Workers' compensation insurance is meant to provide wage loss and medical benefits to those injured during the course of their employment. When those benefits are not paid by workers' comp insurance, though, the costs are absorbed by others, including by the injured workers themselves.
A recent study published in the Journal of Occupational and Environmental Medicine shows 79 percent of the costs used to cover workplace illnesses and injuries in the United States are not being covered by workers' compensation insurance. The costs are being covered by a variety of other sources, including employer-provided health insurance, Medicare, Social Security, and even the injured employees.
"Workers' injuries and illnesses cost much more than what current workers' compensation payments suggest, and the resulting low premiums provide little incentive for companies to promote workplace safety," said Paul Leigh, the lead author of the study.
In 2007, the price tag for all worker injuries and illnesses was approximately $250 billion, the majority of which was due to lost productivity. Only 21 percent of the total costs were covered by workers' compensation, however.
The study found that injured workers and their families paid for $10.38 billion of the total costs. In addition to the costs directly paid by families, Leigh explained that Medicare and income taxes have increased in order to cover the 79 percent of costs not being paid by workers' compensation insurance.
To avoid these negative consequences, it is important for injured workers to recognize the value of filing for workers' compensation benefits after incurring a workplace injury, both to reduce the costs being incurred by others and to promote safety in the workplace.
Source: Futurity, "Most Job Injury Costs Not Paid by Workers' Comp," Karen Finney, June 1, 2012.