You know how important it is to have workers’ compensation insurance if you run a business. More often than not, you legally have to have this kind of insurance. But workers’ compensation is one of the hardest types of business insurance to understand and follow the rules for. Each state has its own rules about workers’ compensation insurance. Such as whether or not a business needs it and how much the payment should be. However, one thing that all states require is that insurance companies must do a workers’ compensation audit to make sure that companies are paying the right amount for their benefits.
What Exactly Is The Audit?
When you buy workers’ comp insurance, you usually have to give an estimate of how much your employees will be paid and what kinds of work they will do during the policy time. Along with other things, your estimate is used by your insurance company to figure out how much your workers’ comp insurance will cost.
You usually make estimates for one year’s worth of payroll. But sometimes those don’t match up with your actual payroll by the end of the year. There may be more work than expected during the year, or unplanned events may cause your verified payroll to be less than what was planned. Because of this, most state regulators need an audit every year so that the premium can be adjusted as needed so you’re never paying too much or not enough for your coverage.
During the audit your insurance company will check that the expected payroll and other records you supplied at the start of the policy match the confirmed payroll and work done during the policy period. If the records aren’t consistent your premium will change. If you overestimated then your policy will be cheaper and vice versa. There’s a few things you should know about the audit:
Audits are mandated by law
The word audit sometimes has a jarring reaction because we’re used to hearing it in a negative light around tax time. However, with workers’ comp you aren’t being audited because they think you’re committing fraud. They are checking to see if the payroll and class codes listed at the start of your insurance policy match the ones listed at the end, and they also want to know if any substitutes you hired had their own insurance. It’s just fact finding to not only make sure you’re paying what you should but also makes sure the insurance company isn’t charging you too much.
Types of Audits
There are three types of audits your company can go through depending on the size, the industry, and the auditor themselves.
Preliminary Audit – When you first apply for workers’ compensation insurance, your insurer may do a preliminary audit of your business to figure out your initial rate.
Mail Audit – The mail audit is when your insurance company gives you a workers’ comp audit form in the mail. It is also called a voluntary audit. You just need to fill out the workers’ comp audit form and send it back to the insurance company along with any other paperwork they ask for. If you run a small business, this is probably how your workers’ comp audit will go.
Phone Audit – This type of workers’ comp audit still requires you to send in payroll information and fill out some forms. The only change is that someone from the insurance company will call you to go over your paperwork. Medium-sized businesses are most often given the phone audit.
Physical Audit – A physical workers’ comp audit usually only happens if your business is very big or is thought to be committing major fraud. When your insurance company does a physical audit, they will send someone to your business to talk, look at your payroll records, and possibly ask for more paperwork. If you need a physical workers’ comp audit, you might want to hire a workers’ comp audit attorney to make sure you follow all the rules of the audit and don’t put your business at too much risk of being sued.
Pay-As-You-Go Workers’ Comp
“Pay as you go” workers’ comp insurance is not a new idea, but small businesses are using it a lot more now that workers’ comp prices are going up. A business typically pays a premium for normal workers’ comp insurance based on how much they expect their payroll for the upcoming year to be. Pay-as-you-go uses real-time payroll to figure out workers’ comp premiums month by month instead of an estimated yearly payroll amount. This means that premium payments are more accurate. This makes it less likely that you’ll pay too much during the year or have to pay more at the end of the insurance term because you didn’t report enough payroll.
How To Prepare
Once your insurer has contacted you and set up when and how your audit will take place it’s time to prepare for the appointment.
1.Work With The Auditor
Talk to your insurance auditor and be polite and friendly when you answer questions or give them information. Also, remember to be clear, and honest. Look over any workers’ compensation audit worksheets they make, and don’t sign off on any that aren’t finished or correct. This will keep the inspector and you from having to fill in the blanks over and over again. For your own notes, you should also make a copy of the final workers’ comp audit worksheet.
2.Collect Your Records
The cost of workers’ compensation insurance depends on your payroll, risk, and claims history. The auditor needs to know about all of these things. Most of the time, audit notices list the papers that the auditor can use to check the information. This list may be different for each insurance company, but most of them will want some or all of these things:
Company operation description
Employee job descriptions
Number of employees
Owners names and titles
Description of any contractor or subcontractor work
Accounting ledger
Federal 1099, W-2, and W-3 transmittals
Federal Profit and Loss From Business Schedule C (Form 1040)
Payroll register
Federal Employer’s Quarterly Tax Return (Form 941)
Business checkbook
Federal Employer’s Annual Tax Return (Form 944)
Federal Employer’s Annual Unemployment (FUTA) Tax Return (Form 940)
State unemployment insurance tax reports
Time cards
Overtime records
Any payments made to independent or subcontractors and laborers
Receipts for materials
Subcontractors’ insurance certificates (if any subcontractors were hired)
Business experience modification worksheet
Payroll
Payroll, which is also called remuneration, is where your workers’ comp premium starts, so when you’re getting ready for an audit, you want to make sure that number is correct. Each state has its own meaning of “remuneration,” but in general, it includes:
Gross wages and salaries
Commissions
Bonuses
Overtime, holiday, vacation, and sick day payments
Employee contributions to 401ks, savings plans, or IRAs
Any lodging or meals provided to employees
Payment or allowances for employee tools
Alternatively, payments that aren’t normally considered salary when workers’ comp premiums are calculated may be included in an employee’s paycheck. Many states, for instance, don’t include:
Tips and gratuities
Employer payments to group insurance
Severance pay
Reimbursed business expenses
Special rewards for individual invention or discovery
Active military duty pay
Uniform allowances
Employee discounts on goods and services
In most cases, business owners don’t need to be covered by workers’ compensation insurance, so their pay isn’t looked at during a workers’ comp audit. Nevertheless, some states let sole proprietors, corporate officials, partners, and members of limited liability companies (LLCs) choose to get coverage. As a result, their pay is handled differently because it is usually a lot higher than regular workers’ pay.
The state generally sets an annual wage for sole proprietors or partners that is different from their normal salary. The rate the state sets is what goes into the workers’ comp audit paperwork. For example, corporate officers who choose to participate in workers’ compensation get a weekly salary that is between the state’s maximum and minimum wages. This depends on the workers’ compensation rules in the member’s state.
3. Update Job Descriptions
The dangers your employees face at work are also taken into account when figuring out your workers’ compensation costs. This is done so that the auditor can look into everyone’s tasks and how your business runs in general. This could mean going over the job titles you already have or filling out a form that lists what each employee does. You should know a lot about what the people who work for you do, no matter what. Job titles should be kept up to date, or they should be made from scratch if they aren’t already.
You might want to skip this step, but in the event of a workers’ comp check, having clear job descriptions can be very helpful. Your inspector can figure out the right governing class code for your business with the help of accurate job descriptions. There is a base rate for that class code that is used to help calculate your premium.
4. Review The Audit
Once the audit is over, look over the auditor’s work to make sure it matches what you know about the payroll and processes of your business. After looking over the auditor’s work, sign any papers they ask for to show you’ve done your part and understand the results. If you did the audit over the phone or mail, you might not be able to do this step, but your insurance company should send you a summary of what the inspector found. You can ask your insurance company for more details if those results don’t make sense.
Working With EZ
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Workers’ compensation insurance can help pay for medical care for workers who get sick or hurt on the job. But what happens if a person gets hurt on the job and dies because of it? If an employee passes away due to a work injury or illness, workers’ compensation provides death benefits that may offer financial support for their family. If you own a small business, you need to know about workers’ compensation death payments and what they mean for your business. Especially because each state has its own rules and laws about death benefits.
Workers’ compensation insurance pays death benefits to a worker’s family if he or she dies from an illness or injury that happened at work. Who can get death benefits depends on their link to the person who died. And how much they depended on them financially. Eligible family members can get weekly death benefits of no more than 75% of the employee’s average weekly wage. This amount can’t be more than the average weekly pay for the state.
The amount of the weekly benefit for survivors who are only partly dependent on the deceased person will depend on how much money each dependent got from the person who died. Survivors can get benefits for up to 500 weeks, no matter how much they need them. Alabama also lets the worker’s family get a lump sum payment for funeral and other costs if the worker died within four years of the accident. The size of this one-time payment is based on the average weekly wage in the state.
In Alaska, families are eligible for a death benefit of $10,000 to cover funeral costs and $5,000 for the employee’s surviving partner and/or children. Workers’ comp also gives weekly payments to your employee’s family after he or she dies on the job. The total amount of the benefit must be the same as the employee’s total handicap rate.
Dependents are people like children, widows, and widowers who need help. Children who weren’t biologically connected to your employee but were supported by them or lived in their home are also considered dependents. Children who are in high school or in their first four years of a trade, professional, or college program are eligible for benefits until they turn 19. So are all dependent children who are not married. If there is no widow, widower, or children, payments may be made to the worker’s parents, grandchildren. Or other relatives who depended on them.
According to Arizona state law, if an employee dies because of an accident or illness at work. The employee’s family can get up to $5,000 for funeral costs and death benefits. If there is a living spouse but no children, the spouse will get 66.23% of the average monthly wage of the person who died. The payments will keep coming to the remaining spouse until they die or get married again. If they get married again, they will get two years’ worth of payouts all at once.
If there are kids and a living spouse, the surviving spouse will get 35% of the average monthly wage of the person who died. As mentioned above, they will get this until they die or get remarried. The children will also get 31.2 percent of the dead parent’s salary, which will be split evenly between them.
In Arkansas, family members who depend financially on a worker who dies because of an illness or injury at work can get death benefits from workers’ compensation. If there are no full dependents left, partial dependents may get benefits. Dependents or partial dependents can be spouses, children, parents, siblings, grandparents, and grandkids. In Arkansas, workers’ compensation pays out payments equal to 67% of the worker’s average weekly wage. Up to a certain amount per year. The money will be split between the people who depend on the person who died.
Death benefits are a big part of workers’ compensation payments in California. If an employee dies because of an illness or accident they got at work, your workers’ compensation insurance will pay up to $10,000 for their funeral. And give death benefits to their surviving family members. Death benefits will be paid at the total temporary disability rate until the youngest dependent child turns 18. Dependents who are disabled will be paid for life. How much your employee gets in death benefits depends on how many people count on him or her:
A single dependent: Up to $250,000
Two or more dependents: Up to $290,000
Three or more dependents: up to $320,000
One total dependent. Plus one or more partial dependents: $250,000 plus four times annual support for partial dependents (up to $290,000)
One or more partial dependents: Up to $250,000 in annual support.
In Colorado, workers’ compensation death benefits may be given to the surviving family members of a person who died at work because of an injury. Dependents include:
A spouse who was living with your employee at the time of their death.
Children under the age of 18, or under the age of 21 if they are full-time students.
Parents, adult children, or grandchildren may qualify as partial dependents if there is no spouse or dependent children. In that case, the family member must demonstrate financial dependency on the deceased worker.
For their families to be qualified for death benefits, your employee must have died from an illness or injury that was caused by their job. If the death was caused by something unrelated, the family may be able to get unpaid permanent disability payments. In Colorado, workers’ compensation death benefits are usually about two-thirds of your employee’s average weekly wages, up to a law limit that changes every year. This is the total amount given to all of the people who rely on you.
A spouse gets death benefits for as long as they live or until they get remarried. At which point their share is split between the people who are still depending on them. Children can get benefits until they turn 18 or until they turn 21 if they are full-time students. Partial dependents can get benefits for up to six years. If a worker under 21 dies from an illness or injury at work, their parents will get a lump sum of $15,000 instead of weekly benefits. The workers’ compensation insurance company would also pay up to $7,000 for the funeral costs of your worker who died on the job.
Connecticut workers’ compensation law says that their dependents are eligible up to $4,000 to pay for funeral costs. The surviving partner of the employee who died can get death benefits until and unless they remarry. They will also get benefits for their minor dependent children who are still alive. If the children do not live with the remaining spouse or are not that spouse’s children. The death benefit will be split evenly among the dependents. The benefit will be given to the minor child’s remaining parent or guardian.
In Delaware, a worker’s compensation claim can be made by anyone who was financially dependent on the person who died. If the employee was the only one taking care of the dependent, the death benefit will be two-thirds of their normal pay. If the worker who died did not pay for all of the dependent’s needs, the weekly death benefit will be less. For example, if a worker who died provided 60% of their family’s income and their partner provided the other 40%, the weekly death benefit would be 60% of the worker’s weekly pay before the injury or illness. All qualified dependents would get this benefit.
Depending on the circumstances, survivors can get death payments for at least five years and up to twelve years. Benefits may last longer if a child was disabled before the worker died, is still in school (up to age 18). Or is involved full-time in an accredited post-secondary program (up to age 23). When the beneficiary is not a surviving husband or child, benefits are limited to a fixed dollar amount that is changed every year. Delaware workers’ estates can also get $7,000 to help pay for funeral costs. This is paid whether or not the person left behind a spouse or children.
In Florida, a worker’s family may be able to get death benefits if the worker dies from a work-related injury within one year of the accident or within five years of being disabled continuously. Most of the time, workers’ compensation will pay up to $150,000 to the person’s relatives (up to 66.67% of the person’s weekly wage). And pay up to $7,500 for the funeral.
Georgia law says that anyone who depends on the worker for money is eligible for benefits. The partner and children of a deceased worker are usually considered dependents, but there are a few requirements:
The surviving spouse must be legally married to the deceased. If the couple lived apart for 90 days prior to the date of injury or death, the claim may be denied. But only if it can be proved that the surviving spouse was not dependent. Common-law partners may also be ineligible.
Children under the age of 18 are considered dependents. As are stepchildren, legally adopted children, and children born posthumously to the deceased. Children over the age of 18 who are unable to work due to a physical or mental disability. As well as children under the age of 22 who are full-time students, are also covered.
Anyone else who can show they were financially dependent on the deceased may be able to file a claim for benefits. For instance, an elderly parent.
The most a surviving partner who has no other dependents can get in death benefits is $150,000. These benefits are paid until the person turns 65 or gets 400 weeks of payments, whichever comes first. If the widowed partner gets remarried or moves in with someone else, they will lose their benefits.
In Hawaii, a cash payment can be given to any family member who was financially dependent on the person who died. The amount given depends on how many people in a family ask for benefits. But the total amount of family benefits can’t be more than two-thirds of the average weekly wage of the worker who got hurt. In Hawaii, workers’ compensation pays for funeral costs as well.
In Idaho, the surviving spouse of a worker who died on the job can get workers’ compensation death payments for 500 weeks. Unless they get married again during that time. Up to three children who need help can also get assistance until they turn 18. Other family members who were financially dependent on the worker who died, such as parents, siblings, grandparents, or grandkids, may also be able to get benefits. If your worker dies within four years of getting hurt or sick, some funeral costs may also be covered.
In Illinois, death benefits from workers’ compensation are paid out every week. A qualified dependent can get up to two-thirds of the deceased person’s average weekly earnings. As long as the amount is between the minimum and highest amounts set by the state each year. When the payments hit $500,000 or 25 years have passed, whichever comes first, the payments will stop. Death payments from workers’ comp also cover funeral costs of up to $8,000.
In Indiana, dependents can get 500 weeks of lost pay at 67% of the average weekly wage of the person who died. All of the dead person’s hospital bills and up to $7,500 in burial costs are also paid for. In Indiana, there are two kinds of dependents: presumed dependents and dependents-in-fact. Death benefits are distributed evenly among presumed dependents, who include:
Spouse (as long as they do not remarry)
Children under 21 who aren’t married and who resided with the employee
Children under 21 who did not reside with the employee, but who the employee was legally obligated to support
Children over the age of 21 who have never been married, are physically or mentally ill, or are caring for the employee’s home but are not otherwise employed
Dependents-in-fact can get benefits even if there are no supposed dependents at the time of the employee’s death. People who are linked by blood or marriage and who relied on the employee who died are among these people.
You are required by Iowa law to pay death benefits through your policy. The amount of these benefits will depend on whether or not the employee’s dependents were fully or partially financially dependent. Children under 18 years old, children with disabilities of any age, and a living spouse are all considered to be fully dependent. Children under 25 who can prove they were the worker’s dependents are also qualified. Dependents who are physically or mentally unable to take care of themselves will also be able to get weekly workers’ compensation payments.
Surviving family members who were fully dependent on the worker who died can get pay equal to 80% of the worker’s average weekly after-tax income. The 80% amount will be split evenly among all full-time kids. And the most anyone can get is the average weekly wage in Iowa. If the employee has no full dependents, only partial dependents will get death payments. Survivors can also get a one-time payment of up to 12 times the average weekly wage of the state to cover funeral costs.
The following rules govern how death benefits are given to the families of Kansas workers who die because of an illness or accident they got at work:
For survivors to get money, they don’t have to be citizens or live in the United States.
Weekly death benefits are based on 67% of the average weekly wage of the worker who died. Up to the highest amount allowed by law.
The minimum death payment is equal to 50% of the state’s average weekly wage.
The total amount of death benefits can’t be more than $300,000. Unless they are going to a child under 18 who needs them.
In Kansas, the boss or their insurance company is responsible for paying all hospital and medical bills related to the death. As well as up to $5,000 in funeral costs.
The surviving legal spouse or children who are fully dependent must get an initial payment of $40,000 from the employer (or their insurer), or the amount must be split evenly between the dependents.
Eligible family members can get weekly death benefits of no more than 75% of the average weekly pay of the worker who died. This amount can’t be more than the average weekly pay for the state. How much a partly dependent survivor gets each week will depend on how much they depended on the deceased for money.
Survivors are eligible for payments for up to 500 weeks, no matter how dependent they are. In Kentucky, if a worker died within four years of getting hurt on the job, his or her family may get a lump-sum payment to help pay for the funeral. The average weekly wage for the state will be used to figure out the lump-sum amount.
The state of Louisiana assumes that the employee’s surviving partner and children depended on him or her and should get benefits because of this. Other family members who lived in the same house as the worker who died and were financially dependent on them may also be able to get death benefits.
Partners who aren’t married can’t get benefits unless they are getting them for children they have together.
The worker’s surviving spouse is eligible for 32.5% of the average weekly wage of the worker who died.
A spouse who has died and one child can get 46.25%.
A spouse who has died and two or more children can get 65%.
If there is no partner, a child who is still alive can get 32.5%. Two children can get 46.25%. And three or more children can get 65%.
If there is no partner and no children. A parent who needs help can get 32.5% and two parents who need help can get 65%.
If there is no spouse, no children, and no parents, a sibling who needs help can get up to 32.5 percent of the benefit, and each new sibling can get up to 65 percent.
Workers’ compensation insurance also pays up to $8,500 for burial and funeral costs.
In Maine, the surviving spouse and dependent children are considered “wholly dependent” when figuring out workers’ compensation payments. That means they are entitled to a share of the worker’s income. Other family members may also count on you in some ways. Benefits will only be given to relatives who are partly dependent if there are no fully dependent family members left. Those who qualify can get weekly death benefits equal to two-thirds of the dead worker’s average weekly pay. This amount can’t be more than the average weekly pay for the state.
The amount of money the person who died gave each dependent will decide how much the survivors will get each week. Survivors can get benefits for up to 500 weeks, whether they are fully or partly dependent. Dependents in Maine can also get up to $4,000 to cover reasonable funeral costs. You will also have to pay $3,000 to the estate of the employee who died to cover miscellaneous costs.
In Maryland, benefits can be given to any family member who depends financially on the person who died. Most of the time, a living dependent is entitled to two-thirds of the worker’s average weekly wage, up to the legal limit. This depends on how much money the person who died brought in for the family. In other words, if the person was responsible for 60% of the family costs, their dependents can get 60% of their average weekly wage. Depending on the circumstances, survivors can get death payments for at least five years and up to twelve years. In Maryland, workers’ compensation pays for acceptable funeral costs of up to $7,000.
Dependent family members of Massachusetts workers who died will get death benefits. The payments are based on the person’s weekly pay before the accident. Surviving partners can get weekly payments equal to 66% of the average weekly wage of the worker who died. But not more than the average weekly wage in the state at the time of death. Once two years have passed since the worker’s death, the partner can get a cost-of-living adjustment every year. If their partner gets remarried, the children will get $60 per week, up to the amount of the spouse’s benefit.
Children in Michigan are considered dependents if they are under 16. Or if they are 16 or older but can’t work because they are sick or too young. Also, for children to get death benefits, they must have been living with the employee or an ex-spouse at the time of death. After taxes, Social Security, and Medicare are taken out, dependents can get 80% of the average weekly wage of the worker. However, the state of Michigan sets a minimum and highest weekly benefit amount for workers’ compensation death benefits each year. Dependent family members who are “wholly” dependent will get the same amount of benefits. If there are no “wholly” dependent family members, partly dependent family members can get benefits.
Dependents can get benefits for up to 500 weeks, or until the youngest claimant is 21 years old, whichever comes first. If the dead worker’s widow or widower remarries, their benefits end. However, their children’s benefits continue until they turn 18 (or 16 if they’ve been able to support themselves for six months). In Michigan, workers’ compensation pays for up to $6,000 in funeral costs.
If an employee dies because of an illness or accident at work, certain family members may be able to get death benefits. These benefits cover funeral and burial costs. As well as weekly payments that cover a part of the employee’s earnings. The family of the worker who died will get death benefits equal to no more than 67% of the worker’s average weekly wage. Which cannot be more than the highest amount set by law for an entire year. Payments must also be adjusted every year for the cost of living starting 3 years after the worker dies.
In Mississippi, your workers’ compensation insurer or assigned risk administrator will pay death payments to the employee’s dependents at least once every 14 days. After a worker dies on the job, these payments can keep going for up to 450 weeks. Death benefits are based on a percentage of the average weekly wage of the worker who died, up to a weekly limit set by law. Also, you or your insurance company must pay up to $5,000 for the funeral costs. And give the remaining spouse a one-time payment of $1,000.
In Missouri, death benefits include up to $5,000 for funeral and burial costs. And weekly payments that cover a part of the employee’s income. Dependent family members of the worker who died will get death benefits based on the worker’s weekly pay before the accident. This amount, however, can’t be more than 67% of the average weekly wage of the employee who died. Up to the minimum and highest benefit amounts set by the state. The remaining spouse will get benefits until he or she dies or gets married again. If this happens, the partner will get a final lump sum payment equal to two years’ worth of benefit payments.
The Montana Workers’ Compensation Act says that you have to pay death benefits to a worker’s family if he or she dies because of an accident or illness at work. Beneficiaries will get two-thirds of the worker’s weekly wage. The most these benefits can be is the state’s average weekly wage. If the worker dies and doesn’t leave behind any children, their parents or anyone else who can show they were financially dependent on them must get a lump-sum payment of $3,000.
If one of your employees dies at work because of an accident or illness, their family will get death benefits from workers’ compensation. In Nebraska, the employee is financially responsible for the following people:
A surviving spouse
Children younger than 18 who live at home with the employee’s spouse
Children younger than 22 who are enrolled in an accredited higher education program
Adult children who are mentally or physically unable to support themselves. Or who depended on the deceased worker for financial support in the past
The worker’s surviving spouse is eligible for two-thirds of the worker’s previous pay until the spouse remarries.
If an employee dies because of an accident or illness that happened at work, his or her dependents could get death benefits. If the worker who died didn’t have a partner or children, benefits could be given to their parents or younger siblings who depended on them financially, as well as to other family members.
The worker’s partner can get up to a certain amount each year, based on the worker’s average monthly wage. This benefit is for the spouse and children. If the partner is not the parent of the children, the benefit will be split. In that case, half of the income would go to the spouse and the other half would go to the children. Workers’ compensation payments also pay up to $10,000 for funeral costs.
If an employee dies because of an accident or illness at work, their dependents may be able to get death payments from workers’ comp. These perks include funeral costs that don’t go over $10,000 and a weekly payment. If the worker died without a partner or children, benefits could be given to their parents or younger siblings who depended on them for money, as well as to other family members who depended on the worker for money.
In New Jersey, death benefits from workers’ compensation are made up of:
Payment of approved medical bills
Up to $3,500 for burial or funeral expenses
50% of the deceased employee’s wages to one dependent
5% more for each additional dependent, up to a maximum of 70% of the worker’s wages for five or more dependents
Up to 450 weeks of payments to the surviving spouse, up to a maximum amount set each year by the Commission of Labor
Up to 450 weeks of payments to mentally or physically disabled children
Children are thought to be dependents until they turn 18 or until they turn 23 if they are still in school full-time. A kid who needs care and who has a physical or mental disability may get more benefits. If the surviving partner gets remarried, they will no longer be able to get benefits. Unless there are still children who need help. The benefits could then go on for up to two more years. A civil union partner can also get death benefits. Also, the parent(s) and sibling(s) of the person who died who depended on your employee may be able to get compensation if they can show it.
If an employee dies because of an illness or accident at work, workers’ compensation death benefits may be given to their surviving partner and dependent children (or other dependent relatives). Children are thought to be dependents until they turn 18 or until they turn 23 if they are still in school full-time. A kid who needs care and who has a physical or mental disability may get more benefits.
Your employee must have died within 2 years of the date of their injury for their dependents to be qualified for death benefits. The most they can get is the same amount that the employee would have gotten in temporary total disability payments over 700 weeks. In New Mexico, funeral fees are paid for with $7,500 of the workers’ compensation death benefits.
In New York, the main people who count on you are your spouse and your minor children. Unless they get married again, the surviving spouse of your employee will generally get benefits for the rest of their lives. If they do get married again, they will get a lump sum that is the same as two years of payments.
If there are no children, the spouse can get up to the highest amount allowed by law, which is 66.67% of the worker’s average weekly wage. When there are children, the rate stays the same, but the benefits will be split so that the husband gets 36.6% of the weekly rate and the children each get 30%. When a child turns 18 or 23 if they are a full-time student, their benefits stop. If there is no surviving partner or children, benefits can be given to the worker’s parents or the worker’s estate.
As part of workers’ compensation death payments, New York helps pay for funeral costs. How much money is given for funeral costs depends on where in the state the person who died worked for pay. For example, in Bronx, Kings, Nassau, New York, Queens, Richmond, Rockland, and Westchester counties, New York helps pay up to $12,500 for funeral costs.
As long as the spouse lived with the worker at the time of his or her death, they will be qualified for benefits. Minor children are any children under the age of 18 who were dependent on the worker at the time of death. This includes adopted children, stepchildren, and known illegitimate children. It also includes children born after the worker died.
If there are no completely dependent family members, benefits will be given to people who were partly dependent on the worker who died, based on how much help the worker had been giving them. One lump sum can also be given to the next of kin. If there are no close relatives, workers’ compensation insurance will only pay for the funeral costs.
In North Carolina, the weekly death benefit is two-thirds of the average weekly wage of the worker who died. This benefit is paid for at least 500 weeks or until a child who is getting benefits turns 18. Up to $10,000 can be paid for funeral costs. In some situations, North Carolina workers’ compensation death payments can be more flexible than those in other states. This is because the North Carolina Supreme Court set up the “Pickrell presumption,” which says that the children of a worker who died may still be able to get workers’ compensation benefits even if the exact cause of death and the details of the accident are unknown.
Workforce Safety and Insurance in North Dakota will pay for funeral costs of up to $10,000. Also, wives and children will be able to get two-thirds of the average weekly wage of the worker. A one-time payment of $2,500 plus $800 for each dependent child will also be given to the surviving partner. If the worker died without a partner or children who depended on them, the other people who cared about them would get a lump sum of $15,000. Benefits will depend on whether the employee left behind a husband, children, or other survivors.
In Ohio, workers’ compensation death payments can be given to people who were financially dependent on the worker who died. Other family members may also be considered wholly or partly dependent, but this will depend on each individual case. Death benefits will be equal to 66.67% of the worker’s average weekly wage, up to the maximum and minimum amounts set by the state each year. The Bureau of Worker’s Compensation (BWC) will decide how payments will be given to dependents. Most of the time, the partner will get benefits until death or remarriage, and if they remarry, they will get two years’ worth of benefits all at once. A burial allowance of up to $5,500 is also part of the workers’ compensation death payouts.
If one of your employees dies because of an illness or accident they got at work, your workers’ compensation insurer must pay death benefits to the employee’s family. This means paying benefits to the surviving partner and/or other dependents of a worker who has died. Surviving employees who were not financially dependent on the person who died but who lost money because of the death may also be qualified for a lump-sum payment. State laws set up a plan for how to figure out death benefits. Benefits include one-time payments, weekly payments, and money to cover funeral costs.
To get benefits, the survivor must have been financially dependent on the person who died, either in whole or in part. Most of the time, workers’ compensation insurance in Oregon also pays up to $20,000 for funeral and burial costs. Go to the Workers’ Compensation Division’s page on death payments to find out more.
In Pennsylvania, a worker who dies because of an injury at work will usually be able to get death benefits from workers’ compensation. Payments of death benefits can start on the day the worker dies. As part of workers’ compensation death benefits, a $3,000 payment is made for funeral costs.
If an employee dies because of an illness or injury they got at work, their relatives will get death benefits. As part of these benefits, a person can get up to $20,000 to help pay for burial and funeral costs. A weekly benefit will also be given to a surviving partner, any minor children, and any other people who depend on the person who died. This payment will be based on whether or not the worker is married and how many people count on them. But the total benefit can’t be more than what the state’s highest total weekly disability benefit is.
In South Carolina, a worker’s dependents may be able to get death benefits if the worker dies from a work-related accident or illness. Benefits for a death include weekly payments as well as money to pay for the funeral and burial. Surviving family members can usually get two-thirds of the worker’s average weekly wage for 500 weeks from the date of the accident. They can also get up to $2,500 to cover funeral costs. There are some exceptions to this general rule. For example, if the worker who died was getting benefits from workers’ compensation insurance before he or she died. The amount of benefits that the worker’s relatives can get may be cut.
State law in South Dakota says that a worker’s survivors must get death benefits if the worker dies from an illness or injury at work. These perks include money to make up for the worker’s lost income and money to help pay for funeral costs. The worker’s partner will get 67% of the worker’s average weekly wage, which includes overtime pay at the straight rate. If the partner remarries, the payments will stop. But your insurance company will give them a lump sum equal to two years of the worker’s salary.
When the employee leaves behind children who were qualified for income benefits. Those benefits will end two years after the surviving spouse remarries. If children are the only ones left alive, they will get payments equal to 67% of the worker’s average weekly wage until they turn 18 (or 22 if they are in school full-time). Children who can’t work because they are too young or too sick will get money for the rest of their lives.
Your insurance company will pay an extra $50 a month to each of the dead employee’s legally dependent children. Starting the date of death until the child turns 18. Also, your insurance company will have to pay an extra $2,000 per year for up to five years for each child who goes to a recognized post-secondary school full-time. In addition to widow income benefits, funeral costs of up to $10,000 will be paid for each survivor.
If an employee dies because of an accident or illness at work in your state, their dependents will be able to get death benefits. Benefits for replacing lost wages can be different depending on how many dependents your employee has:
If the employee died and had no children, your insurance company will pay $20,000 to the employee’s estate.
If the employee has a surviving partner but no children who depend on them. The insurance company will pay up to 50% of the person’s average weekly wage.
If the worker dies and leaves behind a partner and children who depend on them. The insurance company will pay the spouse two-thirds of the average weekly wage.
In Tennessee, workers’ compensation also pays up to $10,000 for funeral and burial costs.
If a worker with Texas workers’ compensation insurance dies from a work-related illness or accident, the worker’s family will get death benefits. Most of the time, the death benefit will be 75% of the worker’s normal weekly wage. Up to an amount set by the state each year. The money will be given to the employee’s family and loved ones. Workers’ compensation also pays up to $10,000 for funeral costs.
If one of your workers dies because of an injury or accident at work, their family will be able to get death benefits. This includes covering for the cost of a burial or funeral. Under the Utah Workers’ Compensation Act, survivors can get money every week. This amount is based on 67% of the employee’s average gross weekly pay. The exact amount depends on how many children the worker had and if they were still living.
If an employee dies in Vermont because of an illness or injury that was caused by their job, their family will be able to get death benefits. These include up to $10,000 for burial and funeral costs. And up to $5,000 for getting the body to the place where it will be buried. Workers’ compensation insurance will also pay weekly benefits to the person who died. Depending on whether the worker had a partner and/or children, the amount of these benefits can range from 67% to 77% of their previous weekly pay. The base and maximum limits for survivor benefits are the same as for all other Vermont workers’ compensation benefits.
Under Virginia law, a worker’s spouse, children, and other dependents may be able to get death benefits if the worker dies from an illness or injury that was caused by their job. Dependents of a worker may get weekly payments equal to two-thirds of the worker’s average weekly wage. For up to 500 weeks from the date of injury. Up to $10,000 will be paid for funeral costs, and up to $1,000 will be paid for transportation costs.
If a worker dies in Washington because of an injury or illness that happened at work, a survivor who is qualified can get a one-time death benefit payment and a monthly survivor’s pension. The spouse of the worker who died will immediately get death benefits. If the employee’s children are legally dependent on them, they will also be qualified. Workers’ compensation in Washington also pays for funeral costs, up to twice the average monthly wage of the state.
If an employee dies because of an accident or illness that happened at work in West Virginia, his or her dependents may be able to get death benefits. Survivors will get death benefits based on how close they were to the person who died. People who can get benefits are:
The surviving spouse of the worker
Children under the age of 18 (or under age 25 if the child is a full-time student)
Disabled children of any age
If there are no survivors who meet these requirements, the benefits can be given to the worker’s living parents if they are financially dependent on the worker. When there are no living parents, benefits may be given to grandchildren and/or siblings who are dependent. If the person who died didn’t have any dependents, the death benefits will only be used to pay for hospital bills and the funeral. Dependents of the worker who died will be able to get two-thirds of the worker’s average weekly wage at the time of the accident. Dependents will get a share of that benefit, with the amount they get based on the situation. Up to $7,000 may also be paid for funeral costs.
Under Wisconsin law, the surviving spouse, children, and other dependents of a Wisconsin worker who died from a work-related injury or illness may be eligible for a death benefit. This includes weekly payments to those who depended on the worker financially and coverage for burial costs. Death benefits will go to family members who are totally dependent on the person who died. Like a living spouse or registered domestic partner, or surviving children under 18 or who are physically or mentally disabled.
Other partially dependent family members won’t be able to get death benefits unless there are no full dependents. All of the beneficiaries cannot get more than four times the employee’s annual salary in death payments. State law also says that workers’ compensation insurance must cover up to $10,000 in funeral costs.
Workers’ compensation in Wyoming pays death benefits to the family of a worker who dies from an illness or injury that happened at work. Their surviving spouse, minor children, and other dependents could get monthly benefits for up to 100 months. At least 80% of the average monthly wage in the state will be paid as a death benefit. The limit is twice the state’s average monthly wage. Both numbers are based on how much the worker was making before he or she got hurt or sick. Wyoming law also gives people $5,000 for funeral costs and $5,000 for other costs connected to death.
Workers’ Compensation With EZ
We do everything we can to make shopping for workers’ compensation insurance as easy and stress-free as possible. And we give each customer our full attention. After you fill out our form, you’ll get free quotes right away from your dedicated agent. Who will give you personalized service and try to figure out what you need. We want you to make the best choice possible and get the best coverage at the best price. Our services are free, so check out your prices right away. You can call us at 877-670-3538 if you still have questions. You will be put in touch with a local insurance agent who can answer all of your questions. And help you find the best workers’ compensation policy for your business.
Your workers’ compensation premium is calculated with a formula that has 3 primary components. First the type of business you own, second your claims history, and finally, your total payroll. The formula is Payroll (per $100) x Class Code Rate x Experience Modifier (if applicable) + State Taxes & Fees = Premium. The National Council on Compensation Insurance (NCCI), a trade association for the U.S insurance industry, and state agencies such as the Workers’ Compensation Insurance Rating Bureau (WCIRB) collect and analyze data to make sure that insurance companies in every state use the formula consistently and reliably. Below we’ll look at the specifics of each portion of the formula. As well as the full formula to help you understand how your premium will be calculated. We will also look into a few ways to lower your premiums.
1.Business Type
For this portion of the formula your company is put into a hazard group based on the likelihood that an accident will occur in the workplace. A business with a low risk profile, like a professional services firm, will have a different hazard group than a business with a higher risk potential, like a construction company. For each classification, the average cost per injury and death is first calculated. As you can imagine, workplace injuries from a construction site will likely cost more than injuries that could happen in an office setting. It’s very important that your employees are correctly classified, as it has a direct impact on your workers’ compensation premium. Additionally, if you classify your employees incorrectly you can face penalties and your insurer can even refuse to cover claims if they find the employee was put in a lower classification than they should have been.
2.Claims History
The next portion of the workers’ compensation premium formula is based on the amount of workplace accidents your company has had in the past. This is also called your experience modifier. Your company will compare this amount to the average accidents for businesses in your same classification with the same or similar amount of employees. The average modifier rate is set at 1.0 for the scale, the less injuries the lower your modifier rate is, the more injury claims you have the higher the number. During a specified measurement period (typically 1-3 years), if your business experiences less workplace accidents than the average, your premium will most likely be lower than what a similar business with more accidents paid. Having a lower premium is a huge incentive for businesses to do more to prevent workplace injuries.
3. Payroll
The final portion of the formula for workers’ compensation premiums is the total payroll of your business annually. The higher your payroll, the higher your workers’ compensation premium will be. This also means the more workers you have, the more potential for on the job injuries or illness. To make sure your payroll amount is accurate, every business is required to complete a workers’ compensation payroll audit a few months after their policy is renewed. If you don’t complete this audit you will face a penalty for noncompliance, so it is mandatory. If the audit shows that your payroll was actually higher than what you reported, you will have to pay the additional workers’ compensation premium on the correct information.
On the other hand, if you overestimate the amount of your payroll then you will be issued a refund for the overpayment of your premium once the insurance company adjusts the rates. Every state has a different average of how much they can expect per $100 of payroll. To find out more about your state’s rates check out our state by state workers’ compensation guides.
Ways To Lower Your Workers’ Compensation Rates
Now that you know what affects your premium rates, you’re able to calculate and get a rough estimate of what you could be paying. If you know your premium is likely to be more than you’d like, there are ways to start lowering your premiums to make it more affordable, as well as make your company safer not just financially, but physically as well.
Develop A Drug Policy
Certain industries are actually more prone to drug use and alcoholism in the workplace according to the Substance Abuse and Mental Health Services Administration (SAMHSA). For example, the mining industry has the highest rate of alcohol abuse at work sitting at 17.5% and right behind them is the construction industry at 16.5%. Since these industries are already considered high risk based on the type of work they do, it’s very important for these types of businesses to follow drug-free policies because their policies will already be more expensive. For drug use, Food industry workers sit at 19.1% and construction workers are at 14.4 percent.
You have the right as an employer to conduct drug tests on both current and prospective employees. Although, you’ll want to look into your state laws first as some states only allow drug testing once there’s a job offer on the table. However, making sure that your employees are not working under the influence of drugs or alcohol prevents catastrophic accidents. Promoting a drug free workplace can lower your workers’ compensation premiums as well as increase productivity, lower absences, lower employee turnover, and improve morale.
Aside from drug testing there’s a few other things you can do to help promote a drug-free workplace. For one, you can make it a point to educate your employees about the risks of working while impaired. You can also help workers who struggle with substance abuse by offering resources such as helpline numbers and treatment center information to help them seek treatment for their addiction.
Drug Free Policy State Discounts
Not only will a drug free workplace lower your premiums by preventing accidents, but in 13 states there is a discount for workers’ compensation premiums if you implement a drug-free policy within your business. The following 13 states already have discounts for drug-free work policies:
Alabama – 5% discount
Arkansas – 5% discount
Florida – 5% discount
Georgia – 7.5% if the drug-free workplace program is certified by the state Board of Workers’ Compensation.
Hawaii – 5% for safety and health programs
Idaho – Premium reductions for conducting drug and alcohol testing for current and prospective employees.
Kentucky – 5% discount
Mississippi – 5% discount
Ohio – 5 year phased-in premium reduction that can reach up to 20% discount.
New York – Workplace Safety and Loss Prevention Incentive Programs have a 6% discount.
South Carolina – 5% discount
Tennessee – 5% discount
Virginia – 5% discount
Safety Protocols
Creating a safe work environment can boost employee morale and reduce workers’ compensation costs. Establishing a culture of safety is easier than you might think, and you’re probably already doing some of this work.
Ensure that your employees have access to the tools and information necessary for their safety on the job.
If you have not already done so, schedule regular safety inspections.
Utilize daily safety checks to constantly remind employees to exercise caution while at work.
Plan weekly or monthly deep dive inspections.
Putting an emphasis on safety will not only reduce workplace accidents and injuries and lower your workers’ compensation premiums, but it will also demonstrate your concern for their well-being.
Safety Rewards
Check with your insurance provider to see if they will lower your premiums in light of the fact that your company has become safer over the past year. Typically, these types of safety bonuses are distributed after a period of one year in which fewer claims were filed. It is important to check with your insurer to determine whether or not safety rewards are currently being offered, as they are not guaranteed.
Review Employee Classifications
This recommendation may be so simple as to be overlooked. While it is true that each type of business will have a different overall rate, the costs associated with each classification of employee will also vary. For instance, a sheet metal worker will have different standards than a bookkeeper who rarely visits the production floor. Ensure that each employee is correctly classified in their current position according to your policy. This simple tip will save you a substantial amount of money.
Workers’ Compensation Insurance With EZ
The majority of states require businesses to carry workers’ compensation insurance. Which will not only protect your business but also your employees. Keeping your employees safe does not have to be an expensive endeavor for your company. There are numerous ways to promote safety routines and programs. All of which will help you reduce your workers’ compensation expenses. If the best practices for claims management are implemented and followed in a timely manner, your employees will be able to return to work as soon as they receive medical clearance to do so. Not only will production return to normal, but workers’ compensation costs will decrease as well.
Come to EZ for free, instant quotes from one of our licensed agents to help you look for the best workers’ compensation policy. If you already have workers’ compensation benefits but are looking for a better deal, we can assist you. Your EZ agent will be familiar with the local regulations and able to provide guidance as you shop around for the best policy at the most affordable price. Enter your zip code in the box above. Or call us at 877-670-3538 to speak with one of our licensed agents.
Workers’ compensation insurance is designed to protect you and your employees financially in the event of a workplace accident or unjust. Workers’ compensation insurance isn’t just a good idea, depending on your state it may be a legal requirement. When it comes to workers’ comp claims, the majority of them are approved because workers’ compensation is considered “no-fault”. Meaning that employees do not need to prove that their employer was at fault for their injury.
As long as the employee files their claim on time, has witnesses to their accident, and seeks medical treatment for their injury, the employee will receive benefits. There may come a time, however, when one of your employees files a claim that you find questionable. In this case, you do have options, including the option to contest the claim. Below we’ll look at how you can fight a questionable claim. As well as the impact workers’ compensation claims can have on a business.
Reasons To Dispute A Workers’ Comp Claim
You can’t fight a workers’ comp claim for no reason, you and your insurance company must have a legal basis for disputing any claims. Here are some of the reasons you could have for disputing a claim:
Your employee missed the deadline to file a claim
The wrong paperwork was used to file a claim
The injury didn’t happen at your company
Your employee quit before filing a claim
The injury happened while the employee was at work but was not working
The injury was intentional
Always File The Claim
Even if you suspect the workers’ compensation claim is false. You have to file it when the employee comes to you with it. You can be penalized if you fail to report a work-related injury with a full report of all related details as soon as possible. The insurance claim adjuster’s job is to determine whether or not the claim is valid or not. You are paying premiums to your insurance company so that they can handle these matters. If your report is thorough and you work closely with your adjuster, there is a good chance the adjuster will catch the fraudulent claim and deny it anyway. So, delaying or not filing a report because you think it’s invalid could backfire on you, best to just let the adjuster do their job.
Work With The Claims Adjuster
Once you’ve filed the workers’ compensation claim with your insurance company, an adjuster will be assigned to the case. They will contact you and the employee personally, as well as review all documents associated with the case including medical records. The adjuster ultimately decides if the claim will be denied, but at this point you will have more information about the claim than the adjuster. If you have reason to believe the employee lied, or was injured outside of work, now is the time to gather all information that supports why you think it’s invalid. Document, date, and save everything that indicates why you think the claim is fraudulent. Most importantly, inform your adjuster immediately that you believe the claim to be questionable. Indicating in your initial report that you believe there are reasons to deny the claim serves 2 purposes.
First, it lets the adjuster know they may need to file an extension early, since workers’ compensation claims have to be completed in a certain time frame, and disputing a claim will take more time to investigate. Secondly, marking your claim as questionable from the beginning will actually make your adjuster pay closer attention. They will spend more time looking through the paperwork, medical records, and searching for warning signs that otherwise may have been missed. Finding one of these red flags doesn’t necessarily mean anything, as accidents and coincidences do happen. But if an adjuster notices that more than one exists, they will look into it further to make sure if the claim is or isn’t fraudulent.
Warning Signs
A new hire who immediately filed a claim after being hired
An employee who has immediately hired an attorney after the injury
Claims from an employee who may have been “disgruntled”
Employees with poor attendance, poor work records, or financial issues
Injuries with no witnesses, or that happened in an area the employee isn’t assigned to normally work
Injuries that occur late on a Friday or right when they return to work on Monday
Learn Your State’s Procedure
While workers’ comp is mandatory in almost every state, each state has its own laws and procedures for dealing with claims. Including disputing them. You can call your insurance provider and ask about what you need to know about local procedures. So you don’t accidentally make a misstep and cause trouble for yourself or your company.
You have the option to dispute even if the adjuster doesn’t deny the claim after the investigation. In some states, such as Texas, you have to submit a form or attend a hearing to dispute the claim in front of a judge. In other states, such as New York, or Tennessee, you may have to appear before a judicial panel or speak with a state-assigned workers’ compensation arbitrator. However, regardless of the state your company is in, you will most likely have to defend your position orally, in writing, or both. You will also need to provide all of the evidence you gathered when you first filed the claim and informed the adjuster of your concerns. Remember the “document, date, and save all information” part? This is where that step comes in handy.
How Workers’ Comp Claims Affect Businesses
Workers’ compensation claims tend to have a greater impact on smaller businesses. This is because larger companies have deeper pockets and larger payrolls, allowing them to absorb the financial cost with not much issue. Regardless of how big or small your business is though, workers’ comp claims can cause your business issues. Below we’ve detailed how claims can affect you. So, you understand why it’s important to fight fraudulent claims to protect yourself. As well as explain why doing everything you can to avoid workplace accidents is even more important.
Premium Hikes
Your workers’ compensation insurance premiums are determined by your industry, number of employees, payroll, and claims history over the last 3 years. A single claim will not necessarily result in a higher premium. But depending on the nature of the claim and the resulting medical bills and disability benefits even one claim could make a mark on your record. The more often you have workers’ compensation claims the more likely it is that your premiums will increase.
Additionally, your insurer also takes your experience modification rate (EMR) into consideration. Your EMR is how insurance companies compare your claims history to other companies in the same industry. The average EMR is 1.0, the more claims you have the higher above average you are. And then the higher your premiums will be because your company will be considered a higher risk to insure. Regular safety training and following industry-specific safety guidelines can help reduce your premiums.
Administrative Costs
Processing a workers’ compensation claim can take a lot of time. Especially if you’ve signaled that you believe it’s fraudulent. The insurance company will want to examine all relevant evidence, including the employee’s medical records. Effectively giving you or your claims specialist more work to do. Your company may also need to spend a lot of time and money to fix or check any equipment that was involved. As well as repair it if needed. Especially if the machinery involved is found to be defective after the accident. There may also be more paperwork and more hours involved in reporting the incident to state and federal regulators. Particularly if an OSHA violation is suspected. New equipment or training that stems from a regulator’s requirement can take a chunk out of your bottom line.
Legal Action Expenses
If you believe it is false, and you decide to take it to court you could also end up paying. While your attorney will advise you on whether or not you should go to court in the first place. Keep in mind if you lose the case, you will have significantly higher legal fees than you would have if you settled the claim. So, if you are planning on disputing your claim make sure your legal team agrees with the decision. And that you have absolute proof that the claim was fraudulent.
Reputation Damage
Impact on your company’s brand is difficult to predict. Your reputation can be affected by the severity of the accident. Whether it is covered by local news outlets, and whether it spreads on social media. A serious accident, repeated incidents, or OSHA fines could make it difficult to be able to hire new employees or get new customers.
Working With EZ
Workers’ compensation isn’t just about protecting your employees, it’s also about protecting your business. Nobody wants to deny a legitimate claim. But if you encounter one of those rare cases it’s fraudulent, you should know you have rights as well. And remember, EZ.Insure is here to help if you have any questions about workers’ compensation insurance. Or any other commercial insurance for that matter. We will connect you with a highly trained licensed agent. Who will listen to all of your concerns and make sure you get the best policy. To get started, enter your zip code in the box below or call 977-670-3538 to speak with an agent today.
Virtually every employer has to carry workers’ compensation insurance. However, some state laws provide exemptions for particular types of employees and business structures. Only a few worker categories are occasionally exempt. This exemption also applies to certain business owners. However, even when workers’ compensation coverage is not required, it is almost always in the best interest of the employer to provide coverage. If an employee sustains an injury on the job the employer may be held responsible for medical expenses, ongoing therapy, and lost wages.
Additionally, if you as the business owner are injured on the job, a workers; compensation policy can help pay for your medical expenses and compensate you for a portion of your lost wages. Your personal health insurance provider may deny your claim if your injury or illness is work-related, leaving you again responsible for these costs. Below we’ll look at the exemption laws in each state, if you’d like more information on the other workers’ compensation laws in your state, check out our state workers’ compensation guides here.
Any business with 4 employees or less does not have to carry workers’ compensation in Alabama, whether they are full or part time doesn’t matter. Alabama employers do not need to carry workers’ compensation for farm laborers, domestic laborers, or casual laborers including temporary or part-time employees hired for only an hour or a day.
Alaska businesses with one or more employees have to have workers’ compensation coverage unless the Alaska Workers’ Compensation Board has approved the business for self-insurance.
Owners and business executives are exempt if they are:
Sole owners
Partners
LLC owners with at least 10% ownership interest in the company
Executive officer or municipal, religious, or legally registered nonprofit organizations.
Executive officers for for-profit corporations with at least 10% ownership.
As for employees who are exempt from coverage:
Part-time babysitters
Non-commercial house cleaning personnel
People who are hired to help a farm with harvest
Amateur event sports officials
Entertainers under contract
Commercial fishers
Taxi drivers under specific contractual arrangements
Anyone who has benefits through the Alaska temporary assistance program.
Professional hockey players and coaches, as long as they are covered under a health insurance plan.
Some real estate agents
Anyone defined as a transportation network company driver.
There are only 4 exemptions from Arizona’s workers’ compensation. Independent contractors and casual laborers do not need to be covered. As well as any employee who voluntarily chooses to not have workers’ compensation coverage. The only owners who do not have to have coverage are sole owners who have no employees. Beyond that, any business owner with one or more employees needs workers’ compensation coverage.
All employers have to carry workers’ compensation insurance for themselves and their employees. The only exceptions to this are sole owners who opt out of coverage for themselves, or employers who have approval to self-insure.
Connecticut is another state that requires all businesses to carry workers’ compensation insurance with very few exceptions. The only employees that don’t need coverage are domestic workers who work less than 26 hours a week. Sole owners, corporate officers, and partners are allowed to opt out of coverage for themselves but they must have coverage for their employees.
Farm laborers and household workers in a private home who earn less than $750 every 3 months do not need workers’ compensation insurance. Other than that every other business owner and employee needs to be covered.
Any employer with one or more full-time, part-time, permanent, or temporary employees has to provide workers’ compensation coverage. Exemptions include:
If you have a single employee, even a part-time worker, you have to purchase workers’ compensation insurance. Only sole owners, partners, corporate officers, and real estate agents are excluded.
All Kansas companies must have workers’ compensation insurance with only a few exceptions. Some agricultural workers do not need to be covered. Sole owners, partners, corporate officers, and independent contractors with no employees do not need workers’ compensation insurance.
Employers who regularly employ one or more employees for 35 or more hours per week for 13 or more weeks in the 52 weeks prior must provide coverage. Exemptions include:
Agricultural workers (fewer than three employees working less than 35 hours per week)
Domestic workers (fewer than three employees working less than 35 hours per week).
All employers must provide coverage. Exemptions include:
Sole proprietors, partners, and officers of corporations
Domestic or household employees whose typical responsibilities include house cleaning and yard work
Casual employment
Only those working for assistance or sustenance
Officials of amateur athletic competition, such as a timer, referee, umpire, or judge.
Real estate, securities, and insurance salespeople paid solely on commission with no minimum earnings guarantee
Direct sellers
Those who deliver single or multiple newspapers and have acknowledged in writing that they have no insurance coverage.
Freelance correspondents who submit articles or photographs for publication are compensated for each submission but have not confirmed coverage in writing.
Barbers and cosmetologists who have contracts with cosmetology salons.
Petroleum land specialists
Licensed jockeys participating in a horse race, from the time the jockey reports to the scale room until the jockey is weighed out after the race.
Licensed trainers, assistant trainers, exercise persons, and pony persons on the premises of a licensed horse race meet.
Non-Montana residents whose primary duties are not performed outside the state. The employer must adhere to the coverage requirements in the location where the employee resides or works.
Officers or managers of a private, non-profit irrigation ditch company, water user cooperative, corporation, or organization.
A minister who is ordained, commissioned, or licensed by a church or religious order.
Individuals who provide companionship services or respite care to incapacitated individuals. The individual providing services or care must be directly employed by a family or legal guardian.
Excluding air search and rescue volunteers, volunteer reserve auxiliary law enforcement, and volunteer firefighters, volunteer workers are defined as:
Professional athletes who compete in contact sports for a team or club
Personnel of freight brokers and forwarders
A musician whose performance is governed by a written contract
Employers with at least one employee have to provide coverage. Exemptions include:
Employment associated with entities engaged in interstate commerce that are not subject to Nevada’s legislative authority
Employment covered by private disability and death benefit plans comprising compensation payments of equal to or greater amounts than those provided in NRS 616 and in effect for at least one year prior to July 1, 1947.
Temporary employees insured in another state who are brought into Nevada if extraterritorial coverage provisions are in effect with the other state.
Casual employment in the construction industry (employment lasting less than 20 days with a total labor cost of less than $500), if the employment is not in the course of the employer’s trade, business, profession, or occupation.
Employers with at least three employees have to provide coverage. Exemptions include Sole proprietors. However, sole proprietors are counted as employees when determining whether a business employs three or more individuals.
All employers must provide coverage. Exemptions include:
Volunteers who provide their services to nonprofit organizations without compensation
Ministers, priests, and rabbis duly ordained, commissioned, or licensed; sextons; Christian Science readers; and sects of religious orders
Customers of supervised amateur athletic activities operated on a nonprofit basis, provided that such s are not otherwise engaged or employed by any person, firm, or corporation participating in such athletic activity Educators in a nonprofit religious, charitable, or educational institution
Individuals employed in a nonmanual capacity by or for a religious, charitable, or educational organization.
Persons receiving charitable aid from a religious or charitable institution who perform work in exchange for such aid, but who are not under an express contract of hire, are considered unpaid volunteers.
People who are covered for specific types of employment under another workers’ compensation system, such as those employed in certain maritime occupations, interstate railroad employees, federal government employees, and others who are covered by federal workers’ compensation laws.
The spouse and minor children of a farmer-employer, provided they are not under an express contract of employment.
Certain foreign government and Native American Nation employees
Provisions of the New York State General Municipal Law that protect New York City police officers, firefighters, and sanitation workers
People, including minors, performing yard work or casual chores in and around a single-family, owner-occupied residence or a noncommercial organization’s property.
Certain real estate salespeople who sign a contract with a broker stating that they are independent contractors are considered independent contractors.
Certain media sales representatives who sign a contract stating they are independent contractors are considered independent contractors.
Certain insurance agents or brokers who sign a contract stating they are independent contractors are considered independent contractors.
Sole proprietors, partners, and certain corporate officers with no additional personnel providing essential business services.
Employers with at least one employee have to provide coverage. Exemptions include:
Sole proprietors, partners, and officers of corporations
Some railroad personnel
Casual employees
Domestic servants employed directly by the household
When less than ten full-time, non-seasonal farm laborers are regularly employed by the same employer, they are considered farm laborers.
employees of the federal government in North Carolina
Those who sell agricultural products for their producers on commission or for other compensation, provided the product is prepared for sale by the producer.
All employers must provide coverage. Exemptions include:
Independent contractors
Some agricultural employees
Certain providers of services administered by the Oklahoma Department of Human Services who are licensed and compensated on a commission-only basis
Any employee of an employer with five or fewer employees who are all related to the employer by blood or marriage. Any employee of a tax-exempt youth sports league.
Sole proprietors, partners, and officers of corporations
Any individual who performs volunteer work and receives no remuneration other than meals, drug or alcohol rehabilitation therapy, transportation, lodging, or reimbursement for incidental expenses is considered a volunteer.
Unlike most other states, South Dakota employers do not legally have to carry workers’ compensation insurance. To avoid civil lawsuits, however, the state encourages employers to have workers’ compensation coverage.
Employers with at least three employees are required to provide coverage. Exemptions include sole owners. However, sole owners are counted as employees when determining whether a business employs three or more individuals.
Employers with at least three employees have to provide coverage. Employers with fewer than three employees who pay wages of at least $500 per calendar quarter must also carry workers’ compensation insurance. Exemptions include some farm laborers.
Employers with three or more workers must provide coverage. Employers with fewer than three workers who pay at least $500 in wages per calendar quarter have to carry workers’ compensation insurance. Exemptions include some farm workers.
Workers’ Compensation Made EZ
Most states require businesses to carry workers’ compensation insurance, which will not only protect your business but also your employees. Keeping your employees safe does not have to be an expensive endeavor for your company. There are numerous ways to promote safety routines and programs, all of which will help you reduce your workers’ compensation costs. If you use the best practices for claims management and follow them in a timely manner, your employees will be able to return to work as soon as they receive medical clearance to do so. Not only will production return to normal, but workers’ compensation costs will get cheaper as well.
Come to EZ for free, instant quotes from one of our agents if you are looking for the best workers’ compensation policy. And if you already have workers’ compensation benefits but are looking for a better deal, we can assist you. Your EZ agent will be familiar with the local laws and able to guide you as you shop around for the best policy at the most affordable price. Enter your zip code in the box above or call us at 877-670-3538 to speak with one of our agents.
You buy workers’ compensation insurance to cover employees in the event of a work-related illness or injury. But not every business owner knows the risks to their business if they opt out of coverage. Or the risk of not having enough coverage to meet your company’s specific needs. Most states have a law that requires workers’ compensation insurance after you have a certain number of employees so not having coverage could be illegal. Leaving your business vulnerable to large claims and possible lawsuits that could leave it bankrupt is the last thing you want to do. Below we’ve made a list of the most common myths about workers’ compensation. And what the facts are so you don’t get misled and make a decision based on some bad advice.
Myth 1: Small Low Risk Businesses Don’t Need Workers’ Compensation
In most states, workers’ compensation insurance is required by law, and many require it as soon as you hire your first employee. It’s important to understand your state’s requirements to avoid compliance issues. Businesses that choose not to carry workers’ compensation insurance despite being required to may be subject to severe penalties and fines. Additionally, injuries can occur even in low-risk industries, so you should be covered no matter how safe your job is. Not to mention, the costs associated with work-related injuries, including medical expenses and lost wages, can build up quickly especially if you don’t have proper coverage. Having a proper workers’ compensation insurance policy in place will protect your business from all angles.
Myth 2: I Only Have A Couple Employees, I Can Pay Out Of Pocket For An Accident
Most states do allow you to self-fund workers’ compensation claims, however it’s not easy to do it. A self-insured workers’ compensation plan is one where you, the employer, assume the financial risk for providing workers’ compensation benefits to your employees. Instead of paying a set monthly premium to an insurance company or state-sponsored workers’ compensation fund, self-insured businesses pay the cost of each claim out-of-pocket as they happen. Since a self insured company assumes this financial risk, it must have the financial resources to meet the obligation.
So for smaller businesses this might not be a viable option. There are even some states who won’t even allow companies to self-insure. And even if your state does allow it you have to apply for the permission to self-insure. Which includes state-specific requirements for example you could have to prove you have a networth of at least $500,000 among other things. Essentially you have to prove you can foot the bill for any and all workers’ compensation costs for every employee that you have.
Myth 3: I Don’t Have Employees, I Use Subcontractors So I Don’t Need Coverage
When you bid on a job your possible client may request proof of workers’ compensation insurance for yourself and any subcontractors who will be working with you. For instance, if you are an electrician and bid on a wiring job for a school, the school will need to know that you and your team all have coverage before they’ll even consider your bid. If you don’t have coverage and you or a crew member are injured on the job, your health insurance can deny coverage because it’s a work related injury. Many health insurance policies will not cover these types of injuries.
At most you can buy yourself a workers’ compensation policy and require any subcontractors you hire to have their own valid policy. Before your team begins working make sure that they have a valid certificate of insurance. If they don’t, and they get injured, you may be held responsible for any injuries which is a huge financial risk.
Myth 4: Seasonal Businesses Don’t Need Coverage
You need the insurance while your business is operating. The majority of insurance companies will write you a seasonal business policy, so long as you clearly define your open and closed period. For example if you have a pool cleaning/maintenance business and only operate between April and October, your insurance company will activate your service in April and pause it in October. That way you are covered while you’re open and don’t have to pay premiums when you’re closed.
Myth 5: I Only Employ My Family Members, I Don’t Need To Cover Them.
In most cases, a family member who works for you is still considered an employee. Like any other employees that are required to be covered. Damages for on-the-job injuries can cost hundreds of thousands of dollars, without a proper policy you risk footing all of that and then some. You leave your business open to punitive damages, as well as lawsuits along with all those medical bills. Just because they’re family does not guarantee they won’t sue you.
Myth 6: My Employees Work From Home They Don’t Need Coverage
You may believe that workers’ compensation does not apply to home-based employees because you cannot control their working conditions. However, that is wrong. You are still obligated to provide a safe workplace for employees. Even if they work from home or a remote location just as you would for an employee who works on site. All employees are entitled to workers’ compensation benefits. Although home-based employees might have a harder time proving that their injuries are work related.
Myth 7: If My Employee Doesn’t File A Claim The Day Of The Injury They Can’t File It Later
There are numerous reasons why an employee may delay filing for workers’ compensation. For example, if your employee slips and falls while moving boxes. The employee might get up and feel a little sore but otherwise fine. But over the next week or so their back becomes increasingly stiff and painful. They go to the doctor and the doctor informs them that they actually have an injury, and it was most likely due to their fall and continuing to move boxes has only made the injury worse. Even though your employee did not immediately report the fall, they are still eligible to file for workers’ compensation. Every state has a statute of limitations for how long your employee has to file a claim. So just because they didn’t file that day doesn’t mean they can’t still claim.
Myth 8: Worker’s Compensation Stops Employees From Suing
This is only half true. Yes, if the employee receives workers’ compensation they cannot sue you for the injury itself. However, there are certain circumstances where they can still file a suit against you. For example if the injury was caused by faulty machinery that didn’t have proper maintenance or safety precautions. The employee could sue you for negligence for not properly maintaining the equipment. Or if you manufacture the piece of equipment that injured your employee they can sue you for product liability.
Myth 9: If The Accident Is The Employee’s Fault They Can’t File A Claim
This is another common misconception about workers’ compensation insurance, but it’s mostly untrue. The misunderstanding likely comes from you confusing workers’ compensation claims with a personal injury lawsuit. It is true that in order to file a personal injury lawsuit, the employee’s injuries had to have been the company’s fault. But that isn’t the case with workers’ compensation. Workers’ compensation is mostly no-fault. Meaning if your employee has a work related injury or illness, they are eligible to file a claim. Regardless of who was at fault. It makes no difference if you believe they should have been paying more attention or could have avoided the accident. The only exceptions to the workers’ compensation no fault rule is if your employee was under the influence of drugs and alcohol at the time of their injury. Or if they intentionally hurt themselves to attempt workers’ compensation fraud.
Myth 10: I Don’t Need An Insurance Agent To Get The Best Policy
This is a difficult myth; a do-it-yourself approach could lead to costly errors. Despite the fact that there are several online tools and carriers that can help you buy a policy. But they can’t help with everything the way an agent can. For example, if you fill your application out and select the wrong classification code for your employees. You will end up owing a massive fine at the end of the year audit. Or your insurance provider could deny you coverage due to the misclassification or other error. We highly recommend consulting with a licensed agent who specializes in workers’ compensation insurance. They will recommend the appropriate coverage and guide you through the process step by step.
Here at EZ, we connect you with your own personal insurance specialist who can quickly compare plans available in your area all while staying within your budget. And they do it all for free! That’s right none of our services cost you anything. Our only goal is to make sure you get the best workers’ compensation coverage, and any other business insurance coverage for that matter. To get started, enter your zip code in the box below or call 977-670-3538 to speak with an agent today.
4. Review The Audit
Even if you suspect the workers’ compensation claim is false. You have to file it when the employee comes to you with it. You can be penalized if you fail to report a work-related injury with a full report of all related details as soon as possible. The insurance claim adjuster’s job is to determine whether or not the claim is valid or not. You are paying premiums to your insurance company so that they can handle these matters. If your report is thorough and you work closely with your adjuster, there is a good chance the adjuster will catch the fraudulent claim and deny it anyway. So, delaying or not filing a report because you think it’s invalid could backfire on you, best to just let the adjuster do their job. 
Dispute The Claim
