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What are the benefits to employees?
The Workers' Disability Compensation Act provides a strict level of benefits that an individual can receive as the result of a job-related injury. An injured worker can receive wage-loss benefits, medical benefits, and rehabilitation benefits.
Wage loss benefits are calculated at 80% of the "after-tax" average weekly wage, subject to a maximum limit. The act provides that no compensation be paid for a job-related disability that does not last for at least one week. Benefits could conceivably continue indefinitely depending upon the nature of the disability. Typically once an injured employee returns to their original job, benefits are terminated.
Medical benefits are provided for all care and procedures related to the injury. Benefits could continue indefinitely depending upon the necessary treatment.
Vocational rehabilitation benefits are provided if it is necessary to find new employment due to medical restrictions or if changes are necessary in a current job.
Are there benefits for employers?
The Workers' Disability Compensation Act provides protection to employers as well as workers. If an injury occurs in covered employment, the worker is automatically entitled to certain wage loss, medical and rehabilitation benefits. The worker, however, is limited to those benefits. The employer is protected from any other lawsuit by that worker.
Can I go without workers' compensation insurance?
If your company:
- employs three or more workers at a time; or
- has employed at least one worker for at least 35 hours for a period of 13 weeks or more,
you must provide workers' compensation coverage. Without it, you may face severe penalties including business shut-down, fines and imprisonment.
If you establish a business in such a way that it is exempt from coverage of the Act, you are giving up the protection from civil liability that is afforded by the Workers' Disability Compensation Act (see previous question). This factor should be taken into consideration along with the potential costs of workers' compensation.
How is the cost of my workers' compensation coverage determined?
Basically, your workers’ compensation premium is determined by these factors:
1. Class Code. An employee's work-related exposure to injury (i.e. what your employees are doing, the level of risk for injury) determines his class code. Class codes with greater risk of serious injury (example: a steel worker) are charged higher rates than those with less risk (example: a secretary).
2. Payroll. Manual premium is developed by dividing payroll by 100, then multiplying by the rate for the class code. Each class code is calculated separately.
3. Previous experience. All employers develop an "experience modification," which compares their performance over what is expected over a three-year period. If you perform better than expected, your "mod" will reduce your premium. If it is worse than expected, your "mod" will increase your premium.
4. Premium discounts. Additional credits or debits may be applied to your premium at the insurance carrier's discretion.
5. Audit. At the end of each policy period, an audit will confirm actual payroll in each class code. This may result in owing additional premium, or a refund for overpayment.
Information courtesy of Regency Insurance Group, program manager for MRA insurance programs. www.regency-group.com, or call Regency at (800) 686-6640. | 
