Pennsylvania workers' compensation insurance

All business owners with employees in Pennsylvania are required to carry workers’ compensation insurance. Under the Pennsylvania Workers' Compensation Act, employees who are injured or acquire an illness on the job receive a percentage of lost wages and reimbursement of medical expenses.

Workers' comp also benefits employers, who gain protection against employee lawsuits over injuries. An employer that maintains a workplace safety committee that is certified by the state is eligible to receive a 5% discount on a workers’ compensation policy premium.

The only circumstance in which Pennsylvania employers are not required to carry workers’ compensation insurance is if all employees fall into a category for someone who is exempt, such as railroad workers, longshoremen, federal employees, and domestic workers.

Exemption applications and other documentation must be filed with the Department of Labor and Industry's Bureau of Workers' Compensation; it regulates the Pennsylvania workers’ compensation system.

Check with a licensed insurance agent to ensure that you’re following the laws correctly for your situation.

Pennsylvania law states that any employee who is injured on the job is eligible for workers’ compensation benefits, regardless of whether that person is performing full-time, part-time, or seasonal work.

If you’re self-employed, also called a sole proprietor, you don’t need workers’ compensation. Though Pennsylvania doesn’t mandate coverage, it is available if you choose.

Self-employed workers can still receive lost-wage assistance and other benefits through a workers’ comp policy. It’s also possible that a company looking to hire you as an independent contractor might hesitate if you don’t carry your own coverage.

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 covers the cost of medical care for workplace injuries and occupational diseases. That includes everything from carpal tunnel syndrome to back injuries and black lung disease. It also provides partial wage replacement while the employee is unable to work.

Workers' compensation benefits in Pennsylvania include:

• Medical benefits, including hospitalization, prescriptions, and orthopedic appliances
• Wage loss benefits (usually two-thirds of the worker's average weekly wage)
• Partial disability benefits, if the employee earns lower wages after the injury
• Vocational rehabilitation
• Death benefits, if a work-related injury or illness results in death

For details, visit the Pennsylvania Department of Labor and Industry's page on claims and indemnity.

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

Pennsylvania employers, from Pittsburgh to Erie, can face civil and criminal penalties for failure to have adequate workers’ comp coverage.

If an employee is injured on the job and the employer is uninsured, the employee’s benefits will be paid from the Uninsured Employers Guaranty Fund, and the employer will be responsible for reimbursing the fund. This would include costs, interest, penalties, and other fees.

In addition, the uninsured employer opens itself up to litigation for any injuries sustained if the employee decides to sue for damages. Often, the amount of damages awarded is more than what the employer’s cost would have been for workers’ compensation insurance.

If it is found that an employer failed to maintain workers’ compensation coverage, each individual responsible for that lapse could also be criminally charged. That person could be found guilty of a misdemeanor, which would carry a fine up to $2,500 and up to a year in jail. If the failure to comply is intentional, it could be a felony charge with a fine of up to $15,000 and up to seven years in prison.

Criminal counts, fines, penalties, and jail time can increase for each day the employer failed to maintain workers’ compensation insurance.

The dependents of an employee who dies on the job can obtain workers’ compensation death benefits. Compensation payments begin on the date of the employee's death.

Pennsylvania qualifies the following individuals as dependents:

• Spouses
• Children under 18 or full-time students up to age 23
• Children of any age who are physically or mentally incapacitated
• Parents who depend on the deceased person for financial support
• Siblings under the age of 18 or who are full-time students until the age of 23 who depend on the deceased worker for financial support

Workers’ compensation death benefits also include a payment of $3,000 for burial expenses.

Settlements provide an opportunity for all stakeholders to close a Pennsylvania workers' compensation claim. Typically the injured employee gives up rights to future claims in exchange for a sum of money.

The payment is often awarded as a lump sum. Some injured workers will obtain compensation benefits in the form of a structured settlement, which means that payments are made in installments over a period of time.

It’s possible for an injured worker to obtain a commutation, which is when a lump sum is awarded in lieu of weekly benefits but the worker does not give up rights to future benefits like medical treatment.

The statute of limitations to file a claim petition for an injury sustained on the job in Pennsylvania is three years from the date of injury.

However, the claimant is required to seek treatment with an approved health care provider within 90 days after the injury. There is also a 120-day time limit for notifying employers about the injury.

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