The Difference Between Workers’ Compensation and Disability Insurance

Job-related injuries and illnesses that render people unable to work can leave employees in a devastating financial scramble. Click here when your medical expenses are mounting, and bills still need to be paid. A workers’ compensation and disability law professional may be helpful. Read on for more information about the specific differences between the two. 

Workers’s Compensation and Disability Similarities 

Workers’ compensation and disability insurance provide monetary compensation to support workers who’ve suffered from injuries or illnesses. The benefits of both financial supports vary depending on one’s occupation and state. Usually, both benefits cover a portion of one’s wages while the disabled person misses time from work. 

Differences Between Workers’ Compensation and Disability Insurance

Workers’ compensation is paid for by an insurance policy supplied by the employer. Disability is often paid for through the employee’s health insurance or the federal government in the form of Social Security Disability Insurance.

Workers’ compensation covers an employee for injuries that occur at the workplace no matter who’s liable. Meanwhile, disability benefits cover injuries that prevent you from working but don’t have to be work-related.

Workers’ compensation benefits typically last longer. Temporary disability payments are paid until one reaches maximum medical improvement and at that point, a lump sum may be offered for permanent disability. Under certain circumstances, disability benefits can last for the lifetime of the worker or the lifetime of his or her dependents. Private disability benefits are only available for a maximum of 26 to 52 weeks.

Workers’ compensation benefits are tax-free and disability benefits are subject to income tax.

Workers’ compensation payments continue at a partial rate even after you return to work and SSDI benefits are usually halted once you return to work.

Workers’ compensation can cover all necessary and reasonable health expenses related to occupational injury or illness, without limitation. SSDI will in some cases cover medical expenses, but there are several additional hurdles.

Workers’ compensation and private disability coverage begin immediately after your injury/ illness, but SSDI benefits require an extensive application process. SSDI applicants typically endure many appeals before their final approval. 

Can Injured Employees Collect Both?

Generally,  some injured workers may be entitled to workers’ compensation and private disability, and SSDI. However, there may be negative consequences for doing so.

For example, private disability payments, such as pensions or insurance benefits, won’t affect your SSDI benefits. However, workers’ compensation and other public disability benefits will reduce your SSDI benefits. 

Generally, the SSDI states that if you receive workers’ compensation or some other public disability benefit and SSDI benefits, the total amount of these benefits combined can’t exceed 80% of your average current earnings before your disability.

If you file for short-term disability when you should have been receiving workers’ compensation benefits, you’ll likely have to pay back a portion of the short-term disability benefits you received in an offset. Understanding how each of these benefits can be dispersed is an important step to recovering maximum compensation for your injuries. 

A personal injury lawyer can be of assistance when you require assistance understanding the rigors of disability and workers’ compensation benefits. 

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