Employees sometimes get injured on the job. When this happens, workers’ compensation insurance can cover the associated costs. This important insurance protects employees and business owners alike by preventing accidents from resulting in unmanageable expenses.
If you are among the many employers in Boston, an independent insurance agent can help you find the best and most affordable workers’ compensation policy to cover your business. Contact an insurance agent near you to learn more.
Are Businesses in Boston Required to Have Workers’ Compensation Insurance?
Virtually all Boston businesses are required by Massachusetts law to carry worker’s compensation insurance. The state mandates that you must carry this insurance if you have at least one employee, even if that person only works part time.
There are only a few exceptions. You are not required to carry coverage for the following workers.
- Domestic help who work less than 16 hours a week
- Sole proprietors, partners, and LLC members as long as they are not also considered employees
Out-of-state employers are required to carry coverage for all employees working in the Commonwealth.
Failure to carry required coverage opens your business up to potential lawsuits. It can also result in your business being issued a Stop-Work Order (SWO) and a fine of $100 a day, including weekends and holidays, from the time the SWO is issued until insurance coverage starts and the fine is paid in full.
Additionally, business owners who are issued SWOs can face criminal charges, fines, and up to one year in prison. In other words, it is not worth it to skip out on this required coverage.
How Much Does Workers’ Compensation Insurance Cost in Boston?
The good news for employers in Boston is that Massachusetts is the fourth-least expensive state in the country when it comes to workers’ compensation insurance. Rates can vary significantly from one business to the next. This is because costs are calculated based mainly on these factors.
- Your company’s overall payroll amount
- The number of employees you have
- The types of jobs your employees do and the likelihood they will be hurt while doing them
- Your company’s claims history and safety record
Every occupation is assigned a classification code and coverage rates per every $100 in payroll for each of these class codes are regulated by the Commonwealth’s Workers’ Compensation Rating and Inspection Bureau (WCRIBMA).
Insurance companies are required to use these designated base rates when calculating costs, but they are permitted to be competitive by offering their policyholders discounts, credits, and incentives. That’s why it pays to compare rates before making a purchase.
Base Rate Examples
Let’s take a look at the base rates per every $50,000 in employee payroll for three jobs commonly found in Boston, MA.
- Roofing contractors: $7,120 a year
- Auto service and repair mechanics: $590 a year
- Clerical and office employees: $15/year
As you can see, the rates for these different jobs vary significantly. Because office employees have a very low risk of being injured on the job, rates for coverage are nominal. However, because roofers risk significant injuries, rates are much higher.
The easiest way to find out how much a workers’ compensation policy will cost for your business is to request a few customized quotes. A local independent insurance agent can do this on your behalf.
What Are Experience Modifiers?
Experience modifiers are assigned to certain companies and are regulated by the NCCI. In Massachusetts, you can qualify for an experience modification factor (or X-mod) if your company has spent more than $11,000 in premiums over the last two years.
If you qualify for an experience modifier, it must be used when calculating your rates.
The experience modifier is a number ranging from 0 to 2. If your company’s safety record is comparable to the average record for businesses in your industry sector, your factor will be 1. If your safety record is better, it will be less than one, and if worse, it will be greater than 1.
Therefore, if your company has a very solid safety rating and your modification factor is .85, your company will be assessed at 85% of the base rate for each job. So, for example, the base rate for the roofer mentioned above would drop from $7,120 to $6,062.
Conversely, if your company’s safety record isn’t very good and you’ve experienced a few serious employee injuries in the past couple years, your rating may be 1.15, which would mean that your base rates would increase 15%, so the roofer’s costs would go from $7,120 to $8,188.
That is why maintaining a safe workplace is so important.
What Does Boston Workers’ Compensation Insurance Cover?
Workers’ compensation insurance is designed to cover the various costs that are associated with on-the-job injuries and occupational illnesses. You can expect your policy to cover the following.
- Medical treatments: Workers’ compensation covers all necessary medical care related to occupational illnesses and injuries. This includes ambulance rides, hospital stays, medical appointments, follow-up care, prescription medications, physical therapy, and other treatments. Employees will need to begin their care with an authorized provider but may choose their own doctor for follow-up.
- Travel reimbursement: Workers’ compensation can reimburse employees for miles driven to and from medical appointments and the pharmacy. The current rate for reimbursement in Massachusetts is 45 cents per mile.
- Temporary total disability: If an employee needs to take more than six days to recuperate from a work-related injury, they will be able to collect a weekly benefit of 60% of their weekly pay until they can return to work. If they must remain out of work for at least 21 days, the first six days will be covered, otherwise, they are not. Benefits can continue until the employee can return to work for up to 156 weeks.
- Temporary partial disability: If an employee’s injury enables them to continue working but in a limited capacity, workers’ compensation can make up 75% of their difference in pay if they must accept lower wages until they can return to working at full capacity for up to 260 weeks.
- Permanent disability: If a work-related injury is so severe that the injured worker will be unable to ever return to their job, workers’ compensation insurance can provide them with a weekly benefit of two-thirds of their average wage for as long as they are disabled. These benefits come with an annual cost-of-living increase.
- Survivor benefits: If a work-related injury or illness leads to a fatality, workers’ compensation can ease the financial burden on surviving family member by covering burial expenses up to $10,000 and by providing the employee’s spouse and dependents with compensation of two-thirds of the employee’s average weekly wage until the spouse is remarried, at which point all eligible children will receive a benefit of $60 a week.
Weekly disability benefits cannot exceed the state’s average weekly wage, which is adjusted annually. As of October 1, 2020, the maximum weekly disability payment is set at $1,487.78.
You can learn more about workers’ compensation insurance by speaking with an independent insurance agent in Boston.
What Does Boston Workers’ Compensation Insurance Not Cover?
There are times that workers’ compensation claims may be denied. This may happen if a claim is filed for a non-covered event such as the following.
- Injuries that occur when the employee is under the influence of drugs or alcohol.
- Injuries that occur outside of working hours.
- Injuries or illnesses related to pre-existing conditions.
- Injuries incurred by workers who are not official employees of the insured.
If you believe that your claim was unjustly denied, you can appeal the decision to the Massachusetts Department of Industrial Accidents.
Where Can Boston Business Owners Buy Workers’ Compensation Coverage?
Workers’ compensation insurance can be purchased through any of the many commercial providers that are authorized to sell Massachusetts workers’ compensation policies.
High-risk businesses that are unable to obtain coverage through a commercial provider can purchase an assigned risk policy through the Workers’ Compensation Rating and Inspection Bureau. These policies will be a lot more expensive, but coverage is guaranteed.
Alternatively, your company may opt to self-insure, though you will need to apply for approval and demonstrate that your business has the financial means to do so.
Most businesses in Boston purchase coverage through a commercial provider.
How to Find the Best Workers’ Compensation Insurance in Boston, MA
Let an independent insurance agent help you find the right workers’ compensation policy to cover your Boston business. These agents can obtain customized quotes from a selection of top-rated insurance providers that specialize in covering businesses like yours. That way, you can be sure you are getting the coverage you need at a competitive price.
Discover how easy it can be to find an ideal workers’ compensation policy for your business. Contact an insurance agent near you to get started.
TrustedChoice.com Article | Reviewed by Jeffrey Green
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