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Refreshing Insights

As if business insurance wasn’t complicated enough, each state has different requirements when it comes to workers’ compensation. Some states require businesses to provide work comp insurance exclusively through a state fund, while other states allow the option of using either the state fund or self-insurance. Still others allow employers to choose between private insurers, the state fund or self-insurance.

The minimum benefits that are payable to injured employees also varies by state, and there is often a range of rates depending on your industry classification and other factors. It can be difficult to keep it all straight, especially if you operate in several states. These variances make work comp compliance a moving target, in addition to the challenges of minimizing incidents, reducing your mod factor and effectively managing claims.

Here are some interesting facts showing how the rules and regulations for workers’ compensation can vary by state with particular attention on Wisconsin workers’ comp rules and regulations.

  • North Dakota experiences the lowest national average premium rate at $0.82, while New York is the highest at $3.08. Wisconsin ranks in the middle at $2.02. 
  • Each state can differ in its definition of a covered employee, what types of injuries are covered, how long an employee has to file a claim and excluded injuries. 
  • In Wisconsin, the Wisconsin Compensation Rating Bureau(WCRB) is responsible for the classification of employers, the rates and rating plans, but is not a state agency. WCRB is regulated by the State of Wisconsin and works closely with the Workers’ Compensation Division of the Wisconsin Department of Workforce Development.
  • There are 36 states that subscribe to the National Council on Compensation Insurance(NCCI), a rating bureau similar to the WCRB in Wisconsin, that creates a uniform classification system, calculates rates, makes filings with state regulators and performs other services to insurance companies.
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  • Unless a Wisconsin employer qualifies for self-insured status, all businesses that meet specific requirements must carry workers’ compensation. In Wisconsin, employers with fewer than three employees earning less than a combined payroll of $500 per quarter are typically exempt. Meanwhile, in Alabama, businesses with four or fewer employees are not required to provide workers’ compensations coverage, with the exception of some construction firms.
  • Out-of-state employers who have employees working in Wisconsin are required to have a workers’ compensation insurance policy in Wisconsin, according to Wisconsin Statute 102.28(2).
  • If qualified employers in Wisconsin do not maintain workers’ compensation insurance, they may be subject to a penalty of twice the amount of premium not paid during an uninsured time period or $750, whichever is greater. Other penalties may apply, and noncompliance could result in business closure and suspension of all operations until compliance is achieved. 
  • If an employee is injured on the job and workers’ compensation insurance is not in place, the employer is personally liable for eligible uninsured benefit claims.
  • The top two types of workers compensation claims are results of strains and sprains followed by cuts or punctures.
  • Four states in the U.S. – North Dakota, Ohio, Washington and Wyoming – prohibit the sale of workers’ compensation insurance by private insurers. 
Are You Compliant?

If your organization has experienced any changes (e.g., changes in your operation, new hires across state lines, business acquisitions, etc.), your classifications and rates may change.

To stay on top of the ever-changing compliance landscape, it’s best to work with an experienced risk advisor who knows the ins and outs of work comp and stays up to date on the latest regulations. Check out our success story showing how one company improved safety and lowered premiums. Then, reach out to us for tips on how to keep your work comp costs at bay.

A Proactive Approach to Work Comp CTA1

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A collection of articles from the McClone team with the helpful knowledge and insights to ensure your organization is well protected.