Iowa workers' compensation insurance

In Iowa, almost every business that has employees is required to purchase workers' compensation insurance. However, certain categories of employees are exempt from workers’ comp coverage. Exemptions include:

• Domestic and casual employees making less than $1,500 from their employer in the 12 consecutive months before the injury
• Agricultural employees in companies with a cash payroll of less than $2,500 in the calendar year before the injury
• People working for a relative
• Exchange labor in agriculture
• The president, vice president, secretary, or treasurer of a family farm corporation and their spouses, along with the parents, brothers, sisters, children, stepchildren, and their spouses of either the officers or their spouses
• Police officers and firefighters who are entitled to benefits under a firefighter pension fund
• Employees who are entitled to benefits under any rule of liability or method of compensation, for federal employees, established by the Congress of the United States

The State of Iowa does not consider proprietors, partners, and LLC members to be employees. However, they may elect to participate in workers’ comp should they wish to.

Employers with exempt employees may include them in their workers’ comp program by adding them to their workers’ compensation insurance policy.

To save money on workers' comp insurance, it's important to make sure you classify your employees correctly. Employees with desk jobs or other jobs with a low risk of injury cost less to insure. This also helps you avoid misclassification fines.

In some cases, small business owners can choose to buy pay-as-you-go workers' compensation. This type of workers' comp policy has a low upfront premium, and lets you make payments based on your actual payroll instead of estimated payroll. It's useful for businesses that hire seasonal help or have fluctuating numbers of employees.

Finally, a documented safety program can help lower workers' comp costs. A safer workplace means fewer accidents, which helps keep your premium low.

When an employee is injured in the course of employment, workers' compensation covers the cost of their medical care. It also provides disability benefits for injured workers who are recovering or who suffered a permanent impairment.

Policies usually include employer's liability insurance, which can help cover legal expenses if an employee blames their employer for an injury. However, the exclusive remedy provision in most workers' comp policies prohibits an employee from suing their employer if they accept workers' comp benefits.

Workers' compensation benefits in Iowa include:

• Medical treatment for the employee's injury
• Temporary total disability benefits
• Temporary partial disability benefits
• Healing period benefits
• Permanent partial disability benefits
• Permanent total disability benefits
• Vocational rehabilitation benefits
• Death benefits

For details, visit the Iowa Division of Workers’ Compensation (DWC) FAQ.

Violating Iowa’s workers’ compensation statute is a serious matter. If an employer fails to maintain workers’ comp insurance or to pay required benefits from its self-insurance account, the state may apply multiple civil penalties, including:

• Civil injunctions
• Revocation of insurance and self-insurance privileges
• An assessment of up to $1,000 payable to the Second Injury Fund of Iowa for not properly filing employee injury reports
• An assessment payable to the Second Injury Fund of Iowa for habitually failing to begin paying weekly benefits within 11 days
• An award to the employee of up to 50% of additional benefits for delaying or denying weekly benefits

According to Iowa Code, employers must pay death benefits when a covered employee dies from a work-related injury or illness. Individuals who depended on the employee for financial support are eligible for these benefits, the size of which will depend on whether they were wholly or partially dependent.

A surviving spouse, children under the age of 18, and disabled children of any age are considered to be wholly dependent. So are children under age 25 who can prove they were dependent on the worker. Other individuals who are mentally or physically disabled and dependent on the worker are also eligible for weekly workers’ compensation benefits.

Survivors who are wholly dependent are eligible to receive payments amounting to 80% of the deceased worker’s average weekly after-tax pay. The 80% amount is divided among all whole dependents and can’t be more than Iowa’s statewide average weekly wage. Partial dependents only receive benefits if the worker had no whole dependents.

Finally, in Iowa, the survivors of a worker who dies from a job-related injury or illness can receive a lump sum worth as much as 12 times the average weekly pay in Iowa for funeral expenses.

A workers’ compensation settlement is an agreement between the injured employee, employer, and insurer that will close out a workers’ compensation claim. This benefits both the employee and the employer.

In Iowa, settlements take two main forms:

• An agreement settlement
• A compromise settlement

An agreement settlement is one where the parties involved determine the amount and extent of compensation due related to the incident. Once they agree on this amount, they submit the details to the Iowa Workers’ Compensation Commissioner, who confirms the compensability of the claim and preserves the employee’s future rights.

A compromise settlement happens when there’s a dispute about whether the employee deserves compensation. Once the parties agree on a settlement amount, it is submitted to the state’s Workers’ Compensation Commissioner. Once approved, both parties give up any future rights to further compensation for the settled injury.

In Iowa, employees with injuries must file a workers’ comp claim no later than two years after the injury or three years after the last benefit payment.

The time limit for filing a First Report of Injury form is within four days of notice or knowledge of an injury that causes an employee to lose three days of work, permanent injury, or death.

If you are ready to explore workers’ comp insurance options for your Iowa business, start a free online application today to compare quotes from top-rated carriers.