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Workers' compensation often doesn't cover all costs

If you get injured on the job, do you know how all the costs of your medical care will be covered? Your first assumption might be that workers' compensation insurance picks up the tab. But according to a new study, that's often not the case.

Our local and national political leaders often talk about the rising costs of health care and the fact that many of the current means to pay for that care fall short of the full price. When it comes to workplace injuries and illnesses, workers in Maryland may find that their workers' compensation funds are no different. The authors of a study published in the Journal of Occupational and Environmental Medicine say the premiums many employees pay are artificially low and don't accurately reflect the amount of money required to pay for workplace injuries when they occur.

So how are these costs covered? Almost 80 percent are paid by employee health care plans, Medicare, Medicaid, Social Security and other disability funds. And yes, workers themselves cover some of the costs, too. And it's this cost shifting that keeps the workers' compensation premiums low, the study says.

To provide an idea of the size of the payment gap, the study's lead author presented the total annual costs of occupational injuries and illnesses in 2007: almost $250 billion, with $67.09 billion related to medical care and $182.54 billion from lost productivity. The author found that only 21 percent of those costs were covered by workers' compensation. For the medical expenses alone, workers and their families contributed $10.38 billion.

One of the problems with shifting the cost of workplace injuries out of worker's compensation is that other people end up paying for them. The higher percentage Medicare covers for these injuries, the more everyone pays in taxes. Even more disconcerting is that keeping the premiums low provides a disincentive for companies to promote workplace safety, which could lead to even more injuries.

Another problem is the stigma associated with filing a workers' compensation claim. If more employers were to openly acknowledge that workplace injuries happen, not as many workers might shy away from filing a claim when doing so is well within their rights. Workers who need to file a claim may want to consult an attorney to ensure they're fully compensated -- without having to pay out of pocket or with any other extra funds.

Source: Futurity, "Most job injury costs not paid by worker's comp," Karen Finney, June 1, 2012

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