What is Workers' Compensation?

Workers' compensation is much more variable than the Social Security disability program. It can cover short-term or long-term absences from work, and the disability condition can range from mild and transitory to severe and permanent. The workers' compensation programs are enacted and administered by each of the states.

Workers' compensation pays for medical care for work-related injuries immediately; it pays temporary disability benefits after a waiting period of three to seven days; and it pays permanent partial and permanent total disability benefits to workers who have lasting consequences of disabilities caused on the job.

This is in contrast to Social Security disability payments, which begin five months after the onset of the injury or condition that makes the individual unable to work. Medicare coverage begins 29 months after the onset of the injury.

The vast majority of workers are covered by the workers' compensation programs, which replace some earnings for workers injured on the job and pay for their medical expenses related to the injury. The percentage of the work force covered in 2002 was approximately 97.9 percent.

The “benefits are paid for temporary disability and for total or partial permanent disability indicating the wide range of coverage,” according to the NASI report, The Environment of Disability Income Policy: Programs, People, History and Context. The benefits are coordinated with Social Security so that workers eligible under both programs generally have their combined benefits limited to not exceed 80 percent of their prior earnings.

Example: Mr. Ordell Fontaine works as a delivery truck driver and broke his leg on the job. His doctor puts a cast on Fontaine's leg and tells him he cannot drive for six weeks. Fontaine notifies his employer and files a workers' compensation claim. He receives a portion of his pay for the six weeks he is away from work and his medical costs and rehabilitation expenses are covered.