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What type of insurance do you need?
Exceptions are rare when it comes to Utah workers’ compensation insurance. Unless your business is a sole proprietorship or partnership with no other employees, you will have to carry workers’ compensation insurance for your employees. The following are exempt from the workers’ compensation requirement:
The state requirements related to number of employees and workers' comp coverage are:
Employers can purchase Utah workers’ compensation insurance from the Utah Workers’ Compensation Fund (WCF) or from a carrier that is licensed to sell workers’ compensation in Utah. The WCF is the “insurer of last resort” for employers who have difficulty obtaining coverage from other carriers.
Utah employers can self-insure with approval from the Utah Labor Commission.
Utah workers’ compensation insurance provides benefits for work-related injuries and illnesses. It pays for medical care, wage replacement and death benefits.
Benefits are available for sudden falls and accidents as well as injuries and illnesses that take longer to present themselves, such as repetitive motion injuries or back injuries.
The National Council on Compensation Insurance (NCCI) assigns a risk classification code to every occupation in the state. Each classification code represents employers with similar exposures. The codes are used to classify workers’ compensation rates, based on the loss experience of employers within each code. In the example below, you can see that masons in Utah use the classification code 5022.
Example: Mason = 5022
Base Rate: Each classification code is assigned a specific dollar amount — or base rate — that is determined by how hazardous the occupation is for workers. The base rate is used to determine an individual employer’s full workers’ compensation premium. Base rates are revised each year.
In the example below, we use the base rate of $5.93 for a mason in Utah.
Example: Mason = 5.93%
Base rate % x (Payroll/100)
Step 1: $100,000 Payroll / $100 = 1,000
Step 2: 1,000 X 5.93 (base rate) = 5,930
Estimated workers' comp premium: $5,930.00
The state of Utah allows employers to participate in an experience modifier program, which can lower or raise your premium rate. Experience modifiers are assigned based on your accident and claim record in comparison with other businesses in your industry that are roughly the same size. E-mods, as they are commonly known, are applied to your premium rate as a credit or debit.
Average mod: 1.0 = does not impact premium
Debit mod: Greater than 1.0 = premiums go up
Credit mod: Less than 1.0 = premiums go down
Employers will receive an experience modification factor when they have:
If your workers’ compensation policy is experience-rated, your premiums are determined by:
Base rate x Payroll x Mod
Healthcare $1,825 Per $100,000 payroll
Retail Trade $2,850 Per $100,000 payroll
Construction $7,430 Per $100,000 payroll