According to Louisiana workers’ compensation laws, any public or private employer is required to provide coverage for their employees with few exceptions. Workers’ compensation pays for the costs of care and lost wages when employees are injured on the job. The average cost of a policy in Louisiana across all industries is $1.50 per $100 of payroll.
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What Are Louisiana Workers’ Compensation Requirements?
Every state’s workers’ compensation laws are different but most, like Louisiana, require a business with employees to obtain a workers’ comp policy. According to the law, employees who must be covered include:
- Full-time workers
- Part-time staff
- Seasonal employees
Additionally, Louisiana workers’ compensation laws, administered by the Louisiana Workforce Commission, state that subcontractors can be considered employees in situations where they are involved in the pursuit of the employer’s trade or are performing substantial manual labor.
There are exemptions to these requirements, including:
- Employees of a private residential householder
- Musicians and performers engaged in services completing a contract
- Workers covered by the Federal Employers’ Liability Act
- Crewmembers of crop dusting and spraying
- Licensed real estate brokers and salespeople
When a business has no employees, sole proprietors, partners, and business directors are exempt as well.
Unless you meet one of the state exemptions as an employer, you need to get workers’ compensation insurance. You should have a policy in force before the first day of work for your first employee. Failure to have a proper policy in force prior to employees starting could result in penalties and fines. Employers must provide proof of insurance to the Louisiana Workforce Commission that oversees workers’ compensation insurance.
Where Can I Obtain Workers’ Compensation Insurance in Louisiana?
Louisiana is considered a competitive market where insurance carriers compete for business, so employers can obtain workers’ compensation insurance from private carriers licensed with the state. Every insurance carrier has an “appetite” for certain industries, and this suggests a willingness to underwrite those industries at competitive pricing. When shopping for insurance, business owners should seek carriers with an appetite for their industry to get the most favorable rates.
Business owners can also choose to self-insure for workers’ compensation. Those who wish to self-insure in the state must provide three years of financial records and have the solvency and cash flow to justify self-insurance. Many business owners choose this option to join a self-insurance fund to administer their coverage.
Top Louisiana Workers’ Comp Insurance Providers
CommercialInsurance.net is an online marketplace that takes small business applications and shops them to more than 200 potential carriers, brokers, and agencies. This helps save business owners time and makes sure they get the right policy for the right price. Owners can be confident that apples-to-apples comparisons were made before being paired with a top carrier that is sure to offer coverage.
The Hartford is a national insurance carrier that offers all lines of small business insurance. Business owners who run operations from an office setting will have the most luck with fast underwriting and competitive pricing. One of the key benefits of The Hartford’s workers’ comp insurance is the extras it includes for no additional cost, such as coverage for exempted workers and extended reporting timelines.
Liberty Mutual offers both personal lines and small business lines of insurance. When it comes to small business insurance, Liberty Mutual tailors policies with coverage necessary for the industry to prevent gaps. Those in the food and beverage industry will enjoy competitive pricing with robust coverage that comes with a range of safety resources.
Chubb is an international small business insurer with a superb reputation for quality coverage. Many of its small business insurance products can be underwritten quickly, making them a leader for those looking for insurance fast. Chubb stands out for its workers’ compensation claims process, where actual nurses work as case managers to expedite processing and help injured workers get the right care faster.
biBERK claims that many of its small business clients save 20% on insurance costs because it eliminates the middleman. biBERK is owned by Berkshire Hathaway and maintains high financial ratings as a result. Small business owners can rest easy knowing that their claims will be covered by a financially strong company.
How Much Does Workers’ Compensation Insurance Cost in Louisiana?
Louisiana workers’ compensation premiums are calculated based on a company’s payroll, job classifications, and claims history. Costs can also vary by carrier as each insurance company has a different appetite for the business.
The average rate for workers’ compensation insurance in Louisiana is $1.50 per $100 of payroll. This average, from the National Academy of Social Insurers, spans all job classifications in all industries. Based on this average, a typical company pays $150 per year for every $100,000 in payroll.
Below are common examples of rates based on industry classifications. There are low rates and high rates to account for company history and industry.
Sample Louisiana Workers’ Comp Rates by Class Code
Industry Class Code
5183 Plumbing Contractors
7208 Towing Company
8393 Auto Body Repair
8810 Clerical - Office
8829 Nursing Home
9082 Restaurants - Catering
Louisiana Workers’ Comp Cost Example
Assume a small plumbing company has five plumbers and one clerk. The total payroll of the plumbers is $325,000, and the total payroll of the clerk is $35,000. The company has no claims.
First, let’s figure out the premium that covers the plumbers (class code 5183) using the low rate from the chart above. The calculation looks like this:
$1.89 x ($325,000 / 100) = $6,142.50
Next, we do the same for the clerk (class code 8810):
13 cents x $35,000 / 100 = $45.50
Add the two together for a total base premium of $6,188. That, however, is just the beginning of any workers’ compensation calculation. The next step is to factor in the experience modification rate (EMR), a number used to represent the company’s claims history. This plumbing company has no claims, so its EMR has no impact on its final premium.
Louisiana Workers’ Comp Audit Requirements
Because workers’ compensation insurance is based on an estimation for a year’s payroll, every policy is audited at the end of its term. The audit is conducted by the insurance carrier to reconcile the estimated payroll used to establish the policy with the actual payroll paid during the policy term.
When an employer overestimates their payroll, they receive a premium refund check. If an employer underestimates payroll, maybe because they hired a new person midyear, they owe an additional premium for the same expiring policy. Insurance companies use information from the audit to determine the next year’s premium, too. If you don’t cooperate with the audit, your policy can be canceled, and finding new insurance may be difficult.
What Does Workers’ Compensation Insurance in Louisiana Cover?
When employees are physically or mentally hurt while working or incur occupational illnesses, they are entitled to workers’ compensation benefits. These are paid by the employer or the employer’s insurer and cover all approved medical bills, including:
- Doctor’s appointments
- Emergency room visits
- Prescription medication
- Physical therapy
- Prosthetic devices
- Necessary travel to treatments
Employees can choose their own doctor, but employers have the right to choose another physician and arrange an examination that the employee must attend.
Injured workers are also entitled to indemnity, or disability, payments if they cannot return to work for more than seven days. Disability benefits pay up to 66.67% of the injured worker’s average weekly wage for the prior four weeks. For those who are off from work for more than 42 calendar days, their wage replacement will retroactively pay the first seven days of the average weekly wage cap.
Employees who can return to work but earn less than 90% of their pre-injury wages may also be eligible for Supplemental Earnings Benefits (SEB). SEBs pay 66.67% of the difference between the average monthly wage the employee earned before the injury and the average monthly wage the employee is now capable of earning. Those with catastrophic injuries as defined by Louisiana workers’ compensation laws are entitled to a one-time payment of $50,000.
Louisiana workers’ compensation and COVID-19: Louisiana workers’ compensation only covers occupational diseases if they result from hazardous conditions unique to employment. This means some employees, such as first responders and healthcare workers, may be able to receive benefits if they contract COVID-19 on the job. Other types of employees will have a hard time establishing a connection between their employment and contracting the disease.
Louisiana Workers’ Compensation Coverage Example
Paul is a nurse’s aide in an elderly home. One day, as he was trying to help a patient out of bed, he strained his back and was unable to stand straight. He notified his employer and went home to rest. The pain did not subside the next day when he called his employer to begin a claim and go to the doctor.
The doctor’s visits, medication, and physical therapy are paid for by the workers’ compensation insurance policy. Paul feels better within a week and returns to limited duty. Because he was not off from work for the required seven days, Paul does not receive disability payments based on his average weekly wage.
What Are the Penalties for Not Having Workers’ Compensation Insurance in Louisiana?
When an employer doesn’t have proper workers’ compensation insurance, they are subject to fines starting at up to $250 per employee for the first violation. These fines can go up to $500 per employee for subsequent violations, but the total civil penalty is capped at $10,000.
On top of the civil penalties, the business owners can be found criminally guilty if they willfully fail to provide workers’ comp insurance or provide false information to the Workforce Commission’s Office of Workers’ Compensation. An injunction can also halt business activities until proper insurance is provided to the board.
How Do I File a Workers’ Compensation Claim in Louisiana?
Workers’ comp claims in Louisiana start when the employee reports their injury to their supervisor. The employee must provide:
- The date and time of the incident
- Details of how the employee was injured
- The nature of the injuries
- Witness contact information if available
Employers are then required to file a claim with their insurer using the Employer’s First Report of Injury (Form LWC-WC 1A-1). The insurer then notifies the Louisiana Workforce Commission.
If the claim is denied, the employee has the right to appeal the decision by completing a Disputed Claim for Compensation form (Form LDOL-WC 1008). This is sent to the employer, the insurance carrier, and the Louisiana Workforce Commission. The insurance carrier has 15 days to respond to an appeal.
Louisiana Workers’ Compensation Deadlines
When injured or involved in an incident that could result in a claim, employees must notify employers immediately. Sometimes an employee doesn’t realize they are injured seriously until later. In cases such as this, the employee has 30 days to file a claim to maintain eligibility for workers’ compensation insurance.
The reporting deadline expands to one year for occupational diseases from the date:
- The disease shows up
- The employee is disabled because of the disease
- The employee knows or could reasonably believe the disease is work-related
From when the employer is given notice of the injury, he has 10 days to notify the Office of Workers’ Compensation. Employers have 14 days to approve or deny the claim and start making payments to the injured worker.
Louisiana Workers’ Comp Resources
- Contact Information
Louisiana Workforce Commission
Office of Workers’ Compensation Administration
P.O. Box 94040
Baton Rouge, LA 70804-9040
- Key Forms
- Employer’s First Report of Injury or Illness: Employers submit Form LWC-WC 1A-1 to their insurer to initiate a workers’ comp claim
- Disputed Claim for Compensation: Employees can use Form LDOL-WC 1008 to dispute a claim denial
- Workers’ Compensation Poster: Employers should post this notice in a place that is convenient and conspicuous for employees
Louisiana does a lot to protect employees with very strict rules as to what businesses need to carry workers’ compensation insurance―nearly all of them. Not having a policy can mean substantial penalties and fines along with criminal proceedings. It’s important to have the right policy that protects people when hurt on the job.
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