Worker compensation insurance gives legal liability coverage to the employer. It helps the employer to cover the financial and legal costs when one of its employees suffers injury during working hours. Similarly, a group health insurance policy takes care of the medical expenses of the employee. Both covers serve different purposes.
An employee can get coverage either in worker compensation insurance or health insurance for the same injury. The principle of indemnity applies as per which the insurance company does not pay anything more than the actual loss.
Read More: How Do You Get Workers Compensation Insurance?
Claim settlement under WC and health insurance
Both the WC policy and group health insurance company can’t settle the entire amount with regard to the same injury. Hence, the insured will not get more than the loss.
If the injured worker approaches both the group health insurer and the WC insurance company, the loss is settled on a proportionate basis. For instance, both insurance policies cover medical expenses. If a worker approaches both the insurers for the settlement of medical expenses, the claim will be divided between them.
Often employers discourage injured workers to approach the WC insurer because of the stigma associated with such claims. Also, a worker may not be able to show that his illness or injury is work-related. Finally, for workmen compensation insurance to pay a claim the courts must decide the amount. This can be time-consuming. Therefore, such workers prefer to approach their group health insurer.
In the case where the injury results in permanent disability, the injured worker should approach the workmen’s compensation insurance. It covers loss of income besides providing for medical expenses. However, group health insurance only pays for medical expenses and doesn’t cover income loss. Similarly, group health insurance will not pay any benefit if the worker dies or has a partial or total disability. These must be claimed under workman insurance schemes.
Case: 1
For the last three years, Mr Nirmal Sinha was working in a W.N Engineering Company as a technician. The company had stringent safety measures which all its employees diligently followed.
On the personal front, he had a two-year-old son and a wife with whom he was living in Delhi. Last year, while playing with his son at home, he slipped on the stairs. He fell to the ground and suffered grave injuries in his back. With the help of neighbours, her wife rushed him to a hospital where doctors treated him for his injuries.
Due to the fall, he became temporarily disabled from the lower body and had to stay at the home for approximately six months.
While the emotional and physical loss can’t be curtailed in any scenario, their group health insurance policy of Nirmal helped him cover the medical expenses. He asked his wife to approach the HR department of his company and filed the insurance form accordingly. The insurer asked for medical reports and after carefully reviewing the situation, settled the claim.
In this case, W.N Engineering Company also had in place a workers’ compensation insurance policy. But Nirmal was not eligible to get benefits under it. As the accident happened at home, it did not fall under the purview of the workmen’s compensation insurance policy.
In this case, the corporate health insurance policy offered by W.N Engineering came to the rescue of Nirmal as the policy settled the medical expenses.
Case: 2
22-year-old Suraj was happy to get his first job. Now he was able to support his family financially. He got a job in the paper mill for a monthly income of Rs 8,000. For the first few days, the company provided him with training on the safe usage of the machines.
Read More: Who Should Buy Workers Compensation Policy?
One day, four fingers of Suraj’s right hand came into a paper machine while working on it. His supervisor, Ajay Shukla, was present at the time of the accident and he immediately stopped the machine and rushed Suraj to a nearby hospital.
The doctor treated him for his injuries and kept him under observation for one week. Sadly, due to the accident, he lost all four fingers. The disability forced him to change his current job profile and opt for a low-earning occupation.
The paper mill was offering both the workmen’s compensation insurance and group health insurance policy. Suraj consulted his supervisor to know which insurer he should approach. His supervisor advised him to go to the worker courts because not only would they award medical expenses but also an amount for the permanent partial disability. The workmen’s compensation policy would settle the claim.
As Suraj also suffered from a temporary disability and had to stay at home, the workmen’s compensation insurance not only covered the medical expenses but also paid compensation to cover the loss of income. The accident happened during working hours, and therefore, Suraj was eligible to get benefits under the workmen’s compensation insurance policy as well.
The workmen compensation insurance company settled the entire claim as Suraj did not approach the group health insurance company,
Understanding the main differences between group insurance and WC policy will help you choose the right policy and help with claim settlement.
