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How Workers’ Compensation Differs From Disability Insurance

Workers’ compensation benefits are provided to individuals who endure an injury or illness causally related to workplace duties.  This compensation system is in place to prevent injured/ill employees from suing their employer.  New Jersey, similar to most other states, mandates employers pay for workers’ compensation to provide essential financial support for work-related injuries and illnesses suffered by employees.

State disability insurance exists to provide benefits to those who endure injury or illness unrelated to work yet and subsequently prove unable to work.  This means disability insurance is applicable to an extensive range of injuries and illnesses.  Such insurance is available to workers in instances when workers’ compensation is unavailable.

In short, the main difference between state disability insurance and workers’ compensation insurance is workers’ compensation provides coverage for injury/illness the employer would otherwise be financially liable for.  Alternatively, state disability insurance provides coverage for injury/illness the employer is not financially liable for.  With this said, injured workers might be entitled to obtain state disability benefits while simultaneously receiving workers’ compensation benefits if the compensation from the state exceeds that provided by the workers’ compensation system.

If the workers’ compensation claim is not approved, the injured/ill employee might be entitled to state disability benefits up to the point at which the claim is approved.  At that point, the state is to be paid the money transmitted while the workers’ compensation dispute was sorted out.

Do You Have a Disability Claim or a Workers’ Compensation Claim?

In some cases, when an employee endures an injury/illness causally related to workplace duties, the employer will recommend filing a disability insurance claim as opposed to a workers’ compensation claim.  This occurs as employers prefer to avoid paying workers’ compensation benefits.  The payment of workers’ compensation benefits will inevitably cause premiums to escalate, ultimately adding that much more to the company’s overhead expenses.

This is precisely why injured employees are sometimes pressured by their employer’s human resources personnel to file an injury claim through the state’s disability insurance program.  This course of action really is that much more cost-effective for the employer yet it does not make sense for the injured or ill employee.  Disability insurance is tailored to provide coverage for disabilities unrelated to work.  Furthermore, disability benefits pale in comparison to those provided through the workers’ compensation system.

Workers’ compensation provides wage replacement compensation up until the point at which the workers can return to full duty or until MMI is attained.  MMI is an acronym short for maximum medical improvement.  Once this point is reached, the employee is entitled to permanent disability benefits in addition to indefinite medical care.  However, state disability insurance only provides compensation for upwards of 26 weeks for each disability period.

Injured or Ill?  Contact Schibell Law LLC Attorneys at Law

If you suffer illness or injury as a result of your work-related duties and your employer suggests you file a claim through New Jersey’s state disability insurance instead of through the workers’ compensation system, reach out to our legal team as soon as possible.  We will do everything possible in accordance with the law to ensure the state’s workers’ compensation funds cover all costs related to your injury or illness.  Dial 732-774-1000 to coordinate an initial consultation with our workers’ compensation attorneys.

Richard N. Schibell, Esq.

is the founding partner at Schibell Law LLC concentrating in all aspects of Workers’ Compensation throughout New Jersey. Mr. Richard N Schibell graduated from Boston College with a Bachelor of Arts, concentrating in both Philosophy and History. He went on to receive his Juris Doctorate degree from Seton Hall University School of Law.

Following his graduation from law school, Mr. Schibell served as a Judicial Law Clerk to the Honorable Richard W. English, J.S.C., in the Civil Division of the Monmouth County Superior Court.