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Will Cutting or Eliminating Health Insurance Cause Rise In WC Claims

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Cutting  Or Eliminating Health Insurance v. Workers Comp

One of  the under-the-radar effects of cutting or eliminating health insurance is a rise in Workers Compensation claims.  If an employee has no health insurance or has to pay a very large deductible, this may cause them to turn to Workers Comp as a way to pay for an accident that happened off the job.

Average of Eliminating Health Insurance WC Claims
Wikipedia – Farcaster

This is one of the assumptions that have been made in the WC arena for years.I came across a 2005 study that seems to fly in the face of this assumption.  Actually, I was researching to backup my assumption that employees will substitute WC for health insurance.  The Rand Study known was titled “How Does Health Insurance Affect Workers’ Compensation Filing?“The conclusion of  the 38 page working paper was:

  • Uninsured and more vulnerable workers are actually less likely to file claims than the insured.
  • The likelihood of filing WC claims has more to do with the employers’ characteristics and not the employees’  circumstances
  • Whether or not employers offer health insurance to employees appears most important, much more important even than the insurance status of workers themselves
  • Even repeat injury-sufferers are more likely to file during episodes in which their employer offers health insurance, but not statistically more likely to file during episodes in which they themselves are insured.
  • This suggests that the workplace environment and employer incentives may have a significant, or perhaps even the dominant, impact on workers’ compensation filing.
Cheerful Medical Personnel Eliminating Health Insurance Showing Hand Gesture
StockUnlimited

Some of the conclusions drawn in the study do make sense.   I also found another study from The Rand Corporation  titled The Impact of Health Care Reform on Workers’ Compensation Medical Care.  The author of the 2012 study used Massachusetts as his basis for drawing any conclusions as the state had been under healthcare reform previously.

The conclusion drawn was that healthcare reform caused some of the Workers Comp hospital bills to be paid under health.   This was due to a 5 – 10%  reduction in WC hospital volume since Massachusetts enacted healthcare reform.

The most recent study somewhat contradicts the previous study.   I am now confused as to whether or not health insurance reductions by employers will have an effect on WC.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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