As you may have read in our previous post “When Do Small Businesses Need Workers’ Comp?” employers are often required to carry Workers’ Compensation Insurance. This policy helps pay for the cost of occupational injuries and diseases.
Though Workers’ Comp may seem like health insurance for employees (albeit only for workplace conditions), it’s important to know the difference – especially now that the bulk of Obamacare (aka the Affordable Care Act) is in place. Read on to learn whether the ACA affects Workers’ Comp.
The Short Answer: Obamacare Does Not Directly Affect Workers’ Comp
Obamacare only affects health insurance, which, as we learned in “Protecting Employees: Workers’ Comp vs. Health Insurance,” only provides coverage for non-work injuries and illnesses. This is why the healthcare reform stipulations have no direct effect on Workers’ Compensation Insurance.
The ACA does not make any changes to Workers’ Comp programs – those are still controlled and run by the state. (For more information on your state’s program, check out our guide to Workers’ Compensation Insurance laws.)
But now that everyone is required to carry health coverage, people are starting to wonder if health insurance will pay for workplace injuries and illnesses. After all, freelancers, independent contractors, and other small-business owners are typically excluded from the mandates of state Workers’ Comp laws and therefore lack coverage.
Will health insurance pay for their injuries? Probably not. Most health insurance policies exclude coverage for occupational injuries and diseases and will continue to do so. But what’s concerning some experts is the indirect affects that Obamacare may have on Workers’ Comp.
The Long Answer: Experts Predict Obamacare Will Affect Workers’ Comp
Some folks in insurance circles do think Obamacare may have (perhaps unintentional) effects on Workers’ Comp. While none of the following are a direct result of the legislation, we thought small-business owners might be interested in hearing the common speculations:
- Decrease in fraudulent Workers’ Comp claims. The theory is that if a larger percent of the population has access to healthcare, there will be less reasons for employees to blame the back injury they sustained while doing yard work on the labors of their job. These folks argue that Workers’ Compensation has always paid for “questionable” work-related injuries, especially from those employees with preexisting conditions or those who didn’t have health insurance. Now that no one can be denied health coverage, experts believe that many of these claims will be filed under Health Insurance, not Workers’ Comp.
- Reduction in WC claims frequency. If access to healthcare makes for a healthier US population, it stands to reason that the number of Workers’ Compensation Insurance claims may decrease, too. Additionally, healthier individuals may lead to quicker recoveries and less expensive WC payouts, which may keep premiums affordable. To learn more about what influences Workers' Comp costs, check out our Workers' Comp Insurance Quote Analysis.
- Delays in Workers’ Compensation treatment. There is already a physician shortage in the United States and this deficit is expected to increase over the next several years – especially considering more (now insured) people will be seeking care. Because the Workers’ Compensation system often demands more paperwork and justification from treating practitioners, more doctors may shy away from Workers’ Compensation cases. These delays could potentially increase the cost of claims.
Obviously, it’s still too soon to tell if Obamacare will have any real effect on Workers’ Compensation Insurance. But as soon as the study is done and those numbers are available, you can be sure we’ll keep you posted. In the meantime, you can learn more about this coverage by reading our Workers’ Compensation Insurance blog posts.
This post is part of an ongoing series on Workers’ Compensation Insurance and the high cost of occupational injuries. Stay tuned for more on how to handle work injury claims, adhere to state Workers’ Comp laws, and find affordable coverage!