On October 27, 2015, in Ladysmith, Wisconsin, a machine operator at the Clearwater Paper Corporation was fatally injured as he serviced a high-speed conveyor belt. According to federal worker data, machine hazards are one of the most frequently cited worker safety violations.
Accidents in the workplace can happen at any time, and carrying the proper workers’ compensation coverage ensures that your injured employee is properly taken care of and their medical expenses are covered. In addition, it protects your business from expensive lawsuits.
Workers’ compensation insurance is required in the state of Wisconsin, and it provides benefits not only for sudden accidents, but also for injuries that occur over a longer period, such as back or neck injuries. Workers’ compensation policies also pay out a death benefit in the event that a death occurs at the workplace.
Wisconsin requires any business that meets any the following conditions to carry Wisconsin workmans' compensation insurance, according to the Wisconsin Department of Workforce Development website:
Like most other states, Wisconsin’s workers’ compensation program is a no-fault system, which means that employees are guaranteed benefits if they are injured on the job regardless of who was at fault. In exchange for these guaranteed benefits, employees give up the right to sue their employers for injuries or illnesses that are caused by the workplace, except in very specific circumstances.
What Is Covered?
A workers’ compensation policy will pay out benefits to all employees who are hurt while performing their job. It covers sudden falls and accidents that result in injuries as well as conditions that may take longer to manifest, inculding repetitive stress injuries and back and neck injuries, and illnesses, such as cancer, that are caused by working conditions.
Workers’ compensation insurance will pay for medical costs, lost wages, and other expenses related to the injuries, such as physical therapy, and job retraining if necessary. A workers’ compensation plan will also pay out a death benefit or a lump sum if a permanent disfigurement occurs.
Who Is Covered?
All employees are covered by a Wisconsin workmans' comp policy with a few exceptions, which include: Volunteers; domestic workers; home-care providers; and, in some cases, real estate agents and independent contractors.
Workers’ compensation coverage protects your employees regardless of where the injury takes place, as long as they are performing a work duty at the time. Employees who are traveling for work, working at a client site, or even at an after hours work event are covered.
Where Can I Buy It?
Wisconsin does not have a state-funded insurer and only allows private insurance companies to write workers’ compensation policies. Currently there are about 300 insurers selling workers’ compensation insurance in the Badger State.
Workers’ compensation insurance can be complicated, so it is best to talk to an insurance professional to make sure you are fully covered and in compliance with all state laws.
Wisconsin is an independent state and doesn’t use the National Council on Compensation Insurance (NCCI) classification system, so the Department of Workforce Development sets employee classification codes, base rates and experience modifiers.
Base premium rates are set to reflect the various hazards of a particular job, which means that more hazardous professions will carry a higher premium than jobs where accidents are less likely to happen. Maintaining a safe work place and keeping accidents to a minimum can also help lower your workers’ compensation premium.
Class codes are used to identify the various classes of workers and set a base rate for their workers’ compensation premium. These rates are reviewed on a yearly basis, so there is a good chance your workers’ comp rates will fluctuate yearly.
Here is an example of how a base rate works in Wisconsin:
Wisconsin Classification Code: 5083 Plumbing
Base Rate: $5.71
Employer Payroll: Example: $100,000
Premium Calculation: $5.71 per $100 or 5.71% of payroll
Estimated Annual Premium: $5,710
The majority of companies will have more than one class of employees working for their business. The plumbing business in this example would more than likely have customer service reps, salespeople and admin staff. These different employee types would all be assigned different class codes and base premiums.
In order to calculate the total premium for a business, the various class codes and premiums would have to be totaled.
In Wisconsin, insurance companies are allowed to offer discounts on their workers’ compensation premiums.
Discounts will vary by insurer, but here are a few of the more commonly offered discounts:
Here are just a few base rate examples for different class codes for 2016. Keep in mind that base rates vary from year to year.
0042 Landscaping $11.35
3632 Machine Shop $4.36
3821 Salvage Yard $11.58
5022 Masonry $13.29
5183 Plumbing $5.71
5190 Electrical $4.96
5221 Concrete Construction $8.90
5437 Carpentry/Trim $12.71
5474 Painting $14.48
5478 Flooring $16.73
Like most other states, Wisconsin has an experience modifier, or e-mod, program that is applied to an employer’s premium and will raise or lower their workers’ compensation premium. E-mod programs are designed to reward employers who have great safety records and penalize businesses that have a number of accidents and claims on their record.
Basically, an e-mod works like this. If your business has a higher claim rate or number of accidents than other businesses of a similar size in your industry, you will be issued a debit e-mod, which will raise your premium. If you have a stellar safety record and fewer claims than other businesses in your industry, you will be given a credit e-mod, which will lower your workers’ compensation premium.
A business that is new to the e-mod program is typically issued a rating of 1.00, which is considered neutral. If you experience a number of accidents or claims, your e-mod number will go above 1.00, which is considered a debit. If you stay claim-free, your e-mod number will drop below 1.00, resulting in a credit.
Once your business is part of the e-mod program, your total workers’ comp premium will be calculated by multiplying the base rate by your experience modifier and then your total payroll.
Your e-mod rating is one factor of your workers’ compensation program that is under your direct control. Implementing programs such as a drug-free workplace or fall prevention can positively affect your accident rates, which can result in an e-mod credit.
In most cases, a number of small claims will have a more negative affect than one large claim.
Workers’ compensation insurance is a complicated product and it is always best to talk to an expert when shopping for coverage. A Trusted Choice® independent agent can help you find the perfect policy for your business as well as help you nail down any discounts that you are eligible to receive.
Get started today, contact a Trusted Choice agent now to find the best workers’ compensation policy for your business.