Workers’ Comp Insurance in New Mexico

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Why You Need Workers’ Comp

New Mexico Workers’ Comp Insurance is a no-fault system that protects employees that get ill or injured in the course of their employment. The employer pays for insurance that promises to deliver prompt medical care and a percentage of the employee’s lost wages.

In exchange for the guarantee of disability pay and medical care, the employees give up their rights to sue the employer. The system provides important benefits to dependents and families in job-related fatalities. The employer gains protection for his important workforce, and for other business, financial, and personal assets.

Buying Workers’ Compensation in New Mexico

You can get workers’ comp coverage in New Mexico by four methods. You can buy on the open market, self-insure, join a self-insured group, or get coverage in the assigned risk pool.

Instructions for Buying

You can check with the Missouri Division of Workers Compensation to be sure that you are required to get coverage. You must decide whether to purchase coverage or self-insure. You can also get a list of licensed providers. Many companies use agents or brokers to arrange quotes and contracts. If you get quotes for coverage, then you can decide whether to buy or self-insure.

  • 1

    The Open market

    You can go directly to insurance companies, or use agents and brokers. You can work the commercial market to find the best quotes for coverage that meets your needs. Insurers use underwriting and your modified experience rating to determine your rates.

  • 2

    Self-Insurance

    Firms with a well-established record in business, and with ample financial resources can get a license to self-insure. The application must get approval from the Department of Insurance.

  • 3

    The Assigned Risk Pool

    Many new companies or those with records with high levels of claims may be unable to get coverage on the commercial market. These forms can contact an agent and get coverage through the assigned risk pool. The pool licenses carriers to provide high-risk coverage. The idea is to keep firms in the pol only long enough to get insurance on the open market.

  • 4

    Self-insured Group

    New Mexico allows public and private employers with like interests to form groups for covering liability. Trade associations and business groups are leading sponsors of group self-insurance; they often use these programs as incentives for members. Some groups form mutual funds that can gain in value and pay dividends to the owner-members.

What You Should Know About Workers’ comp in New Mexico

When computing the rule of three employees for workers comp coverage, exempt employees still count. For example, the president of a corporation as an officer can opt out of the coverage. However, when counting the number of employees, the president counts as a member of the workforce.

Is Your Business Required to Carry?

Every business with three or more employees must have workers’ comp insurance or self-insurance. Agricultural businesses are part of the system. They must have coverage if employing three or more workers.

If you belong to a trade association or other type of business group, then you should inquire whether it offers workers’ comp group participation as a benefit. You will have to qualify for group membership, and many business associations offer this as an attraction to membership.

Where to Buy Insurance?

The open market is the best place to buy. You can get options for payment plans, deductibles, and other ways to finance the expense. The open market usually offers the lowest prices available. If you cannot qualify for an open market policy, then you will have to use the high-risk pool until your business can get commercial coverage.

Other options include self-insurance for large, well-financed firms, and group self-insurance for firms that can join a self-insurance trust.

How Much Does Workers’ Comp Insurance Cost?

The 2014 survey of all 50 states across all occupations and employers, New Mexico posted an average of $1.50 per $100 payroll. This figure was in the lowest quarter among all states. The actual costs depend on the types of occupations the business uses. Rates reflect the risk experience of each job. For example, a buzz saw operator will cost more to insure than a coffee shop barista. Premiums also depend on the employer’s record of claims.

The insurers use the employer’s modified experience rating to determine how much to raise or lower the standard rate. A mod rate above 1.0 will raise the premium, and a rating below 1.0 will lower the premium. You can lower the costs of workers’ comp by practicing workplace safety and reducing the potential for claims due to injuries.

What Is the Cost of Not Getting Workers’ comp Insurance?

The costs to your business of not having insurance are significant and avoidable. The business and legal problems that stem from uninsured employer status in New Mexico will damage your business and put your personal assets at risk. The state government can shut-down an uninsured employer until it demonstrates full compliance.

If a worker files a claim against an uninsured employer, then the employer will be liable for all benefits, be subject to a civil suit by the employee, and subject to forfeiture and seizure of assets to pay the costs and benefits. The state can seize bank accounts, vehicles, business assets, and personal property of any kind to repay funds owed to an injured employee.

The state can investigate a situation and determine administrative and other violations. They refer possible criminal violations such as false statements and fraud for prosecution.

Factors that Impact Coverage

  • Legal

    Employers must pay the required fees for insurance and also post proof of coverage along with notice of benefits for employees. The legal notice requirements are part of the employer obligations.

  • Liability

    Employee leasing is a permissible arrangement under New Mexico law, and the leasing companies usually provide personnel fully insured. You must make certain and get proof of coverage when using leased workers and professional staff. If the leasing company fails to cover the employees, you could be liable for the costs, premiums, and claims.

  • Rates

    The premiums charges to an employer depend on the mix of occupations it uses, the modified experience rating, and the level of its safety programs. Many insurers offer discounts to customers that implement approved safety programs and can show efforts to improve workplace safety.

Other Helpful Tips

New Mexico uses on-site inspections to review safety programs and other types of employer compliance. This is an opportunity to gain important insights and ideas for improvements.

Conclusion

Employers have a wide range of choices for New Mexico Workers’ Comp Insurance. The state has a vigorous enforcement program and uses penalties to encourage employers to get and keep coverage. One must guard against the temptation to claim that there are not three employees since some exempt employees count towards the threshold.

New Mexico has a requirement that firms in the assigned risk pool move out as soon as possible. This policy not only promotes the private sector, but it gives firms an incentive to get stronger and run better safety programs.

Sources:

  • Workers’ compensation Administration, Information for Employers
    http://www.workerscomp.state.nm.us/Information-for-Employers

  • Workers Compensation
    http://www.tax.newmexico.gov/Businesses/workers-compensation.aspx