Is ERISA the Same as Workers’ Compensation?
Though both ERISA and workers’ compensation may potentially cross paths when an employee is injured, they are very different programs.
If you are a South Carolina employee who has been injured, it is important to determine how you will be compensated for your injuries. This is where the distinction between ERISA and workers’ compensation becomes important.
What Is the Difference Between ERISA and Workers’ Compensation?
ERISA stands for the Employee Retirement Income Security Act of 1974. The act pertains to employer-offered benefits such as disability, insurance, and retirement.
These benefits are not required to be offered, but if applicable, ERISA mandates certain minimum requirements that must be upheld to ensure employee rights are not violated. ERISA is a federal law that supersedes state laws.
Workers’ compensation coverage is a mandatory requirement for most employers. Employers must carry workers’ compensation insurance to protect employees who are injured in the scope of employment.
Generally, South Carolina requires employers with more than four employees to carry workers’ compensation insurance. However, there are some exceptions.
While workers' compensation compensates people for injuries suffered on the job (medical expenses and lost wages), disability and health insurance compensate people who suffer injuries and illnesses that are unrelated to their job. Disability provides wage replacement benefits, and health insurance covers medical costs.
Do ERISA and Workers’ Compensation Overlap?
Both ERISA and workers’ compensation may offer disability benefits and compensation for medical treatment. This is where the two programs may overlap depending on how they are used.
Complications may arise with ERISA benefits and workers’ compensation benefits when an employee is injured within the scope of employment. In this case, the employee may be unsure which insurance coverage to rely on. For example, they may be covered by both workers’ compensation and ERISA healthcare or disability benefits.
It is important to make an informed decision on whether you should file your claim under workers’ compensation or ERISA benefits. This should be primarily determined by the nature of the injury and whether or not it was work-related.
Potential Complications of ERISA and Workers’ Compensation
In most cases, workers’ compensation provides benefits to employees injured on the job in exchange for limiting the liability of the employer.
Injury or disability claims outside of employment may be covered by other employee disability and health insurance benefits, which are subject to ERISA. Whether the claim is filed through workers’ compensation or ERISA benefits can make a difference in how you receive the compensation you are entitled to.
Generally, work-related injuries or illnesses are filed as workers’ compensation claims. Injuries or illnesses that occur outside your scope of employment should be covered by ERISA disability and healthcare benefits.
If you receive medical treatment for a work-related accident and submit a claim to your health insurance, the insurer may be able to seek reimbursement for amounts they have paid out of any settlement you later receive from the insurance company.
Also, your health insurance may deny your claim if they are aware that the accident was work-related. When a claim for either ERISA or workers’ compensation is wrongfully denied, there is a process for appealing or even filing a lawsuit.
Even if a workers’ compensation claim is contested, the employee will typically continue to receive medical treatment that is paid by their employer-provided health plan. This coverage falls under ERISA.
When the workers’ comp claim moves toward a settlement, the question will arise as to whether the health insurance plan needs to be refunded. This can be a big sticking point depending on the language of the ERISA benefits.
When to Hire An ERISA Attorney
If you have been denied medical coverage or disability benefits by your employer, you should speak to an experienced attorney who understands the complex system of ERISA and workers’ compensation in South Carolina.
Insurance companies and workers’ compensation claim adjusters will always offer you the least amount that they can get away with, and you do not have to accept what is offered. ERISA cases are time-sensitive, and the sooner you can receive the benefits you are entitled to, the better.
At the Peace Law Firm, ERISA cases are our primary focus, and we are happy to answer all your questions and concerns. Our firm has 15 years of experience in handling ERISA claims.
Prior to negotiations, we will conduct an in-depth investigation into your claim. If necessary, we can take action to file an administrative appeal or prepare for litigation. Contact the Peace Law Firm for a free, confidential assessment of your case.