If you’ve been injured at work and are receiving workers’ compensation benefits, you may have many questions about how your health insurance fits into the picture. One of the most common concerns is: Who pays for my health insurance while I’m on workers’ compensation?
It’s a reasonable question. You’re probably used to your employer paying for part of your health insurance premiums, but now that you’re injured and not working, what happens?
In this article, we’ll break down everything you need to know about how health insurance works when you’re on workers’ compensation. We’ll cover the responsibilities of your employer, what happens with your health insurance premiums, and how it all affects your medical care.
What Is Workers’ Compensation Insurance?
First, let’s quickly review what workers’ compensation is and how it works. Workers’ compensation is a type of insurance that provides benefits to employees who get injured or sick as a result of their work. The coverage can include:
Medical care and treatment for injuries or illnesses caused by the job
Reimbursement for lost wages due to the inability to work
Disability benefits if the injury results in long-term impairment
Death benefits to dependents in case of fatal accidents
The key thing to remember here is that workers’ compensation is designed to help workers recover from work-related injuries or illnesses without needing to sue their employers. It’s a “no-fault” system, meaning it doesn’t matter who caused the injury—workers’ compensation will typically cover the expenses.
What Happens to Health Insurance While You Are on Workers’ Comp?
Now, let’s get to the main point of this article: What happens to your health insurance when you are receiving workers’ compensation benefits? Specifically, who pays for your premiums and how is your health insurance affected during your recovery?
Here’s the breakdown:
1. Employer-Sponsored Health Insurance
If you have health insurance through your employer, your employer is typically required to continue paying your health insurance premiums while you are on workers’ compensation. Here’s why:
Continuation of Benefits: In most cases, your employer must continue to provide you with the same health insurance benefits as if you were working. This means that even though you’re not actively working, your health coverage will remain in place.
Premium Payments: The employer is responsible for paying the health insurance premiums, but you may still be required to pay your portion of the premium. For example, if you normally pay a share of your health insurance premium through payroll deductions, your employer will likely continue to deduct that amount from your workers’ compensation benefits.
State Laws: The rules for maintaining employer-sponsored health insurance while on workers’ comp can vary by state. Some states have laws that require employers to continue offering health insurance benefits, while others may allow you to keep your coverage under certain conditions.
2. Can You Lose Your Health Insurance While on Workers’ Comp?
While your employer is required to continue your health insurance coverage in many cases, it is still possible to lose your health insurance if certain things happen, such as:
You Exhaust Your Workers’ Compensation Benefits: If you are unable to return to work and your workers’ compensation benefits run out, your employer may stop paying for your health insurance premiums. At this point, you may be able to continue your coverage through the employer’s health plan under COBRA (more on that in a moment).
Your Employment Status Changes: If you are terminated or laid off while on workers’ comp, your employer may no longer be obligated to provide health insurance. However, you may still be eligible for continued coverage under COBRA.
Financial Hardship: If your workers’ compensation benefits are not enough to cover your health insurance premiums, and you can’t afford to pay your portion, you may risk losing your coverage. However, employers usually offer assistance or work with employees in these situations.
What Is COBRA and How Does It Relate to Workers’ Comp?
COBRA (Consolidated Omnibus Budget Reconciliation Act) is a federal law that allows employees to continue their health insurance coverage under their employer’s plan for a limited period after certain qualifying events, such as termination, reduction in hours, or a leave of absence.
If you lose your health insurance because your workers’ compensation benefits end or your employment status changes, you may be eligible for COBRA continuation coverage.
How COBRA Works with Workers’ Compensation:
Eligibility: If your workers’ compensation benefits end or your employment is terminated, you can elect to continue your health insurance coverage under COBRA.
Duration: You can continue coverage for up to 18 months under COBRA, but you will be responsible for paying the full premium (both the employer’s share and your share). This can be expensive, as you are covering the entire cost of the premium.
Cost: Since you will need to pay the full premium, COBRA can be much more expensive than the cost you were paying when you were actively employed. However, it allows you to keep your existing health coverage during your recovery, which can be helpful if you need ongoing treatment.
What Happens if You Don’t Have Employer-Sponsored Health Insurance?
If you are self-employed or don’t have health insurance through your employer, the situation changes. Here’s what to know:
You’re Responsible for Your Own Premiums: If you’re not covered by employer-sponsored health insurance, you will be responsible for paying your health insurance premiums while on workers’ compensation. Workers’ compensation will cover your medical expenses related to the injury, but your regular health insurance will still require premiums.
Health Insurance Through the Marketplace: If you don’t have health insurance and are self-employed, you may be able to get coverage through the health insurance marketplace, especially if you qualify for a special enrollment period due to a qualifying life event (such as being injured and needing medical care).
How Does Workers’ Compensation Affect Medical Coverage?
While workers’ compensation insurance covers medical expenses related to the work-related injury or illness, it typically only covers treatment directly related to the injury. This can include things like:
Doctor visits for the injury
Surgery related to the injury
Physical therapy
Prescription medications for injury-related treatment
However, health insurance may still be needed for:
Medical treatments unrelated to the injury (e.g., routine check-ups, treatments for other health conditions)
Pre-existing conditions that are not related to the injury
Medications that are not part of your workers’ comp treatment plan
For example, if you have a chronic condition like diabetes or heart disease, those treatments would generally be covered by your health insurance, not your workers’ compensation. In these cases, your health insurance would remain in effect even if you are receiving workers’ comp benefits.
Can Workers’ Comp Pay for Health Insurance Premiums?
In some situations, workers’ compensation may help pay for your health insurance premiums while you are on workers’ comp. This usually depends on your state’s laws and the specific circumstances of your claim.
State-Specific Laws: Some states require that your workers’ compensation benefits include a payment for your health insurance premiums. In these cases, workers’ comp would cover the cost of your health insurance to ensure you are not left without coverage.
Wage Replacement: If you are receiving wage replacement benefits, it’s possible that a portion of those benefits could be used to cover your health insurance premiums. However, this will depend on your workers’ compensation insurance policy and whether your employer is required to pay.
What Happens to Health Insurance After You Recover?
Once you recover and return to work, your health insurance situation should return to normal. This means:
If your employer has been paying your premiums, they will continue to do so, and you will resume your regular payroll deductions for your health insurance.
If you were on COBRA, you will need to continue paying the full premium until you find a new job or other coverage.
If your workers’ compensation benefits ended and you were unable to return to work, you may want to consider looking for alternative health insurance options, like through the marketplace or a spouse’s plan.
Conclusion
Understanding how health insurance works while you’re on workers’ compensation is crucial. Here are the key takeaways:
Your employer typically continues paying for your health insurance premiums while you’re on workers’ comp.
If you lose your coverage, you may be eligible for COBRA to continue your insurance at your own cost.
Self-employed individuals are responsible for their own premiums while on workers’ comp.
Workers’ compensation pays for medical treatment related to your injury, but health insurance may still be necessary for other medical needs.
Knowing these details can help you make informed decisions about your health insurance while you recover. If you’re unsure of how it applies to your situation, consider speaking with an insurance professional or contacting your employer’s HR department for clarification.
Related topic:
5 Best Professional Liability Insurance for Federal Employees
What is Professional Liability Insurance and Why Do You Need It?
