When you’re unable to work and your earnings are impacted, it can feel as if your whole life has become destabilized. You’re not being dramatic — no matter the severity of your situation, taking a financial hit because of injury or illness is a highly stressful situation.
The good news is that help is available while you’re recovering from injury or illness. There are two avenues to explore when it comes to monetary compensation: workers’ compensation and short-term disability. This article will break down the differences and similarities between the two so you can determine which program is the best next step for you.
While it’s easy to confuse these two benefits, there are some key legal and practical differences between workers’ comp and short-term disability. It’s important to familiarize yourself with each of these benefits if your ability to work has been impacted.
Workers’ compensation is a system that was created to provide partial medical protection and income protection for employees who get injured or become ill from their job. Having this system in place also gives employers extra incentive to provide a safe working environment, as the employer is the one paying for this compensation.
Short-term disability is a type of business insurance that is designed to cover part or all of an employee’s income if they experience an injury or illness that isn’t work-related. This type of insurance is voluntary, so it is up to you to opt in to contributions. Most people with private short-term disability insurance get it through their employer, with some employers providing it for free.
In layman’s terms, workers’ comp is applicable when you get hurt on the job, while short-term disability is a safety net for injuries or illnesses that are non-work related but prevent you from carrying on at work. However, there are still some crossovers and similarities between both these compensation methods. Let’s dive into some real-world examples of each type of insurance to make it clearer.
When an employee gets hurt on the job, everyone suffers. The person who is ill or injured is top of mind, but the business owner and business itself are also negatively affected as they are down an employee. That’s where workers’ comp comes in. Most businesses with one or more employees are legally required to provide workers’ comp coverage. Workers’ comp insurance is designed to cover employees who are injured or get sick while performing their required duties at work.
Workers’ compensation typically covers lost wages, medical care, death benefits, and any rehabilitation costs associated with your illness or injury that was incurred on the job.
Illness and injury are stressful for many reasons, even more so when they impact your income. While we all hope for the best, short-term disability is a voluntary business insurance policy that can be a lifeline if you find yourself unable to work. Private short-term disability insurance is available to be purchased — most people who receive it have a policy that has been offered directly through their employer. Some lucky people have disability insurance benefits built into their work policies and paid for by their employers, while others allow workers to contribute to their own coverage.
Short-term disability coverage is applicable to illness or injury that isn’t a result of your job but affects your ability to work. For example, some situations that would qualify you for short-term disability include car accidents, sickness, long-term diseases, surgeries, or childbirth.
Because both workers’ comp and short-term disability are designed to protect you from loss of income due to illness or injury, there can be some confusion between the two. While each type of benefit is meant to supplement your wages while you cannot work, the key difference is in the circumstances behind it. Both systems are put in place to ensure workers have adequate financial aid during recovery periods — workers' compensation just places more responsibility on the employer if the incident happens on their turf.
When your income is affected due to illness or injury, odds are your priority is trying to secure the most compensation in the shortest amount of time. However, it’s important to thoroughly consider your individual circumstances before making a decision about which benefit to apply for. Misinformation or a lack of research on your part may mean you receive less money than you are legally entitled to. So, which road are you supposed to take?
Most workers’ comp insurance policies pay two-thirds of your regular income as opposed to your full salary, as well as reimbursement for costs incurred from your on-the-job injury or illness (like your healthcare).
On the other hand, you can view short-term disability as a straight-up supplement for your regular income without the additional coverage of things like medical costs. Short-term disability typically pays a lower rate than workers’ comp, clocking in at 60% of an employee’s salary.
The length of time that you can receive either type of these benefits varies based on the state you live in and your individual circumstance. For example, you can collect workers’ compensation for up to 525 weeks in New York, but the limit in Texas is 401 weeks. Occasionally, if there are lasting or permanent impacts to your health after a workplace injury, you may receive benefits for even longer (though usually, you’ll receive a smaller amount). Most short-term disability insurance provides benefits for three to six months — regardless of whether or not your injuries have a lasting impact on your ability to work.
Whether through ulterior motives or lack of knowledge, your employer may try to encourage you to take short-term disability over workers’ comp. This is because they are liable to pay more if you claim for workers’ comp. If your boss is trying to influence your decision, remember that you are entitled to workers’ compensation if you are harmed at or as a result of your work. If they reject or dispute your claim, you may be entitled to short-term disability instead. It’s best to seek legal advice in this situation.
Put simply, you can’t receive workers’ compensation and short-term disability at the same time for the same incident. You may technically qualify for both, but your double payday will likely be flagged. In the event that you successfully apply for both benefits and receive them simultaneously, your insurers will eventually catch on.
This means your benefits will either be reduced to recoup the excess, or you will have to pay back the difference. However, there are instances where you may be able to apply for short-term disability while your workers’ comp claim is being examined. As long as you are not claiming the two concurrently, you’re staying above board.
While there are rare situations where a person can apply for both benefits, there are strict circumstances and legalities that come into play. If you are in doubt about whether you meet the criteria for both workers’ comp and short-term disability, chat with a legal professional for more insight.
Navigating the waters of workplace injury can feel overwhelming and confusing, especially when you need to focus on recovering. This is where Atticus comes in handy.
Atticus provides thousands of users with free advice from real lawyers who specialize in workplace injury and disability claims. The team at Atticus believes that you have a right to free and accessible legal assistance. Not only is there plenty of useful legal information on our website, but you can also contact practicing lawyers for help with your workers’ comp and short-term disability queries.
If you want to know more about what benefits you should apply for, how to apply for them and what your rights are in a workplace injury situation, get in touch with Atticus today.
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