Michigan Residential Builders License Practice Test

What system provides wage replacement and medical benefits for workers injured on the job?

1. Health Insurance

2. Disability Insurance

3. Worker's Compensation

4. Unemployment Insurance

The correct answer is: Worker's Compensation

Worker's compensation is a program designed specifically to provide wage replacement and medical benefits to employees who suffer injuries or illnesses as a result of their job. The fundamental premise of worker's compensation is to offer financial support and medical care to injured workers without requiring them to prove fault or negligence on the part of the employer. This system operates under a no-fault principle, meaning that even if an employee's injury was their own fault, they can still receive benefits. Typically, worker's compensation includes coverage for hospital and medical expenses related to the injury, lost wages while an employee is unable to work, rehabilitation costs, and in cases of long-term disability, ongoing support. The comprehensive nature of worker's compensation makes it an essential aspect of workplace safety and employee welfare. Health insurance, while it can cover medical costs, does not specifically address wage replacement due to job-related injuries. Disability insurance is a broader category that may cover various medical conditions, not solely those arising from workplace injuries. Unemployment insurance provides benefits to workers who lose their jobs through no fault of their own, but it does not provide coverage for injuries sustained while working. Thus, worker's compensation is the most appropriate answer in this context.