The likelihood of an employee being absent from work for one or more days over the past year due to work-related injuries is 2.6 times greater for employers who don’t offer health benefits than for those who do. Similarly, the probability of employees being absent for work one or more days over the past year for a work-related illness increases by 75% when the employer doesn’t offer health benefits, according to a recent survey of U.S. employers by UL’s Integrated Health and Safety Institute (IHSI).
But what is the connection between health benefits offerings and absences due to work-related injuries and illnesses? Many may assume the connection is a symptom of the spillover effect: Employees becoming injured or ill off the job without access to adequate healthcare are passing these conditions off as work-related to avail themselves of the medical coverage and possible wage loss coverage offered by Workers’ Compensation. There is some tangential evidence that could support this presumption. Past research supports the idea that having health benefits covered by the employer makes employees less likely to file for Workers’ Compensation benefits, medical, and lost wage replacement.1
However, the presence of health benefits coverage as a disincentive for filing Workers’ Compensation does not necessarily equate to the absence of employer provided health benefits creating an incentive to file Workers Compensation claims. In fact a famous study by Card and McCall looking at would-be Workers Compensation claims (First Reports of Injury) filed in Minnesota for a period of four years found that workers with a low probability of employer-provided medical coverage were no more likely to report a work-related injury on a Monday than those with medical coverage.2
There is however an alternate explanation to the disproportionate occurrences of work-related injury and illness absences among employees not covered by employer provided health benefits. It is simply that the baseline health condition of workers who have access to health benefits is better than those without access, and thus these healthier employees are less likely to incur a work-related condition and the conditions that do occur are less severe. The evidence supporting this premise is somewhat indirect, but compelling. We know that employees with greater number health risk factors such as obesity, hypertension, and unmanaged diabetes are more likely to file a Workers’ Compensation claim than those employees with fewer health risk factors.3 Likewise Workers’ Compensation costs (a surrogate for severity of injury) also increases with increasing number of health risks.4 We also know that Americans who have health insurance are more likely to receive preventive care, the type of care designed to identify and help reduce these health risk factors.5 So according to this possible explanation, employees with access to employer-provided healthcare are generally in better states of health and less likely to experience the more severe injuries at work that lead to absences.
In the end it may be either or a combination of both explanations that reveal why employees without employer provided health benefits are more likely to be absent from work due to a work-related injury or illness than their compatriots who have access to health benefits. If, in the future, companies are faced with a decision to provide or not provide health benefits to employees, the prudent employer will look at the whole picture before reaching a decision.
1 Dillender, M. (2016). Potential Effects of the Affordable Care Act on Workers’ Compensation. Employment Research Newsletter, 23(2), 1.
2 Card, D. and B. P. McCall (1996). Is workers’ compensation covering uninsured medical costs? Evidence from the “Monday effect”. Industrial and Labor Relations Review 49, 690-706.
3 Kuhnen, A. E., Burch, S. P., Shenolikar, R. A., & Joy, K. A. (2009). Employee health and frequency of workers’ compensation and disability claims. Journal of Occupational and Environmental Medicine, 51(9), 1041-1048.
4 Musich, S., Napier, D., & Edington, D. W. (2001). The association of health risks with workers’ compensation costs. Journal of Occupational and Environmental Medicine, 43(6), 534-541.
5 DeVoe, J. E., Fryer, G. E., Phillips, R., & Green, L. (2003). Receipt of preventive care among adults: insurance status and usual source of care. American Journal of Public Health, 93(5), 786-791.