Diana Schmidt May 24, 2022 10 min read

Worlds Colliding: The Relationship Between Employee Benefits and Workers’ Compensation

When it comes to managing a company’s total cost of risk, there are some key areas that overlap and impact the cost of both the Employee Benefits and Workers’ Compensation programs. Oftentimes these two insurance programs are analyzed and managed independently of each other. However, identifying and effectively managing crossover topics like comorbidities, opioids, and mental health can drive down long-term costs for both programs.

Let’s look at comorbidities, or chronic conditions. A few of the top chronic conditions that impact both workers’ compensation and health claims are:

  • Obesity
  • Hypertension
  • Smoking
  • Diabetes
  • Cholesterol


The existence of chronic conditions can wreak havoc on both the cost of your medical claims and workers’ compensation claims. As the number of comorbidities increases, the impact on the plans continues to skyrocket. The cost difference between an individual with one comorbidity and five comorbidities could be up to 15x more to your medical plan. The impact of comorbidities on the cost of workers’ compensation claims is just as staggering. A study by Travelers Insurance revealed that 50% of all workers have at least one chronic health condition and the cost of treating this injured worker was double the cost of treating the same injured worker without a chronic condition.1 The study further revealed that 25% of employees have more than one chronic health condition which can increase the cost of treatment by 5x.2 The key to controlling costs related to chronic conditions is first identifying if you have a problem, as well as the root cause of the problem. Potential solution: Implement wellness programs that include disease management and lifestyle management. These programs help employees cope with chronic conditions and focus on preventing illness by encouraging healthy behaviors such as eating better, exercising, and quitting smoking.


Now let’s look at opioids. The opioid crisis continues to be a public health emergency in the U.S., with 128 Americans dying from opioid-related overdoses every day.3 The costs associated with chronic pain and opioid addiction are taking an increasing financial toll on businesses. Medical costs associated with pain care and economic costs related to disability days, lost wages, and decreased productivity cost an estimated $560 to $635 billion each year.4 Blending health and safety programs to address personal and occupational activities can enhance overall worker well-being and prevent work-related injuries and illnesses. Developing post-injury management strategies that take a positive approach to employee injuries can be impactful when managing the costs of medical and workers' compensation claims.


The last crossover topic is mental health. Mental health continues to be a growing concern in the workplace. Depression has grown in all three categories (Employee/Spouse/Children) with the most significant growth being among dependents. Once members have a diagnosis, they will always retain that diagnosis. It’s important to determine if employees or their dependents are continuing their care. There has also been a significant increase in mental health Teledoc visits during COVID-19, so identifying the problem and providing the right resources can lead to a more engaged and mentally healthy workforce. An employee’s mental health can also impact workers’ compensation claims. Keeping employees engaged and focused on their environment is critical to keeping all employees safe and preventing injuries from occurring.


Proactively managing crossover areas like comorbidities, opioids and mental health can positively impact the cost of your employee benefits and workers’ compensation programs. Understanding how these areas impact your employee population and strategizing on resources and programs such as disease management, return-to-work, or employee assistance programs (EAP), can assist in mitigating these exposures and reduce your total cost of risk. These programs can also help foster an engaged, healthy, and productive workforce.



  1. Travelers: Helping Employers Manage a Safer Workforce
  2. Travelers: Helping Employers Manage a Safer Workforce
  3. National Institute on Drug Abuse, Opioid Overdose Crisis
  4. The economic costs of pain in the United States




Diana Schmidt

Property & Casualty Consultant | Principal - Diana joined the Hausmann Group team in 2017 with over 15 years of property and casualty underwriting and claim experience. She spent a decade of her insurance career as a multi-line underwriting officer at Travelers, where she created guaranteed cost and loss-sensitive casualty programs for large manufacturing and technology accounts. In this role, Diana excelled at building trusting relationships, designing robust coverage programs and collaborating with risk control and claim partners to offer strong service platforms which helped clients control their total cost of risk. Diana thrives on being a true advocate and problem-solver for her clients. Balancing her underwriting expertise and service-focused approach with the best-in-class service offerings of Hausmann Group brings tremendous value to her clients. Diana holds a Master of Science in Insurance Management from Boston University as well as a bachelor’s degree from the University of Wisconsin-Madison in Sociology & Legal Studies. She is a designated Chartered Property Casualty Underwriter (CPCU) and has Underwriting (AU), Claims (AIC) & Reinsurance (ARe) associations. Diana is a life-long learner and is currently completing coursework for Associate Captive Insurance (ACI), Alternative Risk, through the International Center for Insurance Captive Education (ICCIE). Diana enjoys experiencing life with her husband and twin boys and can often be found running, biking or swimming. She served on the 2019 Board of Directors for the Greater Milwaukee Chartered Property Casualty Underwriter (CPCU) Chapter and is a Destination Imagination team coach. She volunteers her time on the Parish & Finance Council at her church and helps reduce childhood hunger by supporting the Blessings in a Backpack Waukesha County Chapter.