Workers’ compensation insurance is a requirement of the law for any company or business having at least one employee, with certain exceptions depending on the laws of each state, such as for some domestic workers in the state of Connecticut.
Work-related injuries or illnesses can be unexpectedly life-altering if they are severe enough. It is not uncommon for employees to suffer long-term impairments due to sustained injuries on the job. Fortunately, most employers must carry insurance to cover workers’ compensation claims.
Surely you have heard about workers’ compensation insurance, and you probably want to clarify some doubts about this topic. Below, you’ll find everything you need to know about workers’ compensation insurance, what it is, what it covers and what the Connecticut law requires of you as an employer!
What is Worker’s Compensation Insurance?
Workers’ compensation insurance offers employees some benefits if they suffer a work-related injury or illness. This insurance will cover costs associated with medical care to treat the injury or illness, costs for rehabilitation, and lost wages if the employee cannot work because of the injury or illness. It can also provide coverage if an employee develops an infection or disease caused by exposure to conditions in the workplace or at a work site.
As an employer, it is your job to protect the people who work for you. Accidents at work can happen, so you need to create a safe and healthy work environment for your employees. A reliable insurance company can help you choose a workers compensation plan that can meet your employees’ medical expenses in the event of work-related illness or accident and even cover part of the wages lost due to permanent or temporary disability.
Workers’ compensation also benefits you if you are a small business owner. If your injured employee or family sues your company, this insurance can help cover your legal costs.
Your goal is to run your business in the safest way possible. However, workplace accidents can happen no matter what you do, and employees can get sick doing their jobs. When these situations occur, you need the peace of mind that your business is covered.
How Does Workers’ Compensation Insurance Work?
If one of your employees suffers a work-related injury or illness, the insurance companies support you through the entire recovery process.
Injured parties should see a health care professional immediately so the professional can provide medical reports to support any claim. Employees can then begin the nationwide claim filing process; they should be sure to include any documentation or forms required by the state. When these claims are approved, the beneficiary will receive compensation payments and will be able to return to work when they feel ready.
In addition to helping cover their treatment, workers’ compensation insurance also helps pay to train your employees for new roles if they can’t return to old jobs. And if they can’t return to work, workers’ compensation insurance can provide long-term disability benefits.
Workers’ compensation insurance can help protect your employees if they:
- They trip up the stairs to their office,
- Developing carpal tunnel syndrome from poor typing habits,
- They are injured in a car accident while visiting a client, etc.
- Workers’ compensation insurance typically includes:
- Medical Provider Network: Your employees have access to providers experienced in treating workplace injuries.
- Prescription drugs: They have agreements with pharmacy networks in the US to fill prescriptions, generally without out-of-pocket costs, and in some cases, a mail-order service is offered.
- Exam Reimbursement Program: Help pay for your employee’s initial testing. You can also reimburse your employee for additional tests.
- Nursing program to regain health: Specialist nurses to coordinate care and treatment. They can also help with physical, emotional, and occupational therapies.
- Pay-as-you-go billing solutions: Help manage your business’s cash flow by incorporating workers’ compensation premium payments into your actual payroll.
Types of Workers’ Compensation Insurance
Workers ‘ compensation insurance in CT and nationwide is a requirement of the law, which protects each business if full-time workers, part-time renters or even volunteers suffer an accident or illness at work. The provisions of the law vary according to each state.
The benefits required by law in general are:
Income: To cover the portion of salary lost by the affected person due to the work-related accident or illness caused by working conditions. These benefits, depending on the severity of the injury, include:
Temporary Income: Covers a portion of lost earnings due to time off work due to the incident.
Impairment Income Benefits: Upon reaching Maximum Medical Improvement, any permanent impairment of any kind remains. A certain amount is paid depending on the percentage of the body determined to have been injured
Supplemental Income: Additional contribution to the disabled if their salary is considered low
Lifetime Income Benefits: Right to collect for life up to 75% of your salary in case of suffering any of the serious injuries considered, such as loss of both eyes, limbs, one leg or one hand, paralysis due to damage to the spine, dementia, incurable mental retardation or severe burns in various proportions and parts of the body.
Medical Bills: They cover necessary medical treatment.
Death: Reimbursement of some funeral expenses.
Due to death: A portion of the income lost due to the death given to the relatives or beneficiaries of the worker.
Whether having employees or working as uninsured subcontractors, all companies in Connecticut must get workers’ compensation insurance for their employees’ protection. Workers’ compensation insurance varies from state to state. Therefore, it is important to discuss in detail what Connecticut businesses are required by law.
With a workers’ compensation insurance policy, they will be covered in the event of an accident on the job and a portion of their lost wages. Otherwise, the employer will be responsible for the costs of work-related injuries or ailments that happened to employees.
In addition, if the employers who are mandated to carry workers’ compensation insurance do not comply can face fines and other penalties for not abiding by the law.
Businesses automatically excluded from the workers’ compensation insurance include sole proprietors and single-member LLCs. They are not required by the law but can opt for it. Likewise, corporate officers and members of multi-member LLCs in Connecticut are included, but they can opt out if they want.
If you’re doing business in Connecticut and it is required to get worker’s compensation insurance by the Connecticut law, you must do it. It will prevent your business from possible devastating financial repercussions in the future and from financial penalties for not complying with the Connecticut law.
The regulatory body that determines the requirements regarding workers’ compensation insurance in the country is each state’s Workers’ Compensation Division. They are based on the Labor Code of each state.
On the other hand, the NAIC (National Association of Insurance Commissioners) controls regulating insurers and establishing the rules for their operation, in addition to other functions that include approval to allow them to operate.
The Cost of Workers’ Compensation Insurance
There is no one-size-fits-all policy in the US as the insurance policies are not owned or run by the government. Businesses must obtain an insurance policy from a private insurance company since only private insurers can issue workers’ compensation insurance policies in the US. In addition, the average costs of such insurance depend on the rules of each state.
The National Council on Compensation Insurance (NCCI) assigns classification code rates based on the type of work workers perform. If your company has a history of claims, this could increase the cost of your workers’ compensation.
Every business is unique. So the cost of workers’ compensation insurance for one business will probably be different than for another.
There’s no definite insurance rate, and it varies from state to state. Still, workers’ compensation insurance costs are calculated around three main factors: workers’ class code rate, claims experience modifier (Experience Mod), and payroll. Experience Mod is your claims history in numeric. The formula calculating workers’ compensation cost looks like this:
Payroll x employee classification code x Experience Mod = Premium
Don’t forget that this is a simplified formula to give you an estimate. The actual calculation of an insurance company is more complex. Your insurance company may also use other factors to calculate the cost of a workers’ compensation insurance policy, including:
- Industry Type
- The type of work of the employees
- Coverage limits
- Number of employees
It is advisable to request a workers’ compensation quote to determine its true cost.
Who Can Opt for Workers’ Compensation in Connecticut?
Generally, any on-the-job illness or injury that is not the result of self-inflicted injuries can qualify for a workers’ compensation claim. There are, however, exceptions to this general rule.
Examples of Work-Related Illnesses or Injuries Covered by Workers’ Compensation
While most people think of major physical injuries or accidents such as slips, falls, muscle strains, and broken bones, as discussed above, when talking about workers’ compensation, various conditions may not be so obvious and are covered.
For example, an employee becoming ill from a toxic substance such as a chemical cleaner that the employer negligently ingested may be able to file a workers’ compensation claim.
Another possible covered claim scenario is if an employee works in the foodservice industry and become ill with food poisoning from a meal served by the employer. However, this does not apply to any foodborne illness the employee may have experienced from bringing their own contaminated lunch.
Additionally, if the employee has a pre-existing condition that worsens while they are at work, they may qualify for workers’ compensation in some cases. For example, if they have carpal tunnel syndrome and their job requires repetitive wrist movements that make their symptoms worse, they may have a claim.
Finally, if the employer has engaged in intentional or negligent actions resulting in injury or illness on the employee’s part, they are entitled to file a workers’ compensation claim.
What Employees can do if You Do not Have Workers’ Compensation Insurance
If you do not have workers’ compensation insurance, it’s time you think about getting it. Because most employers are required to carry this insurance, and if they do not carry it, their employees can sue them in civil court and collect a state-funded settlement.
Another option that the employees have is to sue their employer outside of a workers’ compensation claim. If their injury or illness is severe, this may be a better option for them and a nightmare for the employer. This is because workers’ compensation does not always provide enough compensation.
Does Workers’ Compensation Insurance Apply When Working from Home?
Today, more and more companies allow their staff to work from home, also known as telecommuting. Without suffering traffic jams in the morning, working quietly at home is like a paradise on earth. But even at home, employees can be affected.
Normally, the employer must draw up a written contract in such a case. It can also be a digital contract.
In principle, the insurance applies even if the employees do not have a written document, but then they will then have to prove that the accident occurred in the course of their work. Also, the insurance will only cover if the accident happens because the employee had to work. Suppose an employee decides to take care of their garden during a day of teleworking but was a little less careful with this saw. The insurer will not consider it an accident at work unless the employee works in horticulture, of course.
What to Consider When Purchasing Workers’ Compensation Insurance in Connecticut?
As you already know, the state does not regulate insurance premiums. While the Office of Classification of Workers’ Compensation Insurance– the statistical agent licensed by the state insurance commissioner – recommends premiums and insurance companies register their premiums with the Connecticut Insurance Department.
Premiums may vary from insurer to insurer. Like any good consumer, you should shop around to see which insurance company best meets your needs. Cost is a consideration, but there are other factors: services provided, ease of access to claims adjusters, familiarity with your industry, doctors in your network, etc. If you have a broker or agent, they should give you expert advice.
We hope the information above has cleared all your doubts about workers’ compensation insurance and what Connecticut law requires you to do about it as an employer. You now know that several factors go into determining the annual premium your insurance company will charge you. So, it is best to do research and get at least three to four quotes to go for the best one.
Digital Marketing Director
Pawson Insurance | Legal Disclaimer |
Informational statements regarding insurance coverage are for general description purposes only. These statements do not amend, modify or supplement any insurance policy. Consult the actual policy or your agent for details regarding terms, conditions, coverage, exclusions, products, services and programs which may be available to you. Your eligibility for particular products and services is subject to the final determination of underwriting qualifications and acceptance by the insurance underwriting company providing such products or services. Statements on this website as to policies and coverages provide general information only. This information is not an offer to sell insurance.