How Does Health Insurance Affect Workers’ Compensation Filing?

Darius Noshir Lakdawalla, RAND
Robert T. Reville
Seth A. Seabury

Abstract

Workers’ compensation provides insurance against job-related injuries, but as many as half of injured workers choose not to file.  A common explanation for this is the existence of private health insurance, an alternative source of health care that may discourage insured workers from taking the time to file a workers’ compensation claim.  However, data from the NLSY paint a surprising picture:  uninsured and more vulnerable workers are actually less likely to file claims than the insured.  We study this relationship and find that it emerges as the result of employer characteristics.  In particular, whether or not employers offer health insurance to employees appears most important, much more important even than the insurance status of workers themselves.  Indeed, even repeat injury-sufferers are more likely to file during episodes in which their employer offers health insurance, but not statistically more likely to file during episodes in which they themselves are insured.  This suggests that the workplace environment and employer incentives may have a significant, or perhaps even the dominant, impact on workers’ compensation filing.