Exclusively from Foa & Son
Speaking of workers compensation, many states allow owners and officers to exempt themselves from coverage in the company workers compensation policy. As a cost saving measure many individuals do this, thinking that the medical costs for any injuries they might suffer would be covered by their health insurance plan. There is a risk to this strategy, however, that should be considered.
Individual and group health insurance policies commonly contain exclusions for claims arising out of work related injuries. Here’s an example of one typical exclusion:
“Unless exceptions to the following exclusions are specifically made elsewhere in this Agreement, no benefits are provided for Services: Incident to any injury or disease arising out of, or in the course of, any employment for salary, wage or profit if such injury or disease is covered by any workers’ compensation law, occupational disease law or similar legislation.”
Note the exclusion is for injury or disease covered by a workers compensation law; the exclusion would apply to a work related injury that would fall under the law, whether there is a policy to cover it or not. An owner or officer who chose to decline coverage under the company workers compensation policy could easily find themselves uninsured for a work related injury under the workers compensation policy, and with no coverage in the health insurance due to an exclusion like this one.
There is a lot to be said for having the coverage for full medical costs, rehabilitation expenses and lost wages that a workers compensation policy provides. It rarely makes sense for an otherwise eligible individual to opt out of this coverage.