Must the employer pay medical costs that the work injury fund refuses to cover?

In practice, where an employee is injured in an accident that is determined to be a work-related injury, views differ on whether the employer must pay the medical costs that fall outside the work injury reimbursement schedules.

The first view is that the costs should be shared between the employee and the employer, or shared as agreed. Jilin, Xiamen and other regions take this view, providing that the costs are shared by agreement between the employer and the injured employee. Jilin Province and Wuxi City in Jiangsu expressly provide that the two sides bear 50 per cent each (see Note 1).

The second view is that the employer should in principle not bear the costs unless it agrees to or the parties provide for it. Parts of Shanghai, Zhejiang, parts of Guangzhou, Chongqing and other regions take this view (see Note 2).

The third view is that where the costs were necessary and reasonable for treatment, the employer should bear them even if they exceed the schedules, unless the employer can prove that the excess was unrelated to the treatment of the employee's injury or represented an aggravation of the loss. Parts of Shanghai, Hubei, Hunan, parts of Guangzhou, Shanxi, Guangxi, Shandong, Jiangxi, Jiangyin in Jiangsu, the Beijing No. 3 Intermediate People's Court and Wuhu in Anhui have decided cases on this basis (see Note 3).

The fourth view is that the employer should not, or should not as a rule, bear the costs, as held in Shanghai, Fujian, Shenzhen and elsewhere (see Note 4). In the discussion recorded in the Excerpts of Discussion Views of the Shanghai High People's Court on Difficult Issues in the Application of Labor Dispute Law (1 January 2025), on the question "where the work injury insurance fund does not reimburse part of the medical costs and the employee claims them from the employer, how should this be handled?", the majority view was that the employer should not bear them. Under Article 30(1) and (3) of the Work-Related Injury Insurance Regulations, an employee undergoing treatment for a work-related injury or an occupational disease enjoys work injury medical benefits, and the costs of treatment that accord with the schedules of diagnosis and treatment items, medicines and inpatient service standards are paid from the work injury insurance fund. Accordingly, where the employer has paid work injury insurance contributions for the employee in accordance with the law, the medical costs of treating the injury should be paid from the fund. No current law or regulation provides that costs above what the fund pays should be borne by the employer. Under the present work injury insurance system, those costs should therefore not be borne by the employer. Moreover, under the Work-Related Injury Insurance Regulations, an injured employee may claim a lump-sum work injury medical subsidy when the employment contract is terminated or ends, which makes up the shortfall already incurred and covers possible future treatment, so the employee's position is adequately protected.

The fifth view is that the employer should bear the costs, as held in Chaoyang in Beijing, Xi'an, Hebei and elsewhere (see Note 5). Although the law does not state expressly who bears medical costs outside the schedules of diagnosis and treatment items, that does not mean that an employer that has paid work injury insurance contributions is entirely released from liability for the injured employee's medical costs.

Minton's suggestion: judicial practice differs between regions, so where an employee asks the employer to reimburse medical costs outside the work injury schedules, the employer should first establish the local rules and then act correctly. On the summary set out here, most regions take the third view, under which the employer that cannot prove the treatment was unrelated to the injury must bear the excess, while this Municipality currently applies the fourth view, under which the employer should not bear it.

This article is for reference only and does not represent an official view.

Note 1:

1. Article 33 of the Measures of Jilin Province for the Implementation of the Work-Related Injury Insurance Regulations provides:

Medical costs incurred in treating an employee from the time of the accident until the injury is determined to be work-related shall be advanced by the employer. Once the injury is determined, the work injury insurance agency reimburses costs that accord with the schedules of diagnosis and treatment items, medicines and inpatient service standards. Where the medical costs of treating a work-related injury fall outside the scope of the work injury insurance fund, the employer and the injured employee shall each bear 50 per cent.

2. The Opinions of the Wuxi Municipal Government on the Implementation of the Work-Related Injury Insurance Regulations of the State Council and the Measures of Jiangsu Province for the Implementation of the Work-Related Injury Insurance Regulations (Xi Zheng Fa [2005] No. 356):

9. Work injury insurance benefits. (1) An employee who suffers a work-related injury shall be treated as required and the local work injury insurance agency shall be notified in writing or by telephone within three days. Where treatment at a medical institution outside the area is needed, the institution that has signed a service agreement shall give its opinion and report it for approval to the work injury agency of the pooling area. In an emergency the employee may be treated first and the transfer formalities completed afterwards. Where the costs of treatment exceed the schedules of diagnosis and treatment items, medicines and inpatient service standards and are necessary to save the life of an injured employee in a critical condition, the work injury insurance fund and the employer shall each pay 50 per cent.

3. Article 9 of the Measures of Xiamen Municipality for the Administration of Work Injury Insurance Benefits provides:

A contracted medical institution treating an injured employee shall provide medical services strictly in accordance with the schedules of diagnosis and treatment items, medicines and inpatient service standards set out in Article 30 of the Regulations (the three schedules). Where treatment of a work-related injury genuinely requires medicines or treatment items outside the three schedules, the institution shall notify the employer and the injured employee in writing and obtain their consent; the costs shall be shared by the employer and the employee as agreed, and the work injury insurance fund will not pay them.

Note 2:

1. The Answers (II) of the First Civil Division of the Zhejiang High People's Court and the Zhejiang Labor and Personnel Dispute Arbitration Institute on Several Issues in the Trial of Labor Dispute Cases (Zhe Gao Fa Min [2014] No. 7):

16. Where the employer has paid work injury insurance contributions for the employee in accordance with the law, who bears the medical costs of the work-related injury that exceed the scope of the fund's reimbursement schedules?

Answer: where the employer has paid work injury insurance contributions in accordance with the law, the employer should in principle not bear medical costs exceeding the scope of the schedules, unless the employer agrees to or approves the excess.

2. The Minutes of the Guangzhou Intermediate People's Court on the Trial of Labor Dispute Cases (26 May 2014).

10. Once an injured employee has terminated the employment relationship and ended the work injury insurance relationship, a claim for continued treatment, for costs of a recurrence and similar expenses will in principle not be supported, unless the employer and the injured employee have agreed otherwise, in which case the agreement governs. Medical costs of a work-related injury beyond the scope of the fund are in principle not paid by the employer or the fund; where the employer and the employee have agreed otherwise, the agreement governs.

3. The Policy Questions and Answers of the Shanghai Municipal Human Resources and Social Security Bureau (14 May 2014).

3. How are medical costs outside the "three work injury insurance schedules" to be handled?

Where a designated medical institution uses treatment outside the scope of the national and municipal three work injury insurance schedules for an injured employee, with the signed consent of the employer, the injured person or the family, the cost is borne by the employer or the injured person.

Where the institution uses such treatment without that signed consent, the cost is borne by the designated medical institution.

Where an injured employee genuinely needs treatment outside the national and municipal work injury medicine schedules in order to be saved, the designated institution shall issue a certificate bearing its official seal, which shall be submitted to the social insurance agency for approval, and the work injury insurance fund shall pay.

4. The Wulong District People's Court of Chongqing held that the defendant Wulong company had taken out work injury insurance for the claimant, so the medical costs should be paid by the fund in accordance with the rules. As to the part not reimbursed, there was no evidence that approval had been sought as required, nor any evidence that the defendant had agreed to the costs or was at fault for the failure to seek approval. Its objection to the fund's refusal to reimburse was not a matter for decision in this case. The claim for those costs was therefore not adequately evidenced or legally founded and was not supported. Source: (2021) Yu 0156 Min Chu No. 1721.

Note 3:

1. Sichuan Province issued the Minutes of the Meeting on Several Issues in the Trial of Labor and Personnel Dispute Cases (I) (March 2025) (Chuan Lao Ren Zhong Wei Han [2025] No. 1). Point 5 provides that where the costs of treating a work-related injury exceed the schedules of diagnosis and treatment items, medicines and inpatient service standards, and the employee proves that the excess was necessary for treatment and that no alternative treatment was available, the claim that the employer pay the excess shall be supported.

2. The adjudication committee of the Shanghai No. 1 Intermediate People's Court stated in its Approach to and Key Points in Adjudicating Work Injury Insurance Benefit Disputes (August 2020): medical costs that accord with the schedules of diagnosis and treatment items, medicines and inpatient service standards are paid from the work injury insurance fund, while unnecessary or unreasonable costs outside the schedules are borne by the employee.

3. Shanghai No. 2 Intermediate People's Court: the main issue in this case was whether Lunlun Company should bear the medical costs incurred by Ms Yang in treating her work-related injury that exceeded the schedules of diagnosis and treatment items, medicines and inpatient service standards. The work injury insurance system exists to ensure that employees injured at work or suffering from occupational diseases receive medical treatment and economic compensation, to promote prevention and occupational rehabilitation and to spread the employer's work injury risk. The range of medicines is restricted in order to control treatment costs. In the course of treatment, however, the methods, standards and range of medication adopted by a medical institution in the light of the patient's condition and its development, using medical knowledge and scientific methods, cannot be foreseen or controlled. Although the disputed costs here were outside the fund's reimbursement scope, they formed only a small part of the total cost of treating Ms Yang's injury. Lunlun Company had advanced part of the costs and should have understood how the treatment proceeded; it did not sign consent to the measures but raised no objection, and there was no evidence that the costs clearly exceeded the limits of medical necessity, so as employer it should still bear the medical costs arising from the work-related injury. The first instance had been right to hold that Ms Yang need not repay the disputed costs to Lunlun Company. Source: (2020) Hu 02 Min Zhong No. 1994.

4. The Lengshuijiang City People's Court of Hunan held that, under Article 30(3) of the Work-Related Injury Insurance Regulations, costs of treating a work-related injury that accord with the schedules of diagnosis and treatment items, medicines and inpatient service standards are paid from the work injury insurance fund. Although the Regulations do not state expressly who bears costs that do not accord with the schedules, the primary purpose of the system is to treat and compensate injured employees promptly, and its legislative purpose shows that it spreads the employer's work injury risk rather than exempting it. The defendant had not proved that the costs outside the schedules were unrelated to the treatment of the claimant's injury or aggravated the loss; the claimant was injured at work, and the defendant should compensate the medical costs. The defendant did not dispute that the RMB 58,198.05 claimed had been spent treating this injury, so it was ordered to pay that sum; the excess was not supported. Source: (2025) Xiang 1381 Min Chu No. 34.

5. The Ezhou Intermediate People's Court of Hubei held that Article 30(3) of the Work-Related Injury Insurance Regulations provides that costs of treating a work-related injury that accord with the schedules of diagnosis and treatment items, medicines and inpatient service standards are paid from the work injury insurance fund, and that those schedules are set by the social insurance administrative department of the State Council together with the health and food and drug departments. Although the Regulations do not state expressly who bears costs that do not accord with the schedules, an employer is not entirely released from liability for an injured employee's medical costs merely because it has paid work injury insurance contributions: unless the employer proves that the excess was unrelated to the treatment of the employee's injury or aggravated the loss, it must bear the costs beyond the fund's reimbursement. Here the food company had not shown that the RMB 17,500.25 of non-insurance costs had not been used to treat the burns suffered by Mr Zhang, so its claim for repayment was without legal basis and was not supported. Source: (2025) E 07 Min Zhong No. 399.

6. The Jiangyin City People's Court of Jiangsu held that, given the legislative purpose and the principles of attribution of the work injury insurance system, unless the employer proves that costs outside the schedules were unrelated to the treatment of the employee's injury or aggravated the loss, the employer must bear the costs beyond the reimbursement schedules. Source: (2020) Su 0281 Min Chu No. 11964.

7. The Panyu District People's Court of Guangzhou, Guangdong, held that Mr Shen had suffered harm in the course of his work without fault, and that all the treatment he received followed medical advice and was necessary and reasonable, so even costs beyond the reimbursement schedules should be borne by the employer. Source: (2022) Yue 0113 Min Chu No. 8993.

8. The Changzhi Intermediate People's Court of Shanxi held that the claimant, Liushenyu Company, had not proved that the costs outside the schedules were unrelated to the treatment of the defendant Mr Huo's injury or aggravated the loss. The RMB 46,370.55 of unreimbursed medical costs advanced by the company for Mr Huo arose from the work-related injury and should be borne by the company; its claim for repayment from Mr Huo was not supported. Source: (2023) Jin 04 Min Zhong No. 201.

9. The Laibin Intermediate People's Court of the Guangxi Zhuang Autonomous Region held that, as to the claimant's argument that the category C and self-paid medicines used in the defendant Ms Lan's inpatient treatment fell outside the scope of work injury benefits, the claimant had not proved that the costs outside the schedules were unrelated to the injury or aggravated the loss, so the claimant must still pay them. Source: (2022) Gui 13 Min Zhong No. 944.

10. The Longkou City People's Court of Shandong held that the defendant had no control over what medicines were used after the injury, and that the medical institution's choice of medication according to the defendant's condition did not depend on the defendant's will; the claimant had also failed to prove the amount of the costs beyond the scope of work injury insurance payment, so the claim was not supported. Source: (2022) Lu 0681 Min Chu No. 1082.

11. The Longgang District People's Court of Huludao, Liaoning, held that, given the legislative purpose and the principles of attribution of the work injury insurance system, unless the employer proves that the costs outside the schedules were unrelated to the treatment of the employee's injury or aggravated the loss, the employer should bear the costs beyond the reimbursement schedules; the RMB 47,995.13 spent by the claimant Mr Wang on treating his work-related injury should therefore be borne by the defendant. Source: (2021) Liao 1403 Min Chu No. 1118.

12. The Yushan County People's Court of Jiangxi held that the Work-Related Injury Insurance Regulations were made to ensure that employees injured at work or suffering from occupational diseases receive medical treatment and economic compensation, to promote prevention and occupational rehabilitation and to spread the employer's work injury risk. An employer pays work injury insurance contributions in order to spread, not to be exempted from, that risk. Unless the employer proves that the costs outside the schedules were unrelated to the treatment of the employee's injury or aggravated the loss, it must bear the costs beyond the fund's reimbursement. The claimant's request that the defendant pay the unreimbursed RMB 50,229.75 was lawful and was supported. Source: (2021) Gan 1123 Min Chu No. 2046.

13. The Beijing No. 3 Intermediate People's Court held that, as to work injury losses beyond the scope of the fund's payment, the Beijing branch of Zhai XX had not proved that the medical costs outside the schedules were unrelated to the treatment of Mr Bo's injury or aggravated the loss; Mr Bo was injured in the course of his duties, and the company should compensate the medical costs. The amount calculated by the first instance on the facts was not inappropriate and was confirmed. Source: (2020) Jing 03 Min Zhong No. 12585.

14. The Wuhu Economic and Technological Development Zone People's Court of Anhui held that the work injury insurance settlement statement, the patient cost summary and the inpatient receipts corroborated one another, and that the excess costs had indeed arisen in treating the work-related injury; the defendant had not proved that they were unrelated to the treatment or aggravated the loss, so the claim for the unreimbursed balance of RMB 1,892.32 was supported. Source: (2020) Wan 0291 Min Chu No. 1979.

Note 4:

1. The Reply of the Fujian Labor Dispute Arbitration Commission on Issues Concerning the Hearing of Work Injury Cases in Nanping (1 March 2007):

The Commission considers that, of the medical costs of treating a work-related injury, costs exceeding the schedules of diagnosis and treatment items, medicines and inpatient service standards shall be paid by the injured employee, whether treatment is at an institution contracted under an agreement or at an institution the employee arranges to attend.

2. The Notice of the Shenzhen Labor and Personnel Dispute Arbitration Commission on Issuing the Minutes of the 2016 Seminar on Difficult Issues in Social Insurance Disputes (Shen Lao Ren Zhong Wei [2016] No. 7):

3. Where the employer has paid work injury insurance for the employee, a claim that the employer make up the difference between the medical costs actually incurred and the sum paid by the social insurance department shall not be supported, unless otherwise provided by law or regulation.

3. Shanghai No. 1 Intermediate People's Court: under Article 6 of the Measures of Shanghai Municipality for the Administration of Medical Treatment for Work-Related Injuries and Settlement of Medical Costs, where an injured employee genuinely needs treatment outside the national and municipal work injury medicine schedules in order to be saved, the designated institution shall issue a certificate bearing its official seal, submit it to the municipal social insurance administration centre for approval, and the work injury insurance fund shall pay. In this case Mr Qin's claim against Fuxin Shili Company for medical costs outside the schedules had no legal basis and could not be supported. From the judgment of April 2020 in (2020) Hu 01 Min Zhong No. 1653.

Note 5:

1. The Chaoyang District People's Court of Beijing held that medical costs outside the scope of the work injury insurance fund should be borne by the employer on a no-fault basis. Two settlement statements for medical costs claimed manually by the employer showed that the fund had refused to pay RMB 43,604.76; Mr Wang's claim that the Beijing car sales and service company should bear that sum had a factual and legal basis and was supported. Source: (2024) Jing 0105 Min Chu No. 11573.

2. The Lintong District People's Court of Xi'an held that the claimant argued that, where an employee is injured at work, medical costs beyond the schedules should be borne by the employer. The claimant had shown that the treatment and the costs were directly connected with the work-related injury, and the costs were actually incurred in inpatient treatment; an employee who suffers a work injury should not bear the cost of treating it and is entitled to compensation, so the defendant's argument failed. The claim for the remaining RMB 6,838 of medical costs outside the first round of work injury reimbursement was supported. Source: (2024) Shan 0115 Min Chu No. 8174.

3. The Chengde Intermediate People's Court of Hebei held that Article 30(3) of the Regulations provides that costs of treating a work-related injury that accord with the schedules of diagnosis and treatment items, medicines and inpatient service standards are paid from the work injury insurance fund. Although the Regulations do not state expressly who bears costs that do not accord with the schedules, an employer is not entirely released from liability for an injured employee's medical costs merely because it has paid work injury insurance contributions, so Chengde Yingke Fine Chemical Co., Ltd. must still bear RMB 30,561.61 of medical costs that the work injury insurance agency could not settle. Source: (2021) Ji 08 Min Zhong No. 3646.