Worker's Compensation

Worker's compensation (workers' comp) is a state-mandated insurance program that pays for medical treatment and lost wages when you're injured or become ill because of your job. It's separate from your health insurance, paid for entirely by your employer, and covers work-related injuries and illnesses exclusively.

If you hurt your back lifting boxes at work, develop carpal tunnel from repetitive typing, or get sick from workplace chemical exposure, worker's compensation covers your medical bills, rehabilitation costs, and a portion of your lost income while you recover. You don't pay premiums, deductibles, or copays for workers' comp claims.

This matters for health insurance because your health plan does not cover work-related injuries or illnesses. That's explicitly excluded from most health insurance policies. If you try to use your health plan for a workplace injury, the claim will likely be denied and redirected to workers' comp.

The process works like this: you report the injury to your employer, your employer files a claim with their workers' comp insurer, and that insurer pays for approved treatment. You may be directed to see specific doctors within the workers' comp system, depending on your state's rules.

Workers' comp is required by law in almost every state for most employers. However, coverage requirements vary. Some states exempt very small businesses or certain industries. Independent contractors are generally not covered by their client's workers' comp (though this is a gray area that depends on how the working relationship is classified).