Next Insurance

Workers' compensation vs. health insurance

What’s the difference between workers’ compensation and health insurance?

While workers’ compensation and health insurance have many similarities, there are key differences that are important to understand.

To best protect your business, your health and your employees, you might need a combination of both types of insurance.

Workers’ compensation

Workers’ compensation insurance helps to protect employees and employers from paying significant out-of-pocket expenses after a work-related injury or illness.

Many states require business owners to provide workers’ comp as soon as they hire their first employee. In some states, that requirement even includes part-time workers and contractors.

Workers’ comp benefits

Workers’ comp can help cover medical expenses, loss of income and retraining for an injured employee after a workplace accident.

It also provides benefits to employees permanently injured on the job and survivor benefits to an employee’s family members in the unfortunate event that they die due to a work-related injury or illness.

Without this insurance, a business owner could be held responsible for covering the costs associated with workplace injuries, which could easily run into tens of thousands of dollars. Business owners could also face fines and penalties for being out of compliance with state laws.

Does Workers’ Comp cover health insurance?

As a small business owner, an important thing to consider when understanding workers’ compensation vs. health insurance is that workers’ comp is only for work-related illnesses and injuries.

It doesn’t serve as a replacement for traditional health insurance for you or your employees.

Workers’ comp claims can help cover medical-related costs and lost wages.

A successful claim will not typically cover your monthly bill for health insurance.

Health insurance benefits

Health insurance helps cover personal illnesses or injuries that occur outside of work. For example, if you get sick with pneumonia, your personal health insurance can help cover the cost of doctor’s appointments, medicine or even a hospital stay.

Does health insurance cover work-related injuries?

You might be wondering: Can I use my own insurance instead of workers’ comp?

Your personal health insurance helps cover expenses if you get sick or injured, but it won’t always cover a workplace injury.

Unlike workers’ compensation, health insurance also typically won’t provide coverage for lost wages if you have to miss work because you are sick or recovering from an injury.

As a solo proprietor, it can be hard to justify paying for both workers’ compensation and health insurance premiums since you don’t have any employees — but you might need to have both types of insurance to maximize your coverage.

What does Workers’ Comp cost vs. health insurance?

It’s important to know that employers must typically pay the entire cost of workers’ comp coverage.

In most states, business owners can share the cost of healthcare insurance with employees, pay for all expenses or not offer coverage.

Workers’ compensation insurance is regulated on the state level, so exact costs depend on where your business and employees are located.

Costs also depend on a few other factors. These can include, but aren’t limited to:

  • The number of employees in your business
  • The type of work your employees perform
  • Your overall payroll
  • The industry your company is in
  • Your claims history

Generally, businesses in higher-risk industries pay more in workers’ compensation premiums.

Employees and business owners often share a monthly premium with individual health insurance. That coverage can help with preventative care, plus the costs of needed medical procedures, such as surgeries.

Learn more about workers’ compensation costs.

Who pays for health insurance while someone is on Workers’ Comp?

Who pays for my health insurance while on workers’ comp? The answer can depend on the regulations within each state and how long your employee will be out of work.

If your employee is going to be out for fewer than three months, and meets the qualifications in the Family and Medical Leave Act (FMLA), their health insurance remains protected while they are out. For those out longer than that, COBRA Continuation is another option. However, it requires employees to maintain that coverage.

It’s best to look to your state regulations for guidance on how this could apply to you or your employees.

How Next Insurance helps protect small business owners with Workers’ Comp

Regardless of how careful and safe you are at work, there’s always the potential for accidents to happen.

NEXT can help you determine the different types of business insurance you might need to reduce your potential financial losses if something unexpected happens at your business.

With NEXT, you can get workers’ comp coverage customized to your business within minutes. Once you purchase your policy, you’ll have instant access to your certificate of insurance.

Start a free instant quote today to explore options for your business. Our licensed U.S.-based insurance advisors are  ready to help if you have any questions.

There’s a lot to love about NEXT

Business insurance in less than 10 minutes

Get insurance in less than 10 minutes and you can save up to 25% in discounts*

Tailored business insurance

Unique, flexible coverage with easy monthly payments

Get business insurance online

Do it all 100% online or talk to a licensed U.S.-based advisor

Let’s find the coverage you need for your business

Business insurance is divided into different policies. We offer seven types so it's easy to design the coverage that fits your business.

General Liability insurance
General Liability

Protect yourself from accidents that cause physical injury or damaged property.

Professional Liability or Error and Omissions Insurance
Professional Liability/E&O

Shield yourself from lawsuits that claim your work errors caused financial losses.

Workers' Compensation Insurance
Workers’ Compensation

Cover medical bills and lost wages if your employees have an accident at work.

Commercial Auto Insurance
Commercial Auto

Stay on the road with coverage for dents, tows and damage to someone else’s vehicle.

Tools & Equipment Insurance
Tools & Equipment

Upgrade your general liability coverage to protect any gear that’s stolen, damaged or lost.

Commercial Property Insurance
Commercial Property

Keep your building, inventory and equipment protected from fire or water damage.

Business Owner’s Policy Insurance
Business Owner’s Policy

Combine general liability and commercial property into one policy to protect your business.

Take a look at some helpful blog posts
Perkins Builder Brothers tips for hiring, training and keeping construction employees
Grow

Perkins Builder Brothers tips for hiring, training and keeping construction employees

How to hire your first employee: A step-by-step hiring checklist
Start

How to hire your first employee: A step-by-step hiring checklist

Small business hiring: 7 signs you’re ready to hire help and what to consider
Grow

Small business hiring: 7 signs you’re ready to hire help and what to consider

* To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
** The cost data presented here are based on NEXT active customers in the U.S. who purchased general liability insurance over the previous 12 months. These data should not be considered a substitute for obtaining a quote specific to your business. These data were updated in July 2022.
What we cover
Chat with Us

Mon – Fri | 8 a.m. – 5 p.m. CT

FacebookYoutubeLinkedinTwitter
© 2022 Next Insurance, Inc. 975 California Ave, Palo Alto, CA 94304, United States
Better Business Bureau
Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.