Workers’ Comp Insurance in Montana

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Why Do you need workers’comp?

You need workers’ comp for essential protection for your employees, their families, and your business. The Montana Workers’ Comp Insurance laws provide a financial safety net for workers that get hurt or sick in the course of their employment. Workers give up their right to sue for damages in exchange for guarantees of medical care and recovery of lost wages.

You need workers’ comp insurance because the state requires it from any employer with one or more part-time or full-time employees. With limited exceptions, nearly every employer must get covered.

Buying Workers’ Compensation in Montana

The private market offers a range of providers, agents, and brokers. If you do not have experience with workers’ comp insurance, you can use agents and brokers to work the market and find quotes that match your needs and preferences.

Private insurers use underwriting to investigate your financial status and loss records. Some new businesses, recently expanded businesses, and firms with significant claims in their history may have difficulty getting coverage on the open market. If you cannot buy on the market, then you will have to self-insure or purchase in the assigned risk pool.

Instructions for Buying

You will need to gather some information to make the process go as smoothly as possible and increase your chances of success.

  • Copies of current workers’ compensation insurance policy
  • If not currently insured, then provide a copy of the last policies.
  • Audited financials for the past three years.
  • Copies of year-to-date or current financials.
  • A list of the occupations and positions you must cover.
  • Copy of your modified experience ratting from NCCI.
  • A copy of your loss trail from your last insurer, if any.

You will get quotes from open market providers and compare for the best price, coverage and support services. The policy must include claims processing, medical care, and benefits administration. The alternatives are to apply for self-insurance or purchase from the assigned risk pool.

What You Should Know About Workers’ Comp in Montana

The law exempts independent contractors from the employer’s duty to cover all employees. However, the independent contractor must obtain an IEC certificate to confirm his or her status. In the absence of a certificate, the state will hold the employer liable for coverage.

Is Your Business Required to Carry?

The general rule is that every business in Montana must have workers’comp insurance. The exemptions are limited primarily to sole proprietors and officers of LLC’s; they can opt in and get coverage. Corporate officers are presumed to be employees but can opt out of the system. The threshold number of employees is one- either full-time or part time. The law exempts few categories; the exemptions include domestic workers’ working in private homes and casual labor.

Where to Buy Insurance?

  • 1

    The Voluntary Market

    Montana has a sound private market and the Montana State fund is part of the private market because it competes for well-qualified customers. Private insurers can use underwriting to assess risks along with the modified experience rating or a recent loss run. Those that qualify can get the best rates for workers’ comp insurance in Montana.

  • 2

    Self-Insurance

    The state department of Insurance authorizes all insurance activities in the state Self-insurers sit in the shoes of commercial carriers and must be responsible for covering liabilities, adjusting claims, and providing medical care reimbursement. Self-insurers must demonstrate financial and management capacity to handle the liability and the administration. Additionally, they must have a robust safety initiative. The law requires a security deposit and proof of excess liability insurance.

  • 3

    Assigned Risk Pool

    The Montana State Fund is the guaranteed insurer for Montana employers. The Montana State Fund does two things; it competes with the private sector for business, and it provides coverage for those that cannot get insurance on the open market. The coverage for those unable to get market policies is the State assigned risk fund. Assigned coverage costs more on average than comparable market policies. Unlike most states, Montana State Fund is the insurer and does not contract out to a large private provider.

How Much Does Workers’ Comp Insurance Cost?

One survey compared the average price over all employers and job codes for every state. That survey listed Montana’s average costs at $ 2.49per $100 of payroll. This was among the highest rates in the nation. The use of NCCI occupation codes and base rates sets the stage for insurance providers to decide final prices for each policyholder.

The types of occupations determine the base rates. Some occupations rate higher than others. A lumberjack’s coverage would cost more than a library aide; the risks of injury are much higher with the lumberjack.

The biggest variable factor in pricing is the applicant’s Modified Experience rating. This number compares the actual claims record against the averages for similar businesses. The NCCI is the rating agency for Montana. The NCCI sets rates and defines occupational codes

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

If you are not insured and an employee gets sick or injured, then you will pay fines and penalties. You will pay 200 percent of the premiums, all the work loss, and medical expenses of your uninsured employees. The state can use administrative powers to enforce an order for compliance.

Factors That Impact Coverage

  • Legal

    Montana asserts its interest in cases in which a Montana insured worker gets ill or injured while at work temporarily outside of Montana. The Montana law applies to the worker and controls questions of coverage and benefits.

  • Liability

    Independent contractors, commissioned real estate and other similar sales occupations are generally exempt from workers’ comp coverage requirements. The status of independent contractors requires a certificate from the state. Prime contractors, subcontractors, and employers everywhere in the state have liability for a contractor without a certificate.

  • Rates

    The state of Montana collects three additional charges on every premium paid in the state. They are the regulatory assessment, second injury fund, and occupational safety and health charge.

  • The Workers’ Compensation Regulatory Assessment Surcharge 2017 rate is 0.014749.
  • The workers’ compensation subsequent injury fund surcharge funds the subsequent injury fund that protects employers against paying for aggravation or worsening of pre-existing injuries. The 2017 rate is 0.002701
  • The occupational safety and health regulatory assessment surcharge 2017 rate is 0.006684

Other Tips

Montana’s rates are among the highest in the country. They emphasize safety standards as the method to bring down costs rather than reducing benefits for workers’ and families. Insurers offer discounts for employer safety programs. They maintain an active second injury find to help employers avoid an excessive burden for second injuries that worsen pre-existing conditions

Conclusion

Montana Workers’ Comp Insurance is an important protection for your business. it can protect your business and personal assets from the costs of work-related injuries, illnesses, and deaths. Montana has a policy of strict enforcement. Uninsured employers face penalties and fines. They must reimburse the Uninsured Employer Fund for payments made on their behalf, and the uninsured employee can sue the employer for damages.

Sources:

  • Montana Workers’ Comp Regulations
    http://erd.dli.mt.gov/work-comp-regulations

  • Montana Employer Resources
    http://erd.dli.mt.gov/employers