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In West Virginia, a business with any employees must purchase workers’ compensation insurance. There are a few exceptions, but the overwhelming majority of businesses are subject to providing workers’ comp to their employees, no matter how small the enterprise.
The benefits of workers’ comp
By law, employers cannot charge employees for any amount of workers’ comp insurance - payments are completely their responsibility. So, what’s the benefit? As an employer, you may not recognize the worthiness of workers’ comp insurance until an employee is injured on the job. That’s the case with any insurance – you may wonder why you are paying these bills until you have a claim. Workers’ comp is basically a no-fault policy that precludes the injured employee from suing your business.
When a worker suffers an on-the-job injury, or gets sick because of a job-related illness, worker’s comp – not their employer-based health care policy – pays the medical bills.Workers must seek medical care from a provider of the employer’s choosing. Workers’ comp also pays a percentage of wages while the worker recovers and offers compensation if the worker is permanently disabled as a result of his or her injuries. In West Virginia, an injured worker receives 2/3 of their base wages up to a specific limit. In a worst-case scenario, where a worker dies from a job-related issue, workers’ comp pays for burial expenses and provides funds for the late worker’s beneficiaries.
Without workers’ comp, that injured worker, or the survivors of a dead worker, could sue your business and potentially receive a huge settlement – perhaps enough to put the company out of business.
Workers’ comp exceptions
In West Virginia, exceptions to the workers’ comp regulations include:
Farmers with five or fewer full-time employees
Professional sports activities
Only the athletes are excluded. Employees who do not participate in sports but work otherwise in the business require workers’ comp coverage.
So-called “casual” employers are also exempt. State statutes define casual employer as “the number of his or her employees does not exceed three and the period of employment is temporary, intermittent and sporadic in nature and does not exceed ten calendar days in any calendar quarter.”
Sole Proprietors, Partner, Officers and LLCs
If you are a sole proprietor or partner, you are included for coverage purposes, but you have the choice to opt out. If your status is corporate officer, you are again included with the option to exclude yourself, but an employer has the right to decline covering corporate officers. If your entity is an LLC, West Virginia law allows exclusion of up to four members of the LLC, but these individuals may also opt for coverage.
While employers do not have to provide workers’ comp for independent contractors, there are criteria that such contractors must meet for consideration, so they do not count as employees. Workers in hazardous industries must meet the following criteria:
If the individual is an independent contractor, he or she must provide their own workers’ compensation coverage.
How to buy workers’ comp in West Virginia
In 2009, West Virginia moved from a state-sponsored workers’ comp program to the private market. That means employers can purchase workers’ comp insurance from any insurance agency or carrier licensed to write such policies in the Mountain State. Currently, the state has over 270 carriers offering workers’ comp to employers, and the West Virginia Offices of the Insurance Commissioner notes that overall costs have dropped by 72 percent since legislative changes went into effect in 2006. Workers’ comp insurance rates in West Virginia are among the least expensive in the country. An independent insurance agent can help you find the most reasonable coverage for your business’ needs. Such agents have access to multiple providers.
While the state no longer serves as a workers’ comp insurance provider, it still monitors private carriers to ensure all legal requirements and correct procedures are followed.
West Virginia permits employers to self-insure for workers’ comp if they have “sufficient capability and financial responsibility” to do so. Employers desiring to self-insure must submit an application to the state Insurance Commissioner and provide a bond or surety in the amount requested by the Commissioner. Such employers must have an effective health and safety plan in its workplacesand may need to obtain a policy of excess insurance. If the Commissioner allows self-insurance status, the employer should expect an annual review of the ability to meet such obligations. If the Commission finds that the employer is not meeting all self-insurance requirements, it can terminate the employer’s self-insurance status.
How workers’ comp insurance prices are calculated
The price you’ll pay for workers’ comp depends on various factors, but the primary one is the nature of your business. An occupation where workers are exposed to higher risks or hazards will cost more than a low-risk job. Every worker in your company is subject to a class code, which denotes risk. Like many other states, West Virginia relies on the National Council on Compensation Insurance to denote class codes. As with any insurance, if your company has a history of filing multiple claims, you can expect higher premiums.
Not only are West Virginia’s workers’ comp insurance rates a good deal by national standards, they also are less stringent in their statutes than many other states. For example, many states mandate disfigurement benefits for affected workers – that is not the case in West Virginia. It also does not include cost-of-living adjustments (COLAs) on workers’ comp, again helping to keep premium prices down. The bottom line is that workers’ comp protects your business and your employees.
For more information on West Virginia’s workers’ comp requirements, visit these sites:
West Virginia Offices of the Insurance Commissioner
Social Security: DI 52120.270 West Virginia Workers' Compensation (WC)