Arkansas workers’ compensation law dictates that any business with at least three employees must maintain workers’ compensation insurance. While rates vary considerably, employers can expect to pay 70 cents per $100 of payroll in premium costs across all industries in the state. Failure to maintain workers’ compensation insurance can result in penalties and fines.
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What Are Arkansas Workers’ Compensation Requirements?
Each state has its own workers’ compensation requirements. In Arkansas, the Arkansas Workers’ Compensation Commission is the regulatory body overseeing workers’ compensation. It ensures that employers with at least three employees have valid policies to protect workers who may get injured on the job. Employers must pay for the policy in whole and not transfer any costs to employees.
Employees constitute anyone hired to perform duties on behalf of the company. Minors are included in the definition of employees, and work agreements can be written or oral.
It is possible for employees to opt-out of coverage. To do so, they would complete an Application for Certificate of Non-Coverage. This is normally completed if a worker has coverage from another entity, such as when subcontractors are employed but have their own insurance coverage.
Who Doesn’t Need Workers’ Compensation Insurance in Arkansas?
There are exceptions to the workers’ compensation requirement. Any employer with fewer than three employees is not required to obtain a policy but may do so voluntarily. The additional work classes are not required to have workers’ compensation provided:
- Agricultural farm laborers
- State employees
- Casual employees
- Incarcerated workers
The Workers’ Compensation Act also states that sole proprietors and company partners are considered employees unless they opt-out of the requirement.
Where Can I Obtain Workers’ Compensation Insurance in Arkansas?
You can obtain Arkansas workers’ compensation insurance via the private insurance market. There is also the option to self-insure or group self-insure for those employers who meet the financial net worth requirements. Self-insurance requires at least $250,000 in net worth while group self-insurance must demonstrate a combined net worth of at least $1 million.
Most employers get coverage from private insurance carriers who can offer reasonable rates for their industry.
Top Workers’ Compensation Insurance Insurers in Arkansas
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The Hartford loves helping businesses with workers’ compensation needs along with other commercial insurance. Its workers’ comp policies are packed with a ton of extras, making it unique in the industry. For no extra cost, you can get policy inclusions, such as gap insurance and extended reporting periods, which make its policies more robust without extra costs.
Liberty Mutual might be best known for auto and home insurance, but it also offers a complete line of commercial insurance, including workers’ compensation. It has built policies that are designed for certain industry risks. This means that you are protected for the most likely occurrences. Liberty Mutual has a particular affinity for restaurant and food industry companies, pricing policies at an affordable rate for the risk.
Chubb is an international commercial insurance powerhouse covering companies throughout the United States and abroad. When it comes to workers’ compensation, Chubb has mastered the claims process that helps get injured workers back to work sooner than later. This saves everyone money and keeps workers’ spirits high. It does this by utilizing nurse case managers who oversee the entire claim process.
biBERK is a Berkshire Hathaway company and is seen as a technology innovator for the insurance giant. It has streamlined the underwriting process for many industries making it possible to get insurance quickly and for up to 20% less than competitors. biBERK has a strong appetite for retail businesses with small staffs.
Assigned Risk Pool
For employers unable to find insurance via the private market due to high claims or high-risk industries, they can get a policy through the state’s assigned risk pool. This is an insurance of last resort and is usually more expensive than private carriers, which is why if you qualify for private insurance, you’re usually better off getting it. The assigned risk pool is managed by the National Council on Compensation Insurance (NCCI).
How Much Does Workers’ Compensation Insurance Cost in Arkansas?
Arkansas workers’ compensation costs will vary depending on the size of your company’s payroll, the industry you work in, and your claims history. On average, employers pay 70 cents per $100 of payroll in the state.
The formula to determine your workers’ compensation premium is:
Premium: Work class code x payroll/$100 x experience modification rate (eMod)
The eMod, also known as an EMR, considers a business’ claims history in relation to the industry’s claims history. While most businesses start with an eMod of 1.0, this can go up or down and increase or decrease the premium accordingly.
Sample Arkansas Workers’ Compensation Rates by Class Code
Industry Class Code
5183 Plumbing Contractors
7219 Towing Company
8742 Sales Professional
8810 Clerical - Office
8829 Nursing Homes
8831 Animal Shelters
9063 Fitness Center
Arkansas Workers’ Comp Cost Example
Understanding how your rate is calculated helps many business owners better budget for insurance. If you have workers who do different types of jobs, they will be rated based on what they regularly do. For example, a mason is considered a higher risk than a clerk; $3 per $100 of payroll and 7 cents per $100, respectively. If your business has masons and clerks, you’ll calculate each rate independently.
Using the data in the table above and assuming $100,000 in payroll for masons, and $20,000 in payroll for a clerk, the calculations would look like this:
Mason: $3 x $100,000/$100 x 1 = $3,000
Clerk: 7 cents x $20,000/$100 x 1 = $14
The total premium estimate would be the two added together for $3,014 per year.
Arkansas Workers’ Comp Audit Requirements
When an insurance carrier provides you with a quote and underwrites the policy, the premium is considered an estimate of costs. This is because there is no way to know exactly how much payroll you will dole out in the year. You may hire or fire people, have people take unpaid time off, or rack up overtime hours. At the end of the policy term, the insurance carrier will audit the payroll to reconcile the estimate with the actual.
Depending on the results of the audit, you may receive a bill or a refund check. Audits are required and are also used to determine the next term’s premium.
What Does Workers’ Compensation Insurance in Arkansas Cover?
The Arkansas Workers’ Compensation Act mandates that workers are protected in the event of getting injured during work activities. There are several types of benefits that workers’ compensation covers. This makes sure that the employee’s medical costs are paid for, and wages are not lost entirely.
Arkansas workers’ compensation law provides coverage for employees in these areas of loss:
- Medical benefits: Pays the costs of emergency medical care, follow-up, and rehabilitative care, including prescriptions and physical therapy. This can be capped at $10,000 being paid after six months from the injury when no time was lost from work. Employers have the right to choose the doctor injured workers see.
- Temporary partial disability benefits: Pays 66.67% of the average weekly wage subtracted from your earnings.
- Temporary total disability benefits: Pays a maximum of $661 per week when calculating up to 66.67% of the injured worker’s average weekly wage.
- Permanent partial disability benefits: Pays 66.67% of injured workers’ average weekly wage capped at 450 weeks of benefits depending on the type of disability and degree of impairment.
- Death benefits: Pays a funeral benefit of $6,000 and pays 66.67% of the deceased worker’s average weekly wage for a spouse’s life or until they remarry and until dependents are 18 or are physically or mentally incapacitated.
When employers have workers’ compensation insurance, they are protected from lawsuits from injured workers. The insurance policy will pay to defend employers and pay any settlement costs associated with the lawsuit.
Arkansas Workers’ Compensation Coverage Example
Jennifer works in a warehouse where she trips and breaks her leg. She is unable to perform work duties for six to eight weeks while it heals. All of her medical expenses are paid for by the workers’ compensation policy. She also received temporary disability payments since she is unable to work. Her payments are based on her average weekly wage of $1,000, but since that amount exceeds the cap of $661 per week, she receives the $661 per week until she can return to work.
The temporary disability payments have a seven-day waiting period, but since she is out of work for more than 14 days, she receives payments from the first day of injury.
What Are the Penalties for Not Having Workers’ Compensation Insurance in Arkansas?
Having workers’ compensation in Arkansas is the law. Failure to provide valid insurance can lead to civil and criminal penalties. At the very least, employers who don’t have insurance are 100% liable for employees’ injuries and are subject to employee lawsuits for added pain and suffering associated with injuries.
How Do I File a Workers’ Compensation Claim in Arkansas?
The claims process starts with an injured worker informing his employer that he has been injured on the job. A First Report of Injury or Illness form will be completed and submitted to the insurance carrier.
Employers may ask employees to fill out an accident report as well that details exactly what happened, when, and who was witnessing the injury. The insurance carrier may inquire with questions about the injury.
During the claims process, the employee may receive progress reports that need to be completed by medical professionals that assess his recuperative progress. Failure to submit these reports timely could lead to a delay in benefits or even a closure of the case. It’s important to stay on top of the paperwork when involved in a workers’ compensation claim.
Arkansas Workers’ Compensation Deadlines
For employees to get the full benefits of workers’ compensation, they must report the injury within the required timeframe. Law states that employees should inform the employer immediately, but they do have:
- Up to two years from the date of injury to file a claim
- One year to file a claim from their last date of compensation if they were on benefits for any period of time
- One year from when they were exposed to an “injurious” substance leading to workplace illnesses
Arkansas Workers’ Comp Resources
- Contact Information
- Workers’ Compensation Commission
324 S. Spring St.
Little Rock, AR 72203
- Workers’ Compensation Commission
- Key Forms
- Useful Links
Not every Arkansas employer is required to have workers’ compensation insurance, but if you have at least three employees, then you must have coverage. If you don’t have workers’ compensation coverage, you could be subject to fines and penalties. Even if you aren’t required to have insurance, opting for coverage could prevent costly lawsuits if someone gets hurt on the job.
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