Montana workers' compensation insurance

The state of Montana imposes stringent workers' compensation rules on employers doing business there. Unless otherwise excluded, businesses with employees are required to provide insurance. This applies to all full-time, part-time, seasonal, and occasional employees.

Certain employees are exempt from having workers’ comp insurance, including:

• Household or domestic workers
• Real estate, securities, or insurance salespeople paid by commission
• Newspaper carriers
• Freelance writers paid by the article
• Licensed barbers or cosmetologists working via contract with a cosmetology firm
• Ministers of a church or member of a religious order

For a full list of exemptions, read the Montana workers' comp code.

Under the regulations of the Montana Employment Standards Division (ESD), the following owner types are exempt from workers’ comp coverage:

• Sole proprietors
• Partners
• LLC members
• Corporate officers

However, all of the above may choose to purchase workers' comp. This can be a smart business decision, as your health insurance provider could deny a claim for a work-related injury, leaving you with expensive medical bills.

Family members who work as employees of sole proprietors and partners are exempt as long as the business owner claims them on a federal tax return.

Before hiring an independent contractor in Montana, an employer must check to see if the person has either a state-issued IC Exemption Certificate from the Montana Department of Labor and Industry (DLI) or proof of having workers’ compensation insurance.

Without this documentation, the business owner may be held financially responsible for any injuries an independent contractor suffers on the job.

Additionally, here's what your workers' comp policy won't cover:

• Injuries caused by intoxication, drugs, or company policy violations
• Injuries claimed after a firing or layoff
• Wages for a replacement worker
• Occupational Safety and Health Administration (OSHA) fines

Insurance providers use a specific formula for calculating workers' comp premiums:

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 an estimated payroll. It's useful for businesses that hire seasonal help or have fluctuating numbers of employees.

A ghost policy is a cheap option in some states, however they aren't allowed in Montana. A ghost policy is a workers' comp policy in name only. It provides no protection or medical benefits, but can fulfill contractual requirements for a workers' comp certificate at a reduced price.

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 care for work-related injuries and occupational illnesses. It also provides wage-loss benefits while the employee recovers, typically equal to two-thirds of their gross wages.

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 Montana include:

• Medical benefits
• Temporary partial disability benefits (TPD)
• Temporary total disability benefits (TTD)
• Permanent partial disability benefits (PPD)
• Permanent total disability benefits (PTD)
• Death benefits
• Rehabilitation benefits

For details, visit the Montana Department of Labor and Industry.

Failing to comply with Montana’s workers’ comp laws, uninsured employers may be forced to pay double the amount of what they would have paid for insurance. The minimum such penalty is $200, but if the uninsured period is lengthy, the penalty amount can be substantial.

If one of your employees dies as a result of a workplace injury or occupational disease, the Montana Workers’ Compensation Act requires that death benefits be paid to beneficiaries.

Beneficiaries receive weekly compensation benefits equal to two-thirds of the employee's wages. These benefits cannot exceed the state's average weekly wage.

If the employee leaves no beneficiary, a lump-sum payment of $3,000 must be paid to their parents.

For details, read the Montana Code for workers' compensation.

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

In Montana, many workers’ comp claims end in settlements. This means the parties involved in the case must agree on a lump-sum payment amount. In exchange, the employee (or the employee’s survivors) must agree to the insurer stopping future benefit payments.

Employees who wish to enter into an agreement to take a lump-sum payment in lieu of future benefits must file an application with the Workers’ Compensation Court. If a settlement can’t be reached, employers and employees must first engage in mediation before requesting a hearing with Montana’s Workers’ Compensation Court.

In Montana, employees must file a first report of injury (FROI) to start the claim process within one year from the date of the injury or illness, or within two years if the employee can prove not knowing about the injury.

If you are ready to buy a workers' compensation policy, start a free application with Insureon to compare quotes from top-rated insurance carriers. A licensed insurance agent will help answer your questions and explain your coverage options. Once you find the right policy, you can usually begin coverage and get your certificate of insurance in less than 24 hours.