Small business owners in most states are legally obligated to have workers’ compensation insurance to cover medical care, rehabilitation and wage replacement costs for employees who get injured or sick on the job. However, we often hear from business owners who have questions about their coverage options and how workers’ compensation insurance works.
While specific rules vary from state to state, here are general answers to five of the most common questions business owners have about workers’ compensation insurance.
1. If I hire independent contractors, are they covered by my workers’ compensation insurance?
Workers’ compensation laws in your operating jurisdiction(s) may exempt businesses from providing workers’ compensation for independent contractors. In most states it is also against the law to misclassify employees as independent contractors with the intent to avoid certain payroll taxes or to avoid paying a higher insurance premium. It is recommended that business owners secure certificates of workers’ compensation insurance from each independent contractor insurance agent and verify coverage. Business owners who rely on an independent workforce should consult legal counsel if they are unsure of how to classify their workers.
2. If an employee is injured on the job, can I choose their medical provider?
This varies from state to state. It is important to check with your agent or insurance carrier to determine the specific laws that apply to your business – if possible, before a work-related injury or illness occurs. For example, in some states an injured worker must be seen by a doctor chosen by the employer or the employer’s workers’ compensation insurance carrier. Other states allow injured employees to select any doctor within a network. Admission to the network could be determined by the state, the employer, or the employer’s insurance company.
3. Does workers’ compensation insurance cover medical consultations, or just treatment?
Usually both. Obtaining immediate and appropriate medical attention following an on-the-job injury is critically important for the injured employee. It is also important to immediately report the injury to your workers’ compensation insurance carrier so that they can quickly determine the best course of action for helping the injured employee. This may often include an initial medical consultation. To help quickly identify the correct course of action and facilitate the claim reporting process, some carriers provide 24-hour nurse triage hotlines. For example, EMPLOYERS offers an Injured Employee Hotline staffed by registered nurses specially trained to take a first report of illness or injury and provide medical guidance over the phone.
4. Can I terminate an employee for filing a workers’ compensation claim?
No. An employee cannot be terminated in retaliation for filing a claim.
5. Does workers’ compensation insurance cover injuries and illness that occur outside of the job site?
Workers’ compensation insurance covers injuries and illnesses sustained during the course of performing any required job duties. Certain scenarios may warrant special examination to determine eligibility. Check with your insurance agent or carrier to learn about specific rules in your state and any special exceptions that might apply to your business.
Understanding all of the important distinctions related to workers’ compensation coverage and compliance within your state will help protect your business and keep your employees safe. If you are unsure about laws or regulations related to obtaining workers’ compensation insurance coverage, it is best to consult your insurance agent who can help provide specific recommendations for your business.
1 Florete, Orlando. “Establishment of Maximum Medical Improvement in Injured Workers: Perception, Truth and Fallacy.” Workers’ Compensation Institute. http://www.wci360.com/news/article/establishment-of-maximum-medical-improvement-in-injured-workers-perception