On May 3, 2016, residents across the state of Idaho learned of a tragic accident that occurred in Boise. Three men working for Hard Rock Construction were working in a 9-foot-deep trench while installing a sewer line in a residential area. The trench collapsed and the three men were buried alive. One man was rescued, but the other two were crushed under the weight of the earth that covered them and died. When a tragedy like this happens, people are left with many questions: How did it happen? Could it have been prevented? Will the families of those lost be compensated?
Most work-related injuries are minor and workers are able to resume their work duties in a short time. Sometimes, however, the accidents are tragic, like the one in Boise. Employers are responsible for covering injuries and related financial losses sustained by their employees while on the job. At times, these costs can be staggering. That is why most businesses in the state are required to carry an Idaho workers' compensation policy.
What Are Idaho Workers' Compensation Laws?
If you operate a business in Idaho, you will need to ensure that you are adhering to the state workers' compensation laws. In this state, all businesses with one or more employees , whether full-time, part-time, seasonal, or occasional, are required to have an Idaho workmans' comp policy.
Failure to carry this coverage can result in fines for your business. The assessed fine will be either $2.00 dollars a day for each employee who is not covered, or $25.00 a day for each day that you are operating your business without coverage—whichever is greater. If an employee is injured on the job and you do not have this insurance, you can be held personally responsible for covering the resulting medical treatments, lost wages, associated costs, your employee’s attorney fees, and penalties of 10% of the amount of medical and wage-loss benefits owed to the employee.
There are, however, a few exceptions. You are exempt from the requirement to carry this coverage if:
- Your business is a sole proprietorship with no employees, or your employees are all family members who reside in your household
- Your business is covered under federal workers’ compensation laws
And you do not need to cover the following types of workers:
- Domestic help
- Pilots of agricultural spraying or dusting planes
- Real estate agents and brokers who are paid only in commissions
- Volunteer ski patrollers
- Athletic officials for schools
- Casual employees whose work is not related to your normal business activities
If you are in doubt about the requirements for your particular business, you can turn to a local insurance professional for guidance.
Idaho Workers' Compensation Insurance Basics
What Is Covered?
An Idaho workmans' comp policy is designed to cover employers against the costs related to workplace injuries or illnesses, regardless of fault. These costs can include coverage for medical treatments, lost wages, long-term care, long-term disability, and death benefits for family members.
The range of covered illnesses and injuries is vast. They can include those that immediately follow an accident on the job, or they can be the result of long-term exposure to chemicals, radiation, or repetitive motion. Carpal tunnel syndrome is a work-related injury often reported by office workers. There are, of course, exceptions to what is covered. Your provider is likely to deny coverage for injuries that:
- Occurred while the employee was under the influence of drugs or alcohol
- Happened while an employee was committing a felony
- Resulted from actions that were in direct violation of company policy
- Were self-inflicted
Who Is Covered?
In addition to covering employees, Idaho workers' compensation insurance policies can also protect employers from lawsuits related to occupational injuries. When a claim is processed and the employees, or their families, collect the allotted benefits, they forfeit their right to sue your company for negligence. Fatal work injuries can be particularly expensive to cover. In the case of the Boise accident, the workers who died were only 36 and 26 years old and they had subtanstial remaining years of earning potential, for which their families were entitled to be compensated.
Where Can You Buy Coverage?
The National Council on Compensation Insurance (NCCI) is a federal government entity that handles data collection and regulates workers' compensation coverage. Idaho is an NCCI state. Employers here can obtain coverage in one of four ways:
- You can buy it from one of the more than 300 insurance companies licensed to issue workers' comp policies in this state.
- You can purchase it through the State Insurance Fund, which is a quasi-government entity.
- You can enter into an assigned risk pool administered by the NCCI.
- You can opt for self-insurance by proving to the Idaho Industrial Commission that your business can meet specific requirements.
The NCCI classifies businesses into different categories according to the services they provide; these are represented by numeric codes. Some businesses may provide more than one kind of service. In that case, insurers calculate rates for each industry according to the payrolls for each.
How Much Does Idaho Workmans' Comp Cost?
Insurance providers calculate the cost of your Idaho workers' comp policy using a standard calculation based on state-wide industry rates. Your assessed cost will be based on factors such as:
- The industry in which your business operates and the risks associated with the work your employees do
- Your company’s total annual payroll
- Your company's assessed risk and claims experience within its industry, which is expressed as an experience modification factor.
An independent insurance agent can help you discover how your company may qualify for discounts, and can help you find an Idaho workers' compensation company that is well-suited to handle the needs of businesses in your industry. These insurers will often provide your business with information about safety protocols and tips that can protect your employees while ensuring that your company meets all OSHA requirements.
Idaho Workers’ Compensation 2017 Base Rate Examples
Idaho bases its workers' compensation rates on NCCI guidelines and assigns a minimum and maximum rate for each industry classification.
Here are some sample base rates (per $100 of employer payroll) from the Idaho State Insurance Fund as of January 1, 2016. Bear in mind, these rates are updated each year and could go up or down, depending on rates of worker injuries in the state.
- 0042 Landscaping: $7.19
- 5183 Plumbing: $5.26
- 5645 Carpentry/Construction: $17.06
- 8017 Retail Store: $2.21
- 8810 Clerical: $0.230
- 9082 Restaurant: $2.30
As you can see, it costs much less to insure office works than to cover workers in the carpentry and construction industry. This is because office workers are far less likely to sustain serious work-related injuries.
What Is an Experience Rating and How Does It Affect Your Costs?
In this state, companies are assigned an experience modification factor, or experience mod, and this rating can affect your Idaho workers' compensation insurance rates.
An experience mod lets insurers get an idea about how your company’s risk of worker injuries compares to similarly-sized businesses in your industry. It is assessed according to how your company’s actual losses compare to the expected losses within your industry. A higher experience mod will result in higher premiums.
Experience mod eligibility rating requirements vary from state to state. Most, but not all, businesses in Idaho qualify to be experience-rated. In this state, a workers’ compensation experience rating is mandatory for employers with either:
- $6,000 in policy premium generated during the last year or last two years; or
- $3,000 average policy premium generated for more than two years.
If your your business has an experience mod rating, your Idaho workmans' comp premiums are calculated using the following formula:
- Base Rate X Payroll X Experience Mod = Premium
Your mod rating can raise or lower your Idaho workers’ compensation base premium. This works as follows:
- A mod of 1.0 does not impact your rate. All employers start out with a mod of 1.0. It represents industry standards for worker injuries, in terms of both severity and frequency.
- A mod of anything greater than 1.0 is a debit mod. This means that your losses were worse than expected within your industry. As a result, you your base rate will be increased.
- A mod of anything less than 1.0 is a credit mod. This means your losses were better than expected. As a result, your premium rate will be reduced.
Here are some examples of how your experience rating can affect your Idaho workers’ compensation premiums:
- Premium: $100,000
- Mod: 0.80 (20% premium credit)
- Premium with mod credit applied: $80,000
- Premium: $100,000
- Mod: 1.0
- Premium is not adjusted: $100,000
- Premium: $100,000
- Mod: 1.20 (20% premium surcharge/debit)
- Premium with mod debit applied: $120,000
You can keep your workers’ compensation rates lower by instituting safety practices in your company. Naturally, your Idaho workmans' compensation insurance provider will be just as interested in keeping your workers safe as you are. Many of these insurers cater to specific industries and can offer a wealth of information related to workplace safety. They may even require your business to adhere to certain safety protocols. Failure to do so can result in the cancellation of your policy.
Get Help Securing an Idaho Workers’ Comp Policy
Accidents like trench collapses are extremely rare; however, as the Boise incident shows, they can happen. Employers should be prepared to handle the costs associated with any kind of work-related accident, no matter how insignificant the risk may seem. That is why it is so important to find a workers' compensation package that is appropriate to meet the needs of your business.
Local independent insurance agents who deal in business insurance are well-versed in Idaho workers' compensation laws. These agents can help match you up with the best insurance companies to meet your needs. Find an agent near you to learn more and get quotes for covering your company with Idaho workers' compensation insurance.