Explaining the Difference Between Workers’ Comp and Disability Insurance

When it comes to workers’ rights, it’s essential to understand the difference between worker’s compensation and disability insurance. As the leading providers of workers’ compensation advice and legislation in Atlanta, we like to keep our clients up to speed and informed on all legal terminology and the differences between various compensatory benefits.

First, we’d like to define a few key terms:

Health Insurance 

This type of insurance benefits individuals by helping them to pay for any medical expenses that are not work-related. Since 2014, many Americans are required to carry some form of health iInsurance. Most employers offer health insurance to their staff as part of their workplace benefits package. However, individuals can purchase their own plans.

Disability Insurance

This type of health insurance assists in paying an individual’s lost income if they become disabled and are subsequently unable to work. In the majority of states, long and short term disability insurance policies are voluntary. However, some states provide state disability programs that give mandatory coverage for all eligible employees. Disability insurance offers compensation for non-work injuries that stop them from working.

Workers’ Compensation Insurance

This type of business insurance provides compensation for an employee’s workplace illness or injury. Each state regulates coverage, and employers are required to carry coverage in the majority of cases

The significant difference between workers’ compensation insurance and disability insurance is that the former only applies to workplace injuries. Whereas disability insurance only applies to non-work injuries. However, most health insurance providers will exclude coverage for illnesses and injuries covered by workers’ compensation insurance.

Also, workers’ compensation insurance is mandatory coverage for most employers; disability insurance is not. Even in states that offer statutory disability programs, employers don’t have to pay into it on behalf of their employees.

All states (excluding Texas) require employers to hold workers’ comp coverage for their staff. Specifics of regulations vary from state to state. For instance, one state may need coverage for businesses that only have one employee. Others require insurance for companies that have four or more employees.

For more information or to schedule a consultation, contact us today.