Todd Valentine, Benefits Specialist at Beehive Insurance
As a business owner you have the option to waive coverage of Workers Compensation insurance. The question you must ask is…are you covered by
your group health plan if you have waived Work Comp? Each carrier has different exclusions and limitations as it pertains to accidents on the job. Below is a summary of the legal language from the five main health insurance carriers in Utah.
“This is coverage for business owners, including partners and sole proprietors,
for services resulting from work-related accidents not covered by workers’ compensation insurance. This benefit is not a replacement for workers’ compensation insurance.”1
“Charges in connection with a work-related injury or sickness for which coverage is provided or would be provided under any workers’ compensation, employer’s liability, or occupational disease law. When the employer is required by law to have such coverage, this exclusion applies whether or not such coverage is in effect.”2
Regence Blue Cross and Blue Shield
“Employer must carry Workers Compensation on all enrollees; however, 24-hour coverage is available and required for business owners who are not covered by Workers Compensation.”3
“A sickness or bodily injury which is covered under any Workers’ Compensation or similar law. This limitation also applies to a covered person who is not covered by Workers’ Compensation and lawfully chose not to be.”
“Health services for which other coverage is required by federal, state or local law to be purchased or provided through other arrangements. Examples include coverage required by workers’ compensation, no-fault auto insurance, or similar legislation. If coverage under workers’ compensation or similar legislation is optional for you because you could elect it, or could have it elected for you, Benefits will not be paid for any Injury, Sickness, or Mental Illness that would have been covered under workers’ compensation or similar legislation had that coverage been elected.”5
The Biggest Issues:
Most owners don’t personally complete the group health application. The HR or office manager usually doesn’t know if the owner has waived Work Comp, thus omitting this information from the group application. Since the information is optional, the lack of information doesn’t stop the process or trigger any follow-up by the carrier or an untrained agent. All of this could result in a gap in coverage where the business owner isn’t covered if they are injured on the job.
To avoid this type of gap in coverage, it’s best if your P&C agent and Benefits agent communicate to make sure they aren’t leaving your company unprotected.
1 Select Health 2012 Product Handbook
2 Altius Small Group Underwriting Manual
3 Regence Blue Cross and Blue Shield Small Group Underwriting Manual
4 Humana Small Group Underwriting Manual
5 United Healthcare 2012 Benefit Summary Limits and Exclusions