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The requirements of workers’ compensation (comp) insurance in Iowa are clearly outlined for both large and small employers alike. And, the filing system in the state is highly efficient and effective. The following workers’ comp insurance guideline for Iowa will help to ensure you follow the state requirements at all times.
The Purpose of Workers’ Compensation Insurance
In 2015, Iowa experienced 39,000 nonfatal injuries and illnesses in the private sector alone, or rather 3.7 instances per 100 people. This figure is higher than the national average of 3.0 per 100 people. Of the injuries reported, 20,500 cases required individuals to spend time away from work, restrictions or job transfers. Such injuries and illnesses are the reason workers comp insurance is required in all states.
With the appropriate insurance, reimbursement of expenses are provided to workers based on medical bills, rehabilitation and a portion of lost wages. While employers are responsible for the cost of insurance premiums for each employee, the no-fault claim an employee files protects the employer from further liable damages. Basically, when an employee agrees to work for your organization and you provide them with adequate and prompt comp insurance coverage, they cannot sue you.
It is important to note that legal action could take place for several reasons by either party. An employee has 90 days to file a claim of injury. If an insurance provider does not provide benefits in a timely manner, an employer and their carrier could be sued for compensation. At the same time, if an employer believes that an injury is a result of a preexisting condition, the employer can file a dispute to minimize compensation amounts. Both the employer and the employee are protected by workers’ compensation insurance.
Iowa Workers’ Comp Requirements
Most employers are required to provide workers’ compensation insurance. A few exceptions do exist such as independent contractors, or rather sole proprietors, members and partners of a limited liability company (LLC) and partnerships of a small business. These individuals can opt to purchase insurance coverage, however special provisions must be made.
Additional exemptions include individuals who work in agriculture, persons hired by family members, people who earn less than $1,500 a year and services performed in the house of an employer. More exemptions exist;however the law is somewhat complicated and it is advised to speak with a Workers’ Compensation Compliance Administrator to determine whether or not your employees are required to be covered.
The definition of a workplace injury in Iowa is quite comprehensive. It could include a minor or severe health condition that develops due to standard work functions above and beyond the normal tear down and buildup of body tissue. It also includes hearing loss and disease developed overtime due to standard work functions or a result of exposure to harmful elements. Preexisting conditions are somewhat complicated. If a work activity worsens or aggravates a preexisting condition, it can be covered by workers’ comp.
The following are a few of the types of benefits available to employees through workers’ comp insurance in Iowa:
The cost of an employer’s annual premium depends on many specific factors including the occupational classifications it employs, and its history of claims. On a statewide basis and across all occupational codes, the 2014 cost was $0.84 per $100 of earnings. Using data from the NCCI database, the Indiana Compensation Rating Bureau (ICRB) sets advisory rates for each employment classification. These standards form the basis, and insurers can modify them by underwriting, and assessing the employer’s claims history of injuries and illnesses.
- Payment of lost wages in certain circumstances.
- All necessary and reasonable medical benefits.
- Disability compensation which cannot exceed 80 percent of an employee’s spendable earnings, or rather 80 percent of one’s remaining earnings after taxes.
- Rehabilitation expenses.
- Death benefits.
Disputes can occur despite protecting your business and your employees with the proper coverage. If you communicate with your insurance provider and your employee with an open dialog, disputes are far more likely to be resolved amicably. When such results are not possible, the Iowa Workers’ Compensation Commissioner’s Office will help to resolve claim disputes.
The commissioner will oversee, administer, regulate and enforce the process according to Iowa’s workers’ compensation laws. The commissioner could find in favor of either party based on the circumstance. If a settlement is approved by the commissioner, you can expect it to be one of four possible settlements varying from paying the entire future benefits in full at one time to no longer being responsible to pay any future benefits.
Expenses to Employers
The cost of insurance premiums to Iowa employers is roughly equivalent to that of the national average. A class code will be assigned to each individual based on a number of factors such as the risk involved on the job, whether or not the individual has dependents and the age of the individual. Some businesses, such as office-based employers, are likely to have significantly lower premiums than manufacturing companies.
Also, insurance carriers in Iowa will award up to a 25 percent discount, or issue credits, if companies are proactive in their safety, education and training programs. Keep in mind that almost all of your employees will require workers’ comp insurance despite the level of risk involved with their daily tasks. And, to minimize your expenses and liability, be sure to keep impeccable records of all workplace related injuries and illnesses.
Where and How to Buy
Iowa allows for employers to purchase insurance from private carriers or to apply for self-insurance. If you choose a private carrier, as long as you are in good standing with your payments, the insurance company will pay the benefits to the employee upon receipt of the proper documentation. It is a good idea to help your employees with this process to ensure no delays are met that might lead to the filing of a dispute or a strained working relationship.
The Insurance Commissioner in the Iowa Division of Workers’ Compensation oversees approving businesses that wish to become self-insured. Viable candidates must be able to prove they possess the financial means to meet all benefits and compensation laws if an injury were to occur. If you are approved for self-insurance, you are responsible to pay the injured employee all compensation benefits they are legally owed.
No Comp Insurance, Big Problems
Even if you do not have the proper workers’ compensation insurance, you are still legally required to pay benefits to the injured employee according to the law if the case is taken to court. While these fees could be substantially more than if you had been paying monthly insurance premiums, they are only the start to your legal and financial troubles.
If you knowingly and willfully abstain from providing insurance benefits, you could be charged with a class D felony. And, you could also face criminal and civil charges that could result in thousands of dollars in additional fines. You are only protected from liability claims if you provide workers’ comp from the day the employee begins work and remain in good standing.
Additional Information and Resources
In late August 2017, the Iowa Insurance Division announced the workers’ compensation rates will decrease by 8.9 percent as of 1 January 2018. Additional reforms will include that attorneys are no longer allowed to accept fees from employees who are injured when the employer is providing benefits voluntarily. And, injured employees are no longer able to accept both workers’ comp insurance and unemployment benefits at the same time. It is also important to note that if a claim is being contested, a provider of medical care cannot actively attempt to collect payment for treatments from any party.
For any additional questions or concerns pertaining to workers comp insurance in Iowa, you can contact the following:
- Iowa Division of Workers’ Compensation
- Iowa Insurance Commissioner’s Office
- National Council on Compensation Insurance
Remember that when you provide the appropriate workers’ compensation insurance to your employees, you will likely improve workplace relations that can result in greater productivity and fewer days away from work.