-work related personal medical conditions. These may include an injury that occurred on the job, but can also encompass illnesses and other injuries. Generally, the benefits are paid monthly for the duration of the illness or injury, and only cover a portion of lost wages.
Supplemental Accident Insurance
Supplemental accident insurance often provides indemnity benefits to pay when the insured receives treatment of eligible injuries. Unlike disability insurance or workers’ compensation, accident insurance benefits are based upon the type of treatment received. Accident insurance benefits typically help cover medical or other expenses resulting from the accident, but do not provide specific benefits for lost wages.
How can these policies work together?
If the Injury Occurred at a Workplace
Workers’ Compensation: If employees have been injured at their workplace, they may apply for workers’ compensation. Your state’s laws and your company policy will determine if they are eligible for payment.
Disability Insurance: Some policies may offer an option to receive supplemental disability benefits but offset these benefits with workers’ compensation benefits. However, in most cases, disability insurance benefits are not payable when workers’ compensation is awarded. If workers’ compensation is not awarded to employees, they may be able to receive disability insurance benefits.
Accident Insurance: If an accident insurance policy offers 24-hour coverage, benefits are generally paid for any eligible injury treatment, regardless of other medical coverage or other insurance benefits. One exception is if the accident policy is a non-occupational policy, which means employees can only claim benefits if they are injured off-the-job.
If the Injury Did Not Occur at a Workplace
Workers’ Compensation: If employees are not injured at their workplace, they will not be able to apply for workers’ compensation.
Disability Insurance: If employees are covered by a group disability policy or have purchased individual disability coverage, and are out of work due to a covered injury, benefits may be payable. Some policies may have an elimination period that must be satisfied before benefits are payable, as well as other limitations.
Accident Insurance: Because accident insurance provides benefits for treatment of accidental injuries regardless of other insurance or income, employees may also receive accident benefits as well. Disability and accident policies can work together, with disability insurance helping cover a portion of wages lost and accident insurance helping contribute to medical bills for injury treatment.
Prepare for the Unexpected
Accidents and disabilities can be frightening, and often devastating. Help your employees by offering supplemental products – like accident and disability insurance – and providing benefits education so they can learn how to prepare for whatever life may throw at them. Learn more at americanfidelity.com.