Workers’ compensation payments cover just 21% of lost wages and medical costs of work-related injuries and illnesses, according to a new OSHA report. Workers themselves and health insurance carriers pay for nearly 63% of these costs, with taxpayers shouldering the remaining 16% in the form of Medicaid and Social Security benefits, the report says.
The Bureau of Labor Statistics estimates that about 3 million workers are injured on the job each year. The National Safety Council calculates that fatal and nonfatal work injuries cost $198 billion in 2012, the most recent year for which complete data are available.
The report, “Adding Inequality to Injury: The Costs of Failing to Protect Workers on the Job,” found that fewer than 40% of injured workers ever file a workers’ compensation claim.
Workers’ comp is designed to cover lost wages, first dollar (no co-pay) medical expenses and rehabilitation costs associated with workplace injuries. Yet OSHA claims that a patchwork of increasingly stingy state-based workers’ comp systems, plus increased use of independent contractors instead of employees, leaves many injured workers vulnerable.
“Changes in state-based workers’ compensation insurance programs have made it increasingly difficult for injured workers to receive the full benefits to which they are entitled,” the report says.
OSHA argues that employers often misclassify workers as independent contractors to avoid paying workers’ comp premiums and dodge OSHA oversight, since the law does not cover self-employed workers.