Workers comp insurance is a must-have for most Minnesota employers

Why is workers’ compensation important?

In general, workers’ compensation is a type of insurance that has benefits for both employees and employers.

For example, should a worker experience an injury or develop an occupational disease while on the job — and as a result, miss work for a period of time — a policy can provide wage-loss benefits, some medical treatment, and even disability benefits (either temporary or total). Some employees may also receive vocational rehabilitation and retraining during their recovery.

In addition, coverage can make solid business sense for employers. That’s because employers that have a workers’ compensation policy generally shield themselves from potential legal liability, should an employee experience a work-related injury or occupational illness while on the job.

Let’s find out which employers are required by law to maintain coverage.

Which employers in Minnesota must have workers’ compensation coverage?

In Minnesota, almost all employers are required to have workers‘ compensation insurance for part- time and full-time employees unless approval has been obtained from the Minnesota Department of Commerce permitting self insurance.

There is no minimum number of employees an employer must have before being required to have insurance. For example, even if an employer has just one part-time employee, they generally must provide coverage.

In addition, they are required to display the name of their insurer on a poster in a conspicuous location in the workplace, provided by the Minnesota Department of Labor and Industry.

What exceptions exist?

Though most employers must have coverage in Minnesota, some exceptions do exist:

• Are you a business without employees? If so, you are not required to carry the insurance.
• Family-run, non-incorporated businesses owned by a single person, with no employees other than immediate family members.
• Partners in business or farm operations where every employee is an immediate family member. For example, this could be a partner, a spouse, the parent, or a child of a partner.
• Closely held corporations, limited liability companies, family farms, casual employees, and household workers all have exclusions under certain conditions.

Next, let’s find out more about the types of incidents that workers’ compensation generally addresses.

What does workers’ comp generally cover?

Workers‘ compensation insurance typically covers an employee’s injuries and/or occupational illnesses that occur while on the job. A work-related injury or disease is generally a physical condition that is caused, aggravated, precipitated, or accelerated while in a work environment. Among the workers’ compensation benefits an employee may receive:

• Costs to pay for medical care related to the injury, as long as it is reasonable and deemed necessary.
• Partial wage replacement due to earnings that are lost because of an injury or illness.
• Vocational rehabilitation assistance is typically available to the employee if they are unable to return to the job they had.
• Travel mileage and parking costs to get medical treatment or for certain vocational rehabilitation activities.

How can an employer in Minnesota buy workers’ compensation?

• In general, employers in Minnesota can purchase workers’ compensation insurance from private carriers in the marketplace.
• Another option for large employers or groups of employers is to self-insure. That said, this option requires approval from the Department of Commerce. When choosing this option, the employer or company manages their own workers’ comp claims. According to Minnesota Employment and Economic Development, most large employers who are approved to self-insure their risks end up hiring a claims administration company.
• Sometimes an employer is unable to secure coverage when shopping around the open market. This can be because the company is too small or due to risks that stem from the type of business. If these circumstances arise, the employer would purchase a workers’ compensation policy through an assigned risk pool. To start the process, an employer’s first step is to call the Minnesota Workers’ Compensation Insurers’ Association at 952-897-1737 for more information on how to apply.

What are the possible penalties if an employer has no workers’ compensation?

Failure to comply with workers’ comp laws may result in fines of up to $1,000 per employee, for each week during the time the employee was not insured. In addition, the state can also prohibit the company from hiring until the proper coverage is secured. If an employee suffers an injury at a time during which insurance was not provided, the business could be ordered to pay back all workers’ compensation benefits to the state with an added penalty equal to 65% of the benefits.

Reporting workplace incidents

• • Though neither party wants this to happen, if an employee has an on-the-job incident, they should immediately report it to their supervisor.
  • Once the employer is informed about the workplace incident, the First Report of Injury (FROI) form needs to be completed. According to the claims process instructions on the First Report of Injury PDF form, if an employee needs to take three calendar days or more of leave in Minnesota, the form must be submitted to the company’s insurer within 10 days.
  • Self-insured employers have 14 days to report the injury to the Department, should an incident arise.

Fatalities and serious injuries

• Workplace fatalities and serious injuries must be reported to the Department of Labor and Industry within 48 hours by either calling the Workers’ Compensation Division Help Desk at 651-284-5005 (press 3) or 800-342-5354 (press 3) or sending an encrypted email message to helpdesk.dli@state.mn.us, to be followed by the FROI form.

Who picks the physician for employee treatment?

In most cases, an employee is able to choose their health care provider for treatment of a work-related injury. However, an employer may require that you see a designated health professional under certain circumstances.

More resources for Minnesota employers

• Minnesota Workers’ Compensation Statute and Rules
• Chapter 176, with insurance requirements
• Employee’s guide to workers’ compensation
• First report of injury form
• FAQs about workers’ compensation for employers
• Workplace poster