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Workers Compensation Insurance FAQ
Workers' Compensation Insurance FAQQ: Am I required to carry workers' compensation insurance?
A: California law requires all employers who have at least one employee to have workers' compensation insurance. Employers who are out of state may need to have workers' compensation insurance if one of their employees is employed in California or if a contract of employment is entered in California. Roofers who have no employees are still required to carry workers' compensation insurance.
Q: My spouse and I are the only ones who own and run our business. Are we required to carry workers' compensation insurance?
A: Coverage for owners of a business is not required. Owners should consult with their attorneys or insurance agents or carriers to discuss the specifics mentioned in the California Labor Code. However, workers' compensation coverage is needed if any employees are hired in the future.
Q: Are executive officers/directors of the company covered under workers' compensation insurance?
A: All employees of any kind must be covered unless they are the sole owners of the business. Owners should consult with their attorneys or insurance agents or carriers to discuss the specifics mentioned in the California Labor Code.
Q: Where do I get workers' compensation insurance?
A: An agent or broker from a privately licensed insurer authorized to write policies in California can sell workers' compensation insurance coverage. If no insurers are willing to cover a business, the State Compensation Insurance Fund is required to provide coverage.
Trade groups may offer special rates for trade association members. Q: Does self insurance cover workers' compensation insurance?
A: Self insurance is generally only possible with very large companies, requiring state approval, a net worth of at least $5 million, a net income of at least $500,000 per year, and a posting of a security deposit. Group self insurance is a method that works by pooling the workers' compensation liabilities of several employers in the same homogenous industry.
Q: How expensive is workers' compensation insurance?
A: The Workers' Compensation Insurance Rating Bureau suggests insurance rates, but they are not regulated by the state. Insurance companies set their own varying rates.
Q: What determines the cost for premiums?
A: Industry classification, past history of work-related injuries, payroll, special underwriting adjustments, and special group or dividend programs all factor in to the annual premium.
Q: Can employees help pay for their employer's workers' compensation insurance?
A: Workers' compensation insurance is a cost to the business and employees cannot pay for the insurance premium.
Q: What are the posting requirements?
A: The “Notice to Employees” poster provides information about the workers' compensation coverage and must be posted in a conspicuous location at the workplace. If this notice is not posted, it is considered a misdemeanor and can result in a civil penalty of up to $7,000 for each violation.
Q: Where do I get claim forms for my employees if they are injured or get sick on the job?
A: The insurance carrier or third party administrator will provide any required claim forms.
Q: How do I ensure my employees are taken care of properly if they are injured or get sick on the job?
A: Employers should speak with injured employees to work out any problems. The state has a reimbursement program for expenses that may be required in order to return an injured employee to work.
Q: What are the new medical provider networks?
A: A group of health care providers approved by DWC's administrative director called a Medical Provider Network treat injured workers. Various types of doctors specializing in work-related injuries or with expertise in general areas of medicine are included in each MPN. An injured worker will be treated by these doctors unless they were able to designate their personal doctor before the injury occurred.
Q: What does pre-designating a personal doctor involve?
A: Injured employees can be treated by their personal physicians if their employer offers group health coverage, the doctor has treated them in the past and has their medical records, the doctor agreed to treat them for work injuries and illnesses, and the employee provides their employer with a written statement prior to the event that states they want their personal doctor to treat them along with the doctor's name and business address.
Q: Is it acceptable to pay the doctor in cash?
A: An employer may not pay for medical bills directly. Employers must file a claim form with their claims administrator for all injuries requiring more than first aid.
Q: What can I do if I suspect an employee's workers' compensation claim is not valid?
A: Employers should report their opinions to their workers' compensation claims administrator and let them know all the facts, any witnesses, and the people the administrator should talk to. These should be followed up by a written letter.
Q: What should I do if I receive a notice of hearing on a claim for a person I did not hire?
A: Employers should inform their claims administrator and follow up with a written letter.
Q: Who investigates workers' compensation fraud cases?
A: The California Department of Insurance works with local district attorneys to prosecute those caught in a workers' compensation fraud.
Q: What happens if an employee is injured and I do not have workers' compensation insurance?
A: Employers required to have workers' compensation coverage who fail to do so are committing a misdemeanor punishable by a fine of up to $10,000 and/or imprisonment in the county jail for up to one year. The state also issues penalties of up to $100,000 against illegally uninsured employers. Uninsured employers are responsible for paying all bills related to the employee's injury or illness. Because uninsured employers are not protected by the return of workers' compensation insurance, the injured employee may also file a civil action against them.
Q: What is the Uninsured Employers' Benefit Trust Fund?
A: The Uninsured Employers' Benefit Trust Fund is a unit within the Division of Workers' Compensation that pays benefits to injured workers who worked under an uninsured employer. The Uninsured Employers' Benefit Trust Fund will attempt to recover the costs of these benefits from the uninsured employer in every possible way.
Q: How do I get proof that I am covered by workers' compensation insurance?
A: Employers can request a certificate of insurance from their insurance carrier.
Q: Where can I report an employer for not carrying workers' compensation insurance?
A: Uninsured employers may be reported to the nearest office of the Division of Labor Standards Enforcement.
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