In July 2016, two workers were seriously injured in two accidents at the same Pratt, Kansas wind farm. The first accident occurred on July 3. A 41-year-old man who was repairing a blade on a wind generator fell more than 120 feet when a platform he was standing on fell. He landed on his back in a muddy field and was taken to a hospital in Wichita in critical condition. A few days later, a 26-year-old worker suffered a severe head injury when a four-pound bolt fell from about 100 feet above him and struck him on the head. He was not wearing a helmet.
These men worked for different contracting companies that were doing work at the farm. Their employers were responsible for covering the costs associated with their injuries. Fortunately, because employers in this state are required to carry a Kansas workmans' comp policy, these men’s injuries could be covered without causing undue hardship to the companies they worked for.
What Are Kansas Workers' Compensation Laws?
Kansas workers' compensation laws require all employers in this state to carry workmans' comp coverage with a few exceptions, which include:
- Companies with a gross annual payroll of $20,000 or less (for sole proprietors, salaries paid to themselves and family members are excluded are not used in the computation of payroll totals)
- Employers who hire workers for certain agricultural jobs
Furthermore, employers in this state are not required to cover the following types of workers:
- Realtors who are acting as independent contractors
- Firefighters who belong to a firefighters' relief association
- Owner-operator vehicle drivers who are covered by their own occupational accident insurance policies
Employers have the option of purchasing a Kansas workers' compensation policy, or they may opt for self-insurance by demonstrating to the Kansas Division of Workers' Compensation that they have the means to handle the costs of workplace injuries. Additionally, some employers who meet certain requirements can band together to form a group-funded self-insurance pool. This sort of program is overseen by the Kansas Department of Insurance.
Kansas Workers' Compensation Insurance Basics
What Is Covered?
Kansas workmans' comp policies are designed to cover employers against costs related to occupational injuries and illnesses, regardless of fault. Those expenses can include medical treatment, lost wages, long-term disability, and long-term treatment.
The injuries and illnesses covered can be those that result in immediate injury, such as in the case of the worker who sustained a head injury when the bolt fell on him, or they may be those that result over a long time period, such as repetitive stress injuries or illnesses resulting from long-term exposure to toxic chemicals.
There are instances where an employee’s claim may be denied. These are defined under the terms of your policy, and typically include cases such as those where the employee was under the influence of drugs or alcohol, was committing a felony at the time the injury occurred, or were self-inflicted.
Who Is Covered?
Kansas workmans' comp covers both your business and your employees. Your workers do not need to worry about loss of income because of an on-the-job injury, and you, as a business owner, do not have to worry about the possibility of facing overwhelming medical costs or liability lawsuits related to these injuries. By accepting a settlement from your insurance company, injured employees or their family members can quickly obtain the coverage and compensation owed to them, and in doing so, they forfeit their right to sue your business for negligence at a later date.
Most occupational injuries are minor and the employee is able to resume normal job duties in a reasonable amount of time. Fatal accidents and serious injuries that require extensive medical care—like the ones experienced by the wind-farm worker who fell 120 feet and the one who suffered a head injury—can be extremely expensive. This is because in addition to the cost of treatments, family members are entitled to long-term compensation for lost wages.
Where Can You Buy Coverage?
Kansas has a private market for workers' compensation coverage. This means that you can buy a policy from any private insurance carrier that is licensed to provide it in this state.
Independent insurance professionals can help you understand ways that your company may qualify for discounts, and can help you find a Kansas workers' compensation company that understands the needs of businesses in your industry. Often, these companies will even provide you with information about safety standards and protocols that can keep your employees safe and ensure that you meet all OSHA requirements.
How Much Does Kansas Workmans' Comp Cost?
Insurance companies will calculate the cost of your Kansas workers' comp policy using a state-wide standard calculation. It is based on factors such as the number of workers you employ, the type of work they do and the risks associated with that work, your company’s total annual payroll amount, and your company's assessed risk factor.
Kansas Workers’ Compensation 2016 Base Rate Examples
Kansas bases its workers' compensation rates on National Council on Compensation Insurance guidelines and assigns a minimum and maximum rate for each industry classification.
Here are some sample base rates (rate per $100 of employer payroll) 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: $5.34
- 5183 Plumbing: $2.36
- 5645 Non Residential Construction: $7.76
- 8017 Retail Store: $1.07
- 8810 Clerical: $0.12
- 9082 Restaurant: $0.91
As you can see, it costs far less to insure office workers than workers in the construction and landscaping industries, where injuries are more to be expected and can be of greater severity.
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 Kansas workers' compensation insurance rates.
Your assigned experience mod provides insurance companies with an indication of how your worker injury risk compares to other businesses of your size in your industry. Your experience mod 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 premium rates.
Experience mod eligibility rating requirements vary by state. Most, but not all, businesses in Kansas qualify to be experience-rated. In this state, a workers’ compensation experience rating is mandatory for employers with either:
- $4,500 in policy premium generated during the last year or last two years; or
- $2,250 average policy premium generated for more than two years.
If your Kansas workmans' comp policy is experience-rated, your premiums are determined with the following formula:
- Base Rate X Payroll X Experience Mod = Premium
Your mod rating represents a debit or credit, and this amount is applied to your workers’ compensation base premium. This works as follows:
- A mod of 1.0 is considered to be average and does not impact your rate. All employers start out with a mod of 1.0.
- A mod greater than 1.0 is a debit mod. This means that your losses were worse than expected, and you will pay a rate greater than your base rate.
- A mod less than 1.0 is a credit mod. This means your losses were better than expected, and your costs will be lower than your base rate.
Here are some examples of how your experience rating can affect your Kansas workers’ compensation premiums:
- Premium: $100,000
- Mod: 0.75 (25% premium credit)
- Premium with mod credit applied: $75,000
- Premium: $100,000
- Mod: 1.0
- Premium is not adjusted
- Premium: $100,000
- Mod: 1.25 (25% premium surcharge/debit)
- Premium with mod debit applied: $125,000
The best way to keep your workers’ compensation rates on the low end of the scale is to keep your experience mod low. You can do this by taking measures to safeguard your workers against injury. Your insurance company will be just as interested in protecting your workers as you are, and a good insurance company can assist you in this endeavor by providing you with resources and guidelines. An independent agent can help you find an insurance company that can work well with you and your business.
Get Help Securing a Kansas Workers’ Comp Policy
Although most worker’s comp claims are not as costly as those that resulted from the accidents at the wind farm, employers should always be prepared for the worst possible scenario. A Kansas workers' compensation insurance policy that is designed specifically to protect businesses in your industry offers you the best line of defense.
An independent insurance agent who is well-versed in the many aspects of business insurance will be familiar with Kansas workers' compensation laws. These agents can help you review policies and quotes from reputable insurance companies so that you can ensure that your business is in compliance with Kansas workers' compensation laws. Find an agent near you to learn more.