Employers should spell out which AI tools may be used in workers’ compensation workflows, what each tool is allowed to do, and when a qualified person must check its output. A workable policy also needs safeguards for claim and medical information, testing for accuracy and unfair bias, documented vendor and model changes, and clear ways to question or correct consequential outputs. There is no single federal checklist that covers every employer or claims arrangement, so the policy should be reviewed against the employer’s state law and role in the claim process.
Define the systems and workflows the policy covers
“AI” should not be limited to a single product label. Inventory tools that use artificial intelligence, automated decision-making, analytics, or generative AI, including tools supplied by a claims administrator or another vendor. Include systems used to process or adjudicate claims as well as tools used by HR, risk, safety, and IT teams when they handle claim-related information or influence work decisions.
For each tool, identify its purpose, users, data inputs, vendor, and the claim workflow where it is used. State which uses are approved and which are prohibited. For example, unless specifically approved under the employer’s privacy and security controls, workers should not enter identifiable claim or medical details into public AI services.
Set different rules for assistance and claim-affecting outputs
A tool that helps organize information does not carry the same risk as one whose output can influence a worker’s benefits or job. Label each use by its role, then set review requirements to match the possible impact.
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| Use category | Examples | Policy controls |
|---|---|---|
| Administrative assistance | Sorting documents, routing a file, or drafting a routine summary. | Limit access to authorized users; verify records for completeness and accuracy before relying on them; do not treat a generated summary as the claim file itself. |
| Recommendation or decision support | Flagging information for review or suggesting a next step in claim handling. | Require a qualified reviewer to validate material outputs, record the reviewer’s action, and escalate disputed or uncertain results. |
| Output that may affect a worker | Information used in decisions about eligibility, benefits, medical review, work restrictions, accommodation, or return-to-work status. | Do not allow an automated output to determine the outcome on its own. Require an accountable human decision-maker to examine relevant evidence, document the reasons for the action, and provide a route to challenge or correct material errors. |
Specify that reviewers have authority and time to reject or override an output. A nominal human check is not a meaningful safeguard if staff are expected to accept the system’s recommendation without examining its basis.
Protect claim and medical information
Set limits on what information a system may receive, who can access it, how long it is retained, and how it may be transferred, stored, or deleted. Use role-based access and data minimization, and require secure handling, incident reporting, and a process for access or correction requests. Keep claim-related medical information separate from ordinary personnel records where applicable under ADA requirements.
HIPAA should be addressed precisely rather than treated as a blanket rule for all employer claim data. HHS explains that the HIPAA Privacy Rule generally does not apply to employers, workers’ compensation insurers, or administrative agencies unless an entity is otherwise a covered entity. A covered health care provider may disclose protected health information for workers’ compensation purposes as authorized by state or other law, subject to applicable limits. The HHS minimum-necessary FAQ says the scope of a workers’ compensation disclosure may extend to the full extent authorized by that law; exceptions also apply to disclosures required by law or made with an individual’s authorization. Employers should establish the legal basis for each use or disclosure under relevant state law and any applicable HIPAA obligations.
Keep medical inquiries within lawful bounds
EEOC guidance on the ADA and workers’ compensation says an occupational injury does not automatically establish an ADA disability. Questions or examinations related to a work injury should be limited to the specific injury and its effect on the worker’s ability to perform essential job functions or on workers’ compensation eligibility; a claim should not become a reason to seek unrelated medical information.
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The EEOC’s workers’ compensation guidance was issued in 1996, before the ADA Amendments Act of 2008. It remains relevant agency guidance on the interaction between workers’ compensation and the ADA, but employers should check current law when applying it. The policy should prohibit AI from inferring unrelated health conditions or expanding medical inquiries beyond their lawful scope.
Test for disability impacts, unfair bias, and accessibility
Before deployment and periodically afterward, assess whether a system produces inaccurate or unfairly different outcomes for workers, including workers with disabilities. Document the method, findings, limitations, and any corrective steps. Revisit the assessment when the system, data, vendor, or workflow changes.
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EEOC and Department of Justice materials issued in May 2022 warn that algorithmic employment tools can screen out people with disabilities, fail to accommodate them, or involve disability-related inquiries or medical examinations. Those materials address employment tools broadly, not workers’ compensation claim systems specifically, but they support safeguards when a claim tool also touches employee information or workplace decisions. Provide an accessible way to request reasonable accommodation and a non-automated route where needed. Workers should also be able to question or correct material information that feeds an output affecting them.
Document validation, monitoring, and change control
Keep records that let the employer understand what was approved, how it performed, and what happened when it produced a questionable result. At minimum, document:
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- Intended purpose, permitted workflow, data sources, and known limitations.
- System and model version, validation approach, performance thresholds, and findings on accuracy and bias.
- Reviewer actions, material incidents, complaints or corrections, and remediation.
- Changes to the model, vendor, input data, or workflow, along with the review and approval that followed.
Assign an owner with authority to approve use, require further review, or suspend a system. Establish triggers for reassessment and suspension when accuracy, privacy, security, or fairness concerns become material. Train claims, HR, risk, and IT personnel on the policy and on escalation responsibilities.
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Contracts and operating procedures should require vendors and system administrators to protect data, explain relevant system functions and limitations, support audits and validation, disclose material changes, and cooperate with incident response. Define restrictions on vendor reuse of claim information, including use for model training. Identify who can authorize a change or a new use, and ensure the employer retains a clear internal owner for decisions made with vendor tools.
Review the policy for the employer’s state and role
Workers’ compensation requirements vary by state, and a rule directed at an insurer or other regulated entity may not apply to every employer in the same way. Review the policy for the employer’s claims-administration arrangement and the laws relevant to its role, including workers’ compensation, insurance unfair-claims and unfair-discrimination rules, privacy and security, ADA duties, and recordkeeping.
For example, the Texas Department of Insurance’s Commissioner’s Bulletin B-0003-26, dated June 12, 2026, addresses Texas-regulated entities, agents, and representatives, including third parties working with regulated entities. It says decisions or actions affecting consumers that are made or supported by AI must comply with applicable insurance laws and describes governance expectations for development, acquisition, and use. TDI may request information and documentation during an investigation or examination. This is Texas insurance guidance with a defined regulated-entity scope, not a universal employer rule.
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Quick Recap
Put the policy into operation
- Inventory current and proposed tools. Include vendor systems and generative AI services used in any workflow involving claims or worker information.
- Classify each use. Record whether it is administrative, recommendatory, or capable of affecting a claim or workplace outcome, and specify approved inputs and users.
- Complete legal, privacy, security, and fairness review. Confirm the employer’s role and applicable state requirements; assess data handling, accessibility, and potential error or bias before use.
- Approve controls and train staff. Name the accountable owner, define human review and escalation steps, establish vendor obligations, and train everyone who uses or oversees the system.
- Monitor and reapprove material changes. Review incidents and performance, reassess after system or workflow changes, and suspend use when a material concern cannot be controlled.
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