Why Does Your Business Need Workers Comp If You Have Health Insurance? | Michigan Workers Comp 101

Why Does Your Business Need Workers Comp If You Have Health Insurance? | Michigan Workers Comp 101

If you’re a Michigan business owner, you may be asking: “Why do I need workers’ compensation insurance if my employees already have health insurance?” At first glance, it can seem like duplicate coverage. But in reality, workers’ comp and health insurance serve very different purposes—and having workers’ comp is not just smart, it’s often required by law.

Workers Comp vs. Health Insurance: What’s the Difference?

Workers Compensation Insurance is designed specifically for injuries and accidents that happen on the job. Whether it’s a slip in the office, a back injury from lifting, or an accident at a job site, workers’ comp covers:

• Medical expenses
• Lost wages
• Rehabilitation services

Health Insurance, on the other hand, covers medical needs outside of work—like doctor visits for illness, routine check-ups, or surgeries unrelated to employment.

Simply put: health insurance takes care of personal health needs, while workers’ comp exists to protect employees and employers when workplace injuries happen.

Michigan Workers Comp Requirements

In Michigan, workers’ comp is not optional once your business reaches a certain size. If you have one or more employees working 35 hours or more per week for 13 weeks or longer, or three or more employees at any time, you are legally required to carry workers’ comp insurance.

Failing to comply can lead to penalties, fines, and lawsuits. Health insurance coverage alone does not fulfill this legal obligation.

No-Fault Protection for Employees

One of the most important features of workers’ comp is that it’s provided on a no-fault basis. This means that even if an employee causes their own accident, workers’ comp still pays out benefits. Health insurance typically excludes coverage for work-related injuries, leaving employees (and employers) exposed if workers’ comp isn’t in place.

How Workers Comp Protects Your Business

Workers comp doesn’t just protect employees—it also protects employers. Without it, a business could be vulnerable to lawsuits for workplace injuries. Workers’ comp policies typically include employer’s liability coverage, which helps cover legal costs if an employee alleges that negligence contributed to their injury.

This makes workers’ comp a financial safety net for your company, in addition to being a compliance requirement.

Final Thoughts

While health insurance is an important benefit for your employees, it does not replace the need for workers’ compensation. Workers’ comp covers workplace injuries, ensures legal compliance in Michigan, and helps protect your business from costly lawsuits.

If you’re unsure whether your business is properly covered, it’s best to review your insurance needs with a trusted agent who understands Michigan workers’ comp requirements.

Need help reviewing your workers’ comp policy in Michigan? Contact us today to make sure your business is protected.