Louisiana workers' compensation insurance

Every employer in Louisiana is required to carry workers’ compensation insurance or must be approved for self-insurance. Any employee who is full- or part-time, including seasonal staff and minors, must be covered.

The few exemptions to this are domestic employees, real estate salespeople, some people who volunteer for nonprofit organizations, certain musicians and performers, some public officials, and those covered under federal laws, such as railroad workers.

You may be required to provide coverage if you hire uninsured contractors or subcontractors to perform work which is a part of your trade or business. The state also offers an online test to determine whether a contractor should be considered an employee and entitled to workers’ compensation coverage.

If a business is owned by a sole proprietor or independent contractor who has no employees, the owner does not need to carry workers’ compensation. This would also be the case if it’s a partnership with co-owners and no employees.

Because of the high cost of medical bills, sole proprietors who work in high-risk industries should consider buying workers' comp coverage even when it's not required by law.

Employers in Louisiana have a few options when it comes to buying workers' comp insurance:

You can purchase workers' comp from a private insurer. Insureon's easy online application lets you compare quotes from top-rated insurance companies.

You can apply for self-insurance. To self-insure, employers must meet requirements and fill out an application [PDF] with the Louisiana Office of Workers' Compensation Administration.

You can purchase workers' comp from the state fund. Louisiana operates a competitive state fund operated by the Louisiana Workers’ Compensation Corporation (LWCC).

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.

Workers' compensation insurance covers the cost of medical treatment when an employee is injured on the job or develops an occupational disease. It also provides partial lost wages during the injured employee's recovery.

Policies usually include employer's liability insurance, which helps 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.

In Louisiana, workers' compensation benefits include:

• Medical benefits (surgery, prescriptions, physical therapy, and other medical care)
• Permanent partial disability benefits (for conditions such as amputation)
• Permanent total disability benefits (the employee must prove they cannot work)
• Temporary total disability benefits (usually two-thirds of the average weekly wage)
• Catastrophic injury benefits
• Vocational rehabilitation
• Death benefits

Injured workers become eligible for supplemental earnings benefits if they cannot return to work and earn at least 90% of their former wage.

Louisiana employers that fail to carry workers’ compensation insurance could be fined up to $250 per employee for the first violation and $500 per employee for each subsequent violation, up to a $10,000 maximum.

An employer can also be charged with a criminal violation for willfully failing to provide workers’ compensation insurance or for providing false information to the Louisiana Workforce Commission, the entity that oversees workers’ compensation insurance in Louisiana.

The employer could also be served an injunction requiring that it stop doing business until the correct workers’ compensation policies are obtained.

If a workers’ compensation settlement is reached, in most cases, the insurer will pay the injured worker a lump sum. Once a settlement is agreed upon, it includes disability benefits and medical coverage, and the worker can no longer make claims against the insurance company or the employer related to that accident or injury.

If a worker is already receiving workers’ compensation benefits, they can get a commutation, which means the weekly benefits could be added up and discounted to the present value (reduced by up to 8% per year), and then paid out as a lump sum. This avoids a full and final settlement.

The workers’ compensation laws in Louisiana encourage benefits to be paid on an ongoing basis rather than as a lump-sum payment.

Louisiana workers’ compensation claims must be filed within one year of the date of injury, or one year from the date that a disability was diagnosed. It can be no longer than two years following the date of the accident or injury.

The employer must report injuries with a First Report of Injury or Illness form within 10 days of knowing of an injury or illness resulting in more than one week of lost time.

Workers' comp claims disputes are mediated by the Office of Workers' Compensation.

Start a free online application today to compare workers’ compensation insurance quotes from leading U.S. carriers for your small business. Insureon’s licensed agents specialize in insurance for a variety of Louisiana businesses.