Now that the Americans with Disabilities Act (ADA) is in force for most businesses in the United States, questions concerning its relationship with the workers compensation (WC) system have arisen. For example, does the ADA affect the provisions or the coverage found in the workers compensation and employers liability insurance policy?

The first point to make about the ADA and workers compensation is that neither entity mentions the other; the second point is that, regardless of this mutual snub, there is a connection between the two. This connection, however, is based more on the effect that the ADA has on the WC system rather than on the WC policy. In fact, to better understand the impact of the ADA on workers compensation, the WC system has to be, at least theoretically, looked upon as a separate creature from the WC policy.

The current workers compensation system is the cumulative result of decades-long confrontation and compromise between employers and employees; an employee injured on the job relinquishes his or her right to sue the employer in return for a statutorily imposed system that provides specific scheduled benefits. The WC system is designed to assure the injured worker that he or she will receive certain benefits due to the injury (such as cash payments and rehabilitation services) and to assure the employer that he or she will not face time and money consuming lawsuits based on the injury to the worker. Now, the ADA comes along and modifies that system.

The ADA certainly does not abolish the workers compensation system and certainly does not dictate the amount of benefits scheduled to be paid to an injured worker; there is no such direct assault. There is, however, a more subtle, a more indirect effect that the ADA has on the WC system.

To be sure, the injured worker still is entitled to the state-mandated workers compensation benefits. However, the injured worker, under the ADA, may now be considered a "qualified individual with a disability". And it is in this area that the ADA can modify the workers compensation system. Now, the employer can be sued by an injured worker, not directly because of the injury, but because, as a "qualified individual with a disability", the employee can seek accommodations to allow him or her to return to work. If the employer unreasonably refuses to accommodate the injured worker, the ADA would allow a discrimination lawsuit by the employee against the employer. Thus, the employee may end up getting the proverbial "two bites of the apple" - workers compensation benefits and monetary damages based on discrimination, both awards basically arising out of the same injury.

This is not an absolute pronouncement since ADA claims will be decided on a case-by-case basis; however, it has to be noted that the exclusive remedy of the WC system does not act as an automatic and absolute bar to a lawsuit or claim made by an injured employee against the employer.

The ADA also affects the workers compensation system indirectly by having individuals with disabilities at the workplace. For example, if an individual with a disability is working at ABC manufacturing company, the chances of that individual being injured on the job (or causing other employees to be injured) may be higher than if that same person did not have a disability. Therefore, the employer, by complying with the ADA, may be increasing the number and the severity of the workers compensation claims due to the increased chances of an employee (with a disability or not) being injured while at work. This increase in the number and the severity of workers compensation claims has to have an impact on the WC system, whether that impact is in the form of higher WC rates or decreasing ability to buy WC insurance.

If the ADA has an indirect impact on the workers compensation system, its impact on the actual workers compensation policy is just about nil.

Look at the standard workers compensation policy. The policy makes the promise to "pay promptly when due the benefits required of you by the workers compensation law". The workers compensation law is the law of each state named on the information page of the policy. The coverage under the policy applies to bodily injury by accident that occurs during the policy period and to bodily injury by disease that is caused by or aggravated by the conditions of employment. The other paragraphs of the workers compensation part of the policy discuss the duty to defend against WC claims or suits, supplementary payments, other insurance and statutory provisions. The point is that nothing in the policy conflicts with the ADA, nothing enhances the ADA, and nothing even mentions the ADA. If an employee is injured on the job, the WC policy will pay the benefits required by state law, regardless of the existence of the Americans with Disabilities Act.

As noted above, the WC policy may have to pay out more benefits because an employee with a disability may be injured more often, but the ADA itself does not include or exclude the benefits prescribed by a state's workers compensation law and covered by the WC policy. Even if the state law required accommodations in order to get the employee back to work and the WC policy paid for these accommodations, it is the state workers compensation law requiring such payment and not the ADA.

There is another part, of course, to the WC policy, namely, employer's liability insurance. This insurance applies to bodily injury by accident or by disease arising out of and in the course of the injured employee's employment; it applies to all sums the employer legally must pay as damages (where permitted by law and as described in the policy) because of bodily injury to the employee.

The ADA is not mentioned in the employers liability insurance part of the WC policy and it is not relevant to that part. It is not relevant for, at least, two reasons. One, employers liability insurance is based on legal liability for bodily injury suffered by on-the-job employees; the ADA bases any claims for recovery on discrimination and violation of a civil right. Two, employers liability coverage is specifically excluded for damages arising out of demotion, reassignment, harassment, humiliation, discrimination against or termination of any employee, or any personnel practices, policies, acts, or omissions - all items that could be encompassed by a claim under the ADA.

So, regardless of which coverage part of the WC policy is examined, the ADA has no immediate impact. There is no need to be concerned about the ADA superseding - expanding or contracting - the scope of the workers compensation policy.

There are several differences between the ADA and workers compensation that can be noted. Among these differences are the following.

First, many work-related injuries covered by workers compensation are minor and only temporarily disabling; the WC payments are meant to cover the medical expenses associated with the injury and get the injured employee back to work as soon as possible. The ADA applies to employees who have substantial, permanent disabilities. A "disability" is defined in the ADA, and the 2008 amendment of the ADA did not alter the definition, only clarified it. Note that a temporary or slight disability would not make an employee a "qualified individual with a disability" under the provisions of the ADA since the disability has to substantially limit one or more of the major life activities of the individual. So, permanent and total disability due to a work-related injury can be handled as a WC payment, but, temporary and slight disability due to a work-related injury will not be handled under the ADA.

Second, the purpose of the WC system is to help employees who suffer job-related bodily injuries; the ADA's purpose is to protect individuals (employees as well as potential employees) from discrimination based on disability.

Third, workers compensation applies to injuries arising out of or in the course of employment; the ADA can apply even if the disabling injury did not arise out of employment. The employee has to be on the job for his or her company if workers compensation is to pay for any injury. Under the ADA, the individual not only does not have to be injured on the job, he or she (as implied above) does not even have to be employed by the company in order for the ADA to come into play since the ADA is meant to prohibit discrimination against not only disabled employees but also disabled job applicants. In short, workers compensation protects employees injured on the job; the ADA protects employees and non-employees and the phrase "arising out of and in the course of employment" is not relevant.

Fourth, workers compensation applies to bodily injury while the ADA encompasses bodily or mental impairment. It is true that some courts today consider mental anguish to be bodily injury, but that is not the majority rule. As an example, a mental or psychological disorder, such as emotional or mental illness or a specific learning disability, can qualify an individual as disabled, and thus, protected under the ADA. That same mental disorder, however, is not considered bodily injury as covered by workers compensation; purely non-physical or emotional harm or disorder (unaccompanied by a physical injury) is not bodily injury and not covered under workers compensation in most states.

Fifth, workers compensation claims are usually handled by the state workers compensation fund (monopolistic states) or the workers compensation insurer; the ADA is administered by the Equal Employment Opportunity Commission (EEOC). Incidentally, for a brochure on EEOC guidelines on the ADA, call 1-800-669-3362.

These differences are not necessarily all-inclusive, but are offered to distinguish the scope and intent between the Americans with Disabilities Act and workers compensation.

The ADA does have an impact on workers compensation, but that impact is mainly of an indirect nature. The WC policy itself - with its insuring agreements, exclusions, and conditions - is not modified by the ADA and those employers who are insured under the standard workers compensation policy will not find the coverage impaired by the ADA.

FC&S


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