Illinois has strict workers’ compensation requirements to protect both employees and employers. However, there are still ways of managing your costs. Keep reading to learn more.
Who Has to Carry Workers’ Compensation In Illinois?
Illinois requires employers to have workers’ compensation for every employee in Illinois. That means if you have just one part-time employee, you need to carry workers’ compensation coverage. The main exception is that business owners and partners do not need to carry workers’ compensation for themselves. However, the exception to the exception is that in high-risk industries, such as construction, even owners and partners need to be covered by workers’ compensation.
Keep in mind that if you’re based in Illinois but have employees in other states, you’ll need to follow the rules for each state your employees are in.
What Does Workers’ Compensation Insurance Cover?
Workers’ compensation covers workplace injuries ranging from very minor to fatal accidents. This could be anything from a paper cut that gets infected and needs a doctor’s attention to a fatal fall on a construction site. Workers’ compensation benefits cover things like medical bills, lost wages, and rehabilitation.
How Does Illinois Set Workers Compensation Rates?
You can’t shop for workers’ compensation rates. Just like your electric bill, Illinois oversees workers’ compensation rates by determining what’s needed to pay claims plus a reasonable fee to insurance companies for managing the program.
Rates are classified based on industry and job. The more chance there is for workers to get hurt in a given industry or job, the higher the rate is for that industry or job. To make sure you’re paying the right amount, make sure you choose the correct industry and classify each employee correctly. For example, if you’re a construction company, don’t classify your receptionist as a construction worker, since the rate for a receptionist will be lower.
How Does Your Claims History Impact Your Rate?
The most important factor in your worker’s compensation rates that you can control is your claims history. Every employer starts with the base rate but can pay more or less depending on how many claims you have. If you have an average number of claims, you pay the base rate. If your claims are above average or below average, you pay more or less accordingly.
To figure out your actual rate, you need your Experience Modification Rate. A mod of 1.0 means average claims, above 1.0 means above average claims, and below 1.0 means below average claims. Multiply the mod by the table rate for your final rate.
How Can You Get Lower Workers’ Compensation Rates in Illinois?
If you want to get lower workers’ compensation rates, you need to reduce your number of claims. That means promoting safety in your workplace by providing proper training and incentives to avoid accidents. Your insurance agent can help you find ways to improve safety. Talk to AFI Insurance today.