The changing face of Workers Compensation and Health Insurance

We have all dealt with unprecedented change in the Health Insurance marketplace over the past decade. While that pace of change has slowed, there is no such thing as status quo.

A trend that we are seeing accelerate is insurers attempting to manage their costs by transferring costs to other insurance policies.  Iowa’s two primary health insurers – Wellmark and United Health Care (UHC) (and we are certain many others in Iowa and all states) are part of this trend.

Simply, if you are eligible to be covered under a Workers Compensation policy, UHC and Wellmark have confirmed with us they will not pay medical bills associated with injuries that arise out of and in the course of employment.

Note that this does not say that they won’t pay for injuries that occur if you are actually covered by a Workers Compensation policy.  Their wording and intent is to exclude claims if you are eligible for a Workers Compensation policy, whether you are actually covered or not. The test is if you could have coverage and just about anyone “could have” Workers Compensation coverage.

This change affects two kinds of “employees.”

INTENTIONALLY EXCLUDED OFFICERS:  If you or your company have a Work Comp policy and you elect to exclude yourself from coverage (as many officers of businesses and sole proprietors/partners do) and you get hurt while working, UHC and Wellmark have told us they will not pay your medical bills.

SELF-EMPLOYED AND “OTHERS”:  If you work for yourself and have no employees or for whatever reason have not purchased a Workers Compensation policy and you get hurt while working, UHC and Wellmark have told us they will not pay your medical bills.  I have emphasized “arise out of and in the course of employment" because it is our opinion that even casual labor will likely be interpreted by Wellmark and UHC as “arising out of and in the course of employment.”  A self-employed handyman or a landscaper is an obvious example, but a couple examples that are concerning:

1. You watch a couple of toddlers for a neighbor one afternoon a week and you trip over a toy, tearing ligaments in your knee.
2. You own a rental dwelling and fall off a ladder while replacing a light bulb, breaking your arm. 

In either case or dozens of similar scenarios it would be very rare for the injured person to have a Workers Compensation policy and Wellmark and UHC have responded to repeated inquiries that they will not pay medical bills associated with these scenarios.

And a critical item to remember is that these rules do not just apply to the primary insured.  They apply to any spouse or dependent that is covered by a UHC or Wellmark medical plan whose injury could be determined to arise out of and in the course of employment.

If you, your covered spouse or dependents are currently excluded from a Workers Compensation policy for which you/they are eligible or you/they “do work” in any capacity without a Workers Compensation policy in place, you are at risk for uncovered Medical Bills.

Please call us to discuss your specific situation.  It will be our advice that you (or your spouse/dependents) include yourself (themselves) on an existing Workers Compensation policy or purchase the coverage if you (they) currently do not have it in place.  You may elect to take the risk, but it is important that you do so with eyes wide open.