Workers’ Compensation Insurance Information to Know and Share
As a responsible employer, you want to provide the best work environment for your employees. However, even with the best safety precautions in place, accidents do happen. Fortunately, workers’ compensation insurance helps protect employees and employers in the event of a work-related injury or mishap. In order to maximize the benefits of workers’ compensation insurance as an employer, there are few key points you should know.
How does Workers’ Compensation Insurance Work for Employers?
Workers’ compensation insurance protects employers from paying medical costs or other necessary benefits directly to employees in the event of an accident. It also protects employees and their families from footing the bill for work-related accidents and covers wages if they cannot work. Employers pay into workers’ compensation insurance for each employee on its payroll. Additionally, if an employee becomes ill, injured or dies on the job, benefits are provided to the employee (or the family of an employee) to cover expenses incurred by the work-related accident. Additionally, when workers accept workers’ compensation insurance benefits, the program is designed to ensure that the impacted employee will not sue the company for damages.
What is covered? What are the 5 classifications of workers’ compensation benefits?
The types of accidents covered are dependent upon the workers’ comp insurance policy written for the employer; however, some injuries are not covered. These include repetitious mental trauma, intentional acts, injuries suffered while an employee is committing a crime and/or activities that happen when and if an employee is in violation of written policies. It’s also important to note is that employers can be sued by employees if they have not taken precautions to protect employees at the workplace; or if an employer wrongfully denies a workers’ compensation claim. The 5 types of workers’ compensation benefits include: medical care, temporary disability benefits, permanent disability benefits, supplemental job displacement benefits and death benefits.
What are the Employer Obligations for Workers’ Compensation Insurance?
Every business with employees needs workers’ compensation insurance; however, the requirements vary by state. In some states, employers with one employee must carry a workers’ comp insurance policy. In other states, employers with three or more employees must carry a policy. Texas is the only state that does not require businesses to carry workers’ compensation insurance. Put simply, your obligations as an employer are to communicate the policy to employees, provide a process for filing a claim, share a list of approved healthcare facilities or providers, handle the employee’s claim in good faith, and cover the benefits that are owed. Again, please remember that requirements vary in every state, which range from displaying posters about the process, ensure claims are handled in a certain amount of hours, provide reasonable accommodations and more. Check the laws in your state and with your workers’ compensation insurance provider to ensure you are meeting the requirements in your workplace.
How do Employers Purchase Workers’ Compensation Insurance?
The way that employers purchase workers’ compensation insurance also varies by the state. Some states are eligible to purchase private insurance, while others can purchase through a competitive state fund while others MUST purchase through a monopolistic state fund. There are three sources from which an employer can purchase workers’ compensation insurance (and an infinite amount of insurance carriers).
Private Insurance Carriers
Many employers prefer to work with private insurance carriers so that they can consolidate insurance programs, gain efficiencies and better manage renewals. States that have the option to purchase insurance independent of state funds include: California, Delaware, Indiana, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Pennsylvania, and Wisconsin.
Competitive State Funds
In some states, companies have the option to purchase workers’ compensation directly from the state. This is helpful if your business operates in a high-risk industry has trouble sourcing affordable insurance from private carriers. States with competitive funds for workers’ compensation insurance include Arizona, California, Colorado, Hawaii, Idaho, Kentucky, Louisiana, Maine, Maryland, Minnesota, Missouri, Montana, New Mexico, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, Texas, and Utah.
Monopolistic State Funds
Four states do not allow businesses to purchase workers’ compensation insurance from private carriers. In these states with monopolistic state funds, Ohio, Wyoming, Washington, and North Dakota, employers must purchase their coverage from the state. It’s important to note here that workers’ compensation rates also vary by state, but premiums are based on the number of employees. If your premium is based on a previous year’s payroll amount, you could be paying too much or too little. Pay-as-you-go workers’ compensation insurance often proves to be a helpful solution for employers by calculating accurate premium payments in real time based on payroll numbers. Learn more about pay-as-you-go workers’ compensation insurance from Paycor.
How can I communicate information about workers’ compensation to my employees?
Communication about your workers’ comp policy is critical, and in some states required by law. Every employee should understand what is covered and know the process for filing a claim. This can be communicated with a poster, a training or an excerpt in an employee handbook.
How Can Paycor Help with Workers’ Compensation Insurance?
The most important thing for employers to know is that workers’ compensation insurance is not optional. The purpose of workers’ compensation is to protect you and your employees in the event of a work-related accident. Having information about your procedures on file that can be included in your handbook will ensure everyone knows what to do when and if something happens. Paycor is empowering leaders by providing the most efficient workers’ compensation pay-as-you-go purchasing option for eligible employers. To learn more about Paycor Workers’ Compensation insurance, contact a sales representative now