Workers' Compensation

Transcription

1 Workers' Compensation Workers compensation provides benefits to injured employees for accidents or occupational diseases arising out of, and in the course of, their employment. Compensation coverage is available through private insurance carriers licensed by the state, but self-insurance is allowed in both states with approval from the states Division of Workers Compensation. Costs vary for individual businesses and are dependent upon type of employment (occupational risk), estimated annual remuneration, and the company s loss experience. Kansas Employers with a gross annual payroll estimated to be more than $20,000 are subject to the provisions of the Workers Compensation Act. Employers may secure workers compensation insurance for their employees by 1) obtaining insurance from authorized private insurance companies, 2) becoming selfinsured, or 3) becoming a member of a qualified group-funded workers compensation insurance pool. A new rating structure in effect since 1995 allows workers compensation insurance coverage to be provided by private insurance companies on a competitive basis. Premiums are determined by applying the rate for a specific occupation, per $100 of payroll, to the annual wage per employee. Temporary total and permanent partial payments to injured workers are based on two-thirds of a worker s gross weekly wage, not to exceed $545 per week through June Benefits are also available in the cases of permanent total disability or for surviving spouse, dependents and heirs of an employee whose injury resulted in death. The state s administrative costs for workers compensation and maintenance of the Workers Compensation Fund balance are funded by assessments on the paid losses of insurance companies, group pools, and the self-insured. The most recent assessment rate for administrative costs was 2.79% and the assessment for the Workers Compensation Fund was assessed at 0.75%. These rates are set annually based on the previous calendar year s paid losses and the amounts required for administration and adequate Fund balance. The Kansas Department of Labor is on the web at Missouri All businesses with five or more employees (excluding agricultural or domestic labor) must provide workers compensation insurance to protect their workers in case of job-related injury, illness, or death. Construction employers with one or more employees must provide workers compensation insurance. Companies can offer this protection through a private insurance carrier or they can become self-insured. Premium rates vary depending on the risks associated with special occupations and on the employer s

2 loss (or injury) experience. Beginning in 1994, insurance rates are set by each insurance company on a competitive basis and employers have the opportunity to shop around for the lowest rates. As in most states, the premium rates apply to an employee s total annual salary. The maximum weekly benefit for temporary total disability payments are up to two-thirds of his or her average weekly wage. Additional payments are required if the employee has a permanent impairment or cannot return to work. If the injury results in death, benefits are paid to the employee s surviving dependents. Missouri s maximum weekly benefit for the period July 1, 2010 through June 30, 2011 is $799. An additional employer cost related to workers compensation is a premium tax to finance the expenses of the Missouri Division of Workers Compensation (up to 2%) and a premium surcharge to finance the Second Injury Fund. Both of these charges may be suspended or reduced depending on the amount needed for the administrative costs of the Division or the amount needed to maintain the proper balance of the Fund. In calendar year 2010, the administrative tax is 1.0 percent, the administrative surcharge is 1.0 percent and the Second Injury Fund surcharge is assessed at 3.0%. To aid in shopping among insurers, the state has set up a toll-free number for employers ( ). Information on companies with the lowest rates as well as the high, medium, and low rates for any particular class code is faxed back or mailed to the employer shopping for coverage. Additionally, employers can use the web version of the hotline, which provides the insurance rates for all carriers. The Missouri Division of Workers' Compensation is on the web at Oklahoma Oklahoma's workers' compensation system is governed by the body of law found in Title 85 of the Oklahoma Statutes. This law provides for medical, indemnity and rehabilitation benefits to injured workers. Administration The law is administered by the Oklahoma Workers' Compensation Court. Although it is part of the judicial branch of government, the Court is both judicial and administrative in nature. Ten judges hear contested cases and approve settlements at both Oklahoma City and Tulsa court locations. A claimant may request a hearing before a judge or may settle his or her claim without a trial. Appeals from a trial judge's ruling may be made to the Court En Banc or to the Oklahoma Supreme Court. The Court Administrator organizes, directs and develops all administrative work of the court. Among the Administrator's responsibilities are the regulation of all self-insurance and the application of the Schedule of Medical Fees. The Administrator also has the authority to approve certain settlements. Coverage By law, coverage is mandatory for all employers except: domestic or household employees where total payroll is less than $10,000 annually; agricultural or horticultural employees where total payroll is less than $100,000 annually; certain licensed real estate sales persons and brokers; and employees covered under Federal laws. Additional specific exemptions can be found in Sections 311 through 312 of Title 85 of the Oklahoma Statutes. Coverage for workers'

3 compensation can be obtained in three ways: by securing coverage from a private carrier licensed to provide workers' compensation coverage in the state of Oklahoma; by securing coverage from CompSource Oklahoma; or by obtaining approval from the Court to self-insure against workers' compensation liability. Basis for Compensation An injured worker is entitled to reimbursement for all reasonable and necessary medical treatment resulting from an on-the-job injury. In order for an injured worker to be entitled to temporary benefits, he or she must be unable to work for more than three calendar days. Compensation for permanent disability is based upon the impairment resulting from an injury and the benefit amounts provided by law. The method for determining permanent disability under Oklahoma's system is two part - initially a physician provides an evaluation of an individual's percent of impairment and then a determination of the individual's disability is made. Technically, "impairment" is a medical assessment of an individual's health and "disability" is a non-medical assessment of an individual's ability to meet personal, social or occupational needs. Once the percent of disability has been established, benefits are calculated based upon both the state's average weekly wage (SAWW) and the employee's average weekly wage (AWW). Benefits are referred to in terms of "weeks" or "weeks of compensation" for a particular injury. The law provides benefits equal to 70% of the employee's AWW up to 100% of the SAWW for temporary total, permanent total and death benefits. The current SAWW is $736. Please refer to Title 85 of the Oklahoma Statutes, Section 311 (Schedule of Compensation) for further information or contact the Oklahoma Workers' Compensation Court at (405) Statistics Options for Workers' Compensation Insurance Coverage Oklahoma law provides employers with three options for obtaining workers' compensation coverage. 1. Secure Coverage From A Private Insurance Carrier Authorized To Do Business In The State Of Oklahoma Many companies are currently authorized to sell workers' compensation insurance or a workers' compensation insurance equivalent product in the State of Oklahoma. A list of all authorized carriers is available, by request, from: Oklahoma Insurance Department Five Corporate Plaza 3525 NW 56th, Suite 100 Oklahoma City, OK Phone The Board approves loss cost rates for licensed insurers. Rate charges are proposed by the National Council for Compensation Insurance (NCCI), based on statistics gathered from the

4 majority of insurance companies in the state. Loss costs approved by the Board serve as a base to which individual companies apply an expense multiplier specific to their firm. 2. Secure Coverage From CompSource Oklahoma or another provider CompSource Oklahoma was established by the Oklahoma Legislature in 1933 as a separate entity to provide a reliable market for workers' compensation insurance at the lowest possible price. CompSource operates as a self-supporting insurance company selling workers' compensation coverage to Oklahoma businesses either directly or through insurance agents that have signed an agency agreement with CompSource. Commission is paid to the agent on a sliding scale based on the loss experience of the employer being submitted for coverage. As an entity of state government, CompSource is not subject to rate approval by the Property and Casualty Board and does not pay premium taxes. Instead, CompSource's governing Board of Managers establishes the rates. To obtain a quote for insurance for an individual company contact: CompSource Oklahoma Attn: Underwriting Division P.O. Box Oklahoma City, OK Phone Self-Insure Against Workers' Compensation Liability Oklahoma law provides that if an employer furnishes satisfactory proof of financial ability to pay compensation, that employer may be approved to carry its own risk without insurance (self-insured). Approval to self-insure is granted by the Oklahoma Workers' Compensation Court, based on an application that determines whether or not an employer meets the statutory and regulatory criteria. Those criteria, found in Rule 2 of the Rules of the Administrator of the Oklahoma Workers' Compensation Court, are summarized below: continuously engaged in business for not less than five years; average minimum payroll of not less than $1,000,000 in each of the three preceding years; shareholders' equity of not less than $500,000; not less than 100 employees; and demonstrate financial strength to pay all workers' compensation obligations. In addition to self-insuring as an individual employer, certain groups of employers may form group self-insurance associations. Information about self-insurance, applicable rules and forms may be obtained by contacting: Oklahoma Workers' Compensation Court Insurance Department 1915 North Stiles Oklahoma City, OK 73105

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