Workers Compensation System in Utah is Strong
The Utah Workers Compensation System is very unique. The system of provides for the ‘Exclusive Remedy’ to both businesses and employees within the state and it does it in a much better way than most states. The results of the unique system are Utah Businesses pay some of the lowest rates for workers comp insurance of any state across the country. Workers Compensation Rates in Utah for 2019 have only four states who pay less for workers comp coverage than the state of Utah. Those states are Arkansas, Indiana, North Dakota, and West Virginia. Each of these states except Indiana have a noticeably smaller GDP than Utah. Utah has some things working in its favor that help the market develop in a positive way for the business community in Utah. Here is a detailed description of the uniqueness of Utahs’ Workers Compensation System, what the Utah Workers Compensation System does well, and some additional ways Utah Business Owners can Maximize Savings.
How is the Utah Workers Compensation System Unique?
In the state of Utah all employers are required to carry Workers’ Compensation Coverage. If your business is a sole proprietorship or a partnership and you have no employees other than the sole proprietor or partner than you are not required to carry coverage. If these types of businesses interact with general contractors than either the business or the general contractor will need to provide a certificate of insurance that the contractor is covered in order to be in compliance with the state Department of Insurance.
Utah partners with the National Council on Compensation Insurance (NCCI) to establish classification codes and to determine pure premium rates. Most states who partner with NCCI enjoy more competitive rates on workers comp coverage. Utah is one of those states. The state provider within the state of Utah is extremely strong and this competition from the state provider forces all other carriers who offer coverage within the state to compete for business within the state.
What does the Utah Workers Compensation System do well?
Public Private Partnership
NCCI and WCF partner within the state of Utah to create one of the strongest workers compensation systems in the country. NCCI creates classification codes and recommended pure premium rates. WCF is the state provider within the state and they commonly dominate between 55 and 60 percent of the market.
Utah has a Strong State Fund
The state fund provider in the state of Utah is called the Workers Compensation Fund (WCF). Depending upon the year, WCF controls between 55 and 60 percent of the market for Workers Compensation Utah. The next largest market share by another insurance carrier is typically just over 3 percent of the market. This domination of the marketplace allows WCF to control the cost of workers compensation throughout the state. Any carrier who wants to offer coverage in the state of Utah has to compete for business with WCF. This competition forces all carriers offering coverage within the state to keep their price for premium low in order to compete for business. The result is the business community has some of the lowest rates for work comp coverage of any state in the country.
House Bill 288
In 2018, House Bill 288 (HB288) passed the state legislature. HB288 makes it unlawful for employer to interfere with an employee’s ability to seek workers’ compensation benefits, or to retaliate against employee for seeking benefits. This bill establish fines of up to $5,000 for each individual violation.
Senate Bill 75
Senate Bill 75 (SB75) allows the Division of Industrial Accidents to waive the statutory penalty for failure to purchase workers’ compensation insurance. SB75 states that the violation must be the employer’s first violation and the period of noncompliance must be less than 180 days. If this is the case, the employer must secure coverage and prove no injury was reported to the Division during the period of noncompliance. This allows businesses one chance to go without coverage and still get a waiver. This is not the case for business that are serial non-compliers. Also, when a reduction is granted, the penalty will be reduced by the amount equal to the premium the employer would have paid for workers’ compensation insurance” based on the supplied payroll records.
What can businesses do to maximize savings
Safety Programs
Safety Programs are the single biggest move any business can make to positively impact how much the business pays for workers compensation insurance premium. Safety Programs, if well documented and well executed can limit the frequency and severity of accidents that happen to employees while at work. When a business files less claims and the claims that it does file are less severe, the insurance carrier is more likely to dig deep for additional credits and discounts when quoting coverage.
Drug and Alcohol Policies
In addition to a well thought out safety program, it is equally important to have a Drug and Alcohol Policy policy in place to keep all employees healthy and happy. Depending upon the type of work your business does and the training level of your employees, drug testing may need to be done either as a requirement for a job offer or as a regular part of your business plan. Partnering with an experienced risk management professional can help your leadership team develop a policy that is effective for your business.
Working With Inured Employees
If a business stays in business long enough it is going to experience an injured employee. How you work with the employee through the return to work process will go a long way towards the success of your business. Helping them get to the correct facility to get the best care and informing them of the process to get wage replacement benefits is important to keeping the injured worker and other employees happy. Remember, the other employees are watching how you treat an injured employee and they more than likely are wondering how they will be treated if something happens to them. Communicating with everyone involved in the process is important to help your employee get the medical care they deserve and get them back on the job as quickly as possible.
Return to work
A return to work program should be a part of any effective safety program. When executed correctly, a return to work program can help get employees back to work quicker and keep insurance claim from getting out of control. This is important because humans are creatures of habit. The longer an injured employee stays off the job, the longer they have to develop new habits outside of their normal work routine. The longer they stay off the job, the more likely they are to never return to normal permanent work. This is when a workers compensation claim can get out of hand and have lasting impact on the business experience modification rating.
