An employee at Dillard's department store in Oklahoma was injured in 2014 while lifting shoeboxes. Her neck and shoulder injury caused her a lot of pain and eventually required surgery. Dillard's, which is self-insured for workers' compensation, covered her medical costs as part of their workers’ compensation program.
Injuries and accidents can happen at any time and if your business isn’t carrying a workers’ compensation insurance policy, you can end up on the wrong side of a very expensive lawsuit.
Almost every state in the country requires every employer to carry a worker’s compensation policy, and Oklahoma is no exception. Every business in the state that has at least one employee must carry a workers’ compensation policy. There are a few exceptions to this requirement:
In Oklahoma, like most other states, the workers’ compensation program is a no-fault system, which means that employees are guaranteed benefits under the plan regardless of who was at fault for the accident and injury. A workers’ compensation program exempts employers from costly employee lawsuits in exchange for the guaranteed benefits.
What Is Covered?
An Oklahoma workmans' compensation policy will pay plan benefits to any employee who is injured at work, regardless of who was at fault. The protection these policies offer extends not only to sudden falls and accidents, but also to injuries that occur over a longer period of time such as repetitive stress injuries or neck and back pain.
Long-term illnesses such as cancer that is caused by workplace conditions are covered, and all workers’ compensation policies pay out a death benefit in the event an employee is fatally injured, and lump sum payments for any permanent disfigurement.
Oklahoma workers’ compensation policies cover all medical costs associated with an injury, including treatments such as physical therapy if necessary. These policies typically offer job retraining if the employee is not able to return to their job due to an injury.
Who Is Covered?
All Oklahoma workers are required to be covered by a workers’ compensation policy. There are a number of exceptions listed in the Oklahoma Workers’ Compensation Guide for Employers, including the following:
Workers’ compensation insurance will also cover your employees when they are out of the office as long as they are performing work-related duties. This means that employees who are traveling for work, are at an after-hours networking event, or working at a client site are fully protected by your policy.
Where Can I Buy It?
Employers in Oklahoma can purchase a workers’ compensation policy from any of the private insurers that are licensed to writer policies in the state. It is also possible for employers to self-insure, but they must obtain approval from the Workers’ Compensation Commission.
It’s important to remember that workers’ compensation insurance is a complicated product. You should consult with an insurance expert to make sure that you are fully covered, in compliance with all state laws and buying the best policy for your particular business.
Oklahoma uses the class codes set by the National Council on Compensation Insurance (NCCI) and base rates are set by the Oklahoma Workers' Compensation Court.
Employee class codes are used to identify the various classes of employees for each business. Base premium rates are assigned to each class code and they are designed to reflect the dangers of the job. A high-risk job will carry a higher base premium than a job that is considered less dangerous and has a lower accident rate.
Hopefully this quick example will clarify how class codes and base rates are used to set your workers’ compensation premium.
Oklahoma Classification Code: 5183 Masonry Plumbing
Employer Payroll: Example: $100,000
Premium Calculation: $3.90 per $100 or 3.90% of payroll.
Estimated Annual Premium: $3,900
In order to calculate the premium for your employees, you will need to
multiply the base rate by your payroll for all employees that fall under
class code 5183.
The majority of businesses have more than one class of employee. In this example, a plumbing company would have accounting sales, and administrative staff in addition to their plumbers. All of the different employees would have different class codes.
In order to properly calculate your entire workers’ compensation premium, the various class codes and accompanying premiums would have to be totaled.
Insurers in Oklahoma can offer discounts to help sell their policies. Discounts will vary by insurer, but a couple of the more common discounts are listed below:
Here are just a few base rate examples for different class codes for 2016. These premium rates are applied to every $100 of wages for each employee.
0042 Landscaping $5.69
3632 Machine Shop $3.10
3821 Salvage Yard $4.88
5022 Masonry $6.68
5183 Plumbing $3.90
5190 Electrical $3.86
5221 Concrete Construction $4.21
Oklahoma, like most states, has an experience modifier or e-mod program, which can help lower your workers’ compensation insurance costs if you control your accident and claim rates. If you experience higher-than-normal claims or accidents, an experience mod will raise your workers’ compensation premium.
The Oklahoma e-mod program compares your accident and claim rate with other businesses in the same industry that are roughly the same size. If your business has experienced fewer claims you will be issued a e-mod credit, which will lower your premium. If your claim rate is higher, an e-mod debit will be applied to your account, which will raise your workers’ compensation premium.
A business that is new to the e-mod program will be issued an e-mod rating of 1.0, which is neutral. If you have a bad year for accidents and claims, your e-mod rating will be headed above 1.0, raising your premiums. If you have a year free of claims and accidents, your e-mod rating will drop below 1.0, which will lower your premium.
Once your e-mod is established, you will need to multiply your base rate by your e-mod and then multiply that by the total payroll to calculate your workers’ comp premium.
The e-mod rating is one aspect of your workers’ compensation costs that you have direct control over. Maintaining a safe workplace and controlling your accidents and claims can result in a big drop in your workers’ compensation insurance costs.
It’s important to remember that with workers’ compensation insurance, one large claim will often have a less negative affect on your e-mod number than numerous small claims.
Workers’ compensation insurance is a complicated product and talking with an expert before you purchase a policy is always a good idea. A Trusted Choice® independent agent can answer any questions you have about the Oklahoma workers’ comp program as well as do all the work of shopping for the perfect policy.
A Trusted Choice agent will present the best options for your business and help make sure your business is getting all of the discounts it’s qualified to receive.
Start shopping now, contact a Trusted Choice agent to find a great workers’ compensation policy for your business.