Workers’ comp insurance covers injuries and illnesses that arise from or are caused at work. Health insurance, which includes disability insurance, covers injuries and illness not related to work. While at first glance, the distinction looks obvious, depending on the facts, the boundaries between these two types of insurances can become complicated.
The Different Insurances In California
Workers’ Compensation Insurance – This insurance is paid by the employer for the benefit of their employees. It can cover medical expenses and lost wages while a worker is hurt. Workers’ comp may cover temporary (short-term) or permanent (long-term) disabilities, and is mandatory in California.
Health and Disability Insurance – Health and disability insurance may be provided by California employers but is not required. Health insurance was mandatory for individuals under the Affordable Care Act, or Obamacare, until that requirement was repealed on January 1st, 2019. Health insurance, however, is still mandatory under Califonia law. Disability insurance, like health insurance, is not employer-mandated. It can be purchased for short or long-term coverage.
State Disability Insurance Program (SDI) – California requires all wage earners to pay a portion of their state tax to a state-run disability fund. The SDI program offers workers who have been hurt outside of work to collect short-term disability insurance. These are weekly payments to cover medical expenses and lost wages. So, every employee in California has short-term disability coverage.
How Workers’ Comp Versus Disability Insurance Can Get Complicated
The line between workers’ comp insurance and disability insurance can get blurry when the illness or injury arguably occurs at and away from work. Let’s consider the following scenario to illustrate the complexity that can be created.
Consider an employee with a history of high blood pressure and hypertension who suffers a heart attack while at work. At the time, they were hurrying to finish a last-minute order on a hot July day in a warehouse with no air conditioning. The employee is going to miss work while having medical costs and lost wages.
The employee has a claim that their work environment contributed to their heart attack. It was a hot, stressful situation. Yet, the employer and their insurer, who want to keep their premiums and costs down, will make the argument that the pre-existing condition contributed to the injury. If the employee wants to receive workers’ comp, they may need to establish to what degree the heart attack occurred at work.
The Economic Development Department of California (EDD) explains that an employee in a scenario like the one above may file for the SDI program and workers’ compensation at the same time. They will not receive payments from both except under limited circumstances. For example, if the employee’s workers’ compensation is delayed by the employer or their insurer.
When You Need To Protect Your Workers’ Comp
Whether an employee’s injury or illness is covered by workers’ compensation or disability insurance can be of vital importance. Take the example of a long-term disability. Unless long-term disability insurance was purchased from a private insurer, many of the costs would go uncovered.
California’s SDI program only provides short-term disability insurance. Workers’ compensation attorney Joseph Kritzer is here to help you make informed decisions to protect your interests.