An employee at a metal recycling plant in Concord, NH was recently killed in a forklift accident. The 33-year-old man was crushed by a forklift while working at Schnitzer Steel, a scrap metal processor. Unfortunately, employee injuries are all too common. No matter how safe your workplace is, accidents can happen. Employees can slip and break an ankle in an office or suffer repetitive motion injuries in all kinds of environments. Serious—even fatal—accidents happen more often than you might think.
In New Hampshire, workers’ compensation insurance is designed to help in all of these situations. New Hampshire workers’ compensation insurance provides wage replacement, medical care, and death benefits when an employee is injured or becomes ill on the job. Workmans’ comp coverage compensates employees for their injuries and protects employers from potentially devastating costs.
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New Hampshire Workers’ Compensation Laws
Workers’ compensation insurance is required by the state of New Hampshire. Any employer with one or more full- or part-time employees is required to provide workers’ compensation coverage. Failure to comply may result in fines of up to $100 per employee per day for the employer. Employers are responsible for obtaining New Hampshire workers’ compensation insurance before hiring any employee.
Every covered employee has the right to receive workmans’ comp benefits after a workplace injury but forfeits the right to sue the employer for the costs related to that injury. New Hampshire is a no-fault workers’ compensation state; benefits are payable regardless of who is at fault for an injury that occurs in the workplace.
The Basics of New Hampshire Workers’ Compensation
Who Is Covered?
Companies with more than one full- or part-time employee are required to purchase New Hampshire workers’ compensation insurance. There are no exceptions for family members of employers or for non-profit organizations. However, sole proprietors, partners, and self-employed persons do not need to purchase workers’ compensation insurance for themselves, but they may choose to do so if they wish. Sole proprietors or partners who are operating as subcontractors, even if they do not have employees, may be required by a general contractor to carry workers’ compensation coverage for themselves.
Corporate officers and LLC members are automatically included in workers’ compensation coverage but can elect to exempt themselves. A corporation or LLC may choose to exclude up to three executive officers, but this rule does not apply if the person engages in on-site construction work. Exemptions are not automatic and must be applied for. Volunteer workers are exempt from New Hampshire workers’ compensation insurance.
What Is Covered?
New Hampshire workers’ compensation insurance provides medical payments, temporary or partial disability benefits, weekly indemnity benefits, and death benefits for the injured employee (or their dependents in the case of death benefits), regardless of who is at fault for the injury. Benefits are available to full- and part-time workers as well as temporary, immigrant, and even undocumented workers.
Where Can You Buy It?
New Hampshire employers must purchase workmans’ comp coverage through an insurance agent or insurance company licensed to sell it in New Hampshire. Employers can seek approval to self-insure from the New Hampshire Commissioner of Labor. Employers who cannot purchase coverage in the open market can obtain New Hampshire workers’ compensation insurance under the assigned risk program of the National Council for Compensation Insurance (NCCI), an independent workers’ compensation rating and data collection bureau.
How Much Does New Hampshire Workers’ Compensation Insurance Cost?
New Hampshire workmans’ comp insurance costs more for high-hazard industries than for low-hazard industries. Workers’ compensation insurance premiums are determined by the number of employees an employer has, the types of jobs performed, and the employer’s history of accidents and workers’ compensation claims. In New Hampshire, the NCCI assigns classification codes to each occupation. Each class code is then assigned a base rate for workers’ compensation insurance. To determine the premium, the annual payroll at the beginning of the policy period is divided by 100 and then multiplied by the base rate. For example:
- Classification Code 5474: Painting
- Base Rate: $8.17
- Employer payroll: $100,000
- Premium calculation: $8.17 per $100 of employer payroll (or 8.17% of payroll)
- Estimated annual premium: $8,170.00
A painting company may have employees in more than one classification. All of an employer’s applicable classifications and related premiums will be combined to determine its annual New Hampshire workers’ compensation insurance premium. New Hampshire is a competitive workers’ compensation state. This means that insurance companies can charge different premiums and compete for your business based on price. But premiums are approved and regulated by the New Hampshire Workers’ Compensation Division and must remain within the guidelines recommended by the NCCI.
New Hampshire Workers’ Compensation Recent Base Rate Examples
New Hampshire workmans’ comp rates have been lower than the national average, but have risen in recent years. The NCCI sets a low rate and a high rate for each New Hampshire class code. Insurance companies can offer certain discounts and credits to eligible companies, so rates will vary by insurance company.
Here are some sample base rates (rate per $100 of employer payroll) as of recent years:
- 0042 Landscaping: $8.40
- 5183 Plumbing: $4.26
- 5427 Carpentry: $8.38
- 8017 Retail Store: $1.72
- 8810 Clerical: $0.18
- 9082 Restaurant: $1.90
What Is Experience Rating and How Does It Affect Your Premium?
Experience rating makes a significant difference in your New Hampshire workers’ compensation premiums. Once you establish a claims history, an experience modification factor, or experience mod, can be applied to your workers’ compensation premium calculation. It increases or decreases your premium for a given year. Your mod is a numerical representation of your actual losses compared to expected losses (your losses are compared to those for similarly sized businesses in your industry). The mod represents a debit or credit that is applied to your New Hampshire workers’ compensation premium.
- A mod of 1.0 is considered to be average and does not impact your premium. 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 your premium goes up.
- A mod less than 1.0 is a credit mod. This means your losses were better than expected, and your premium goes down.
The formula used to determine your experience-rated workers’ compensation premium is:
- Base Rate X Payroll X Mod = Premium
Here are some examples of experience-rated 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
Employers in New Hampshire are eligible for experience rating when they meet these requirements:
- $11,000 in policy premium generated during the last year or last two years, or
- $5,500 average policy premium generated for more than two years
How to Find New Hampshire Workers’ Compensation Insurance
The examples and calculations offered in this article are highly simplified. The best way to obtain quotes and find the true cost of New Hampshire workers’ compensation insurance is to work with an experienced independent insurance agent. Purchasing workers’ compensation is complex, and an independent insurance agent can help you understand New Hampshire’s laws and get the coverage you need to protect your employees and your business.
Start your search for a local agent now.