Disability insurance and workers’ compensation both concern illness or injury in the context of work. These terms are sometimes (erroneously) used interchangeably, but in actuality they refer to very different concepts. Disability insurance provides benefits to an eligible claimant whose ability to work is compromised by injury or illness. The cause of the injury or illness need not be related directly or indirectly to the work setting. In contrast, workers’ compensation is designed to provide financial relief to an employee who is injured or becomes ill as a direct result of work-related factors. Thus, the key issue in disability evaluations is functional capacity, while the key issue in workers’ compensation evaluations is causality.
When assessing disability or workers’ compensation claimants, it is critical for the evaluator to use a variety of data sources. Psychological and/or neuropsychological tests are usually considered an integral component of the evaluation, and test selection should be determined by the specific referral questions and the nature of the claimed impairment. Owing to the possibility of secondary gain on the part of the claimant, all disability and workers’ compensation evaluations should include an assessment of symptom validity to rule out exaggeration or other forms of dissimulation. Conclusions expressed by the evaluator should focus on the specific referral questions, and statements regarding ultimate issue determinations should be avoided.
Disability, used in the context of disability claims, is a legal rather than a psychological or medical term. Its definition is determined by the terms of the policy, contract, or entitlement program under which the claimant has applied for benefits. Sources of disability benefits include private disability insurance policies, public and private sector employee benefits, and federal entitlement programs (Social Security Disability). Each of these sources of benefits is subject to different federal, state, and local laws. For example, Social Security Disability and private sector employee benefits are regulated by federal law (the Social Security Act and the Employee Retirement Income Security Act of 1974, ERISA). Private disability policies are usually governed by the laws of the state in which the policyholder resides. State and local government employee benefits are exempt from ERISA regulation and are defined by state statutes, local ordinances, and (when applicable) collective-bargaining agreements.