Missouri workers’ compensation requires employers with five or more employees to carry insurance for injured employees’ medical bills and lost wages unless they’re in construction. In that case, employers must have workers’ comp if they have even one employee. Workers’ comp premiums in Missouri range from 12 cents to more than $30 per $100 of payroll.
Finding workers’ compensation insurance that you can afford and meets state regulations doesn’t have to be difficult. Insurance providers like The Hartford have small business specialists that focus on properly classifying your workers so you can get the right policy. Plus,The Hartford’s online portal returns small business insurance quotes within minutes.
Missouri Workers’ Compensation Insurance Providers
Professionals in law, accounting, and information technology
Service businesses such as photographers, barber shops, and pet sitters
Healthcare providers, including dentists, chiropractors, optometrists, physical therapists, physicians
New companies or expanding businesses that need immediate workers’ compensation coverage
Transportation companies and businesses with operations in neighboring states
Business owners who’ve had a hard time finding coverage and need to apply to many insurers
Finding the best workers’ compensation provider is often a matter of matching your specific needs with the carrier’s ability to cover them. This means looking for an insurer that understands the risks of your industry and location, while also evaluating the other services it offers.
National insurance carrier The Hartford is the best choice for professionals such as lawyers, accountants, and IT consultants. Its broad form workers’ compensation policy automatically adds coverage for volunteers, reasonable expenses, and stopgap for businesses in monopolistic states. Additionally, The Hartford’s workers’ comp offers longer notification periods for employees working in other states, transfer of rights to a new business owner, and cancellations. Other insurers usually only add these options for an extra fee.
Chubb is a large international insurer that can write workers’ compensation policies for a wide range of businesses. Its ability to cover businesses with only one employee and to offer policy limits starting at $200,000 makes it an excellent option for small service businesses such as photographers, pet sitters, and barbers. These and other service business owners can find agents who sell Chubb products all across Missouri.
Healthcare providers, including physicians, dentists, and chiropractors, should consider Travelers for their workers’ compensation insurance. As the largest writer of workers’ comp in the US, Travelers maintains an extensive network of doctors and nurses for policyholders that can be invaluable to healthcare workers who risk injury from bloodborne pathogens, needle sticks, and physical patient care. The carrier also provides outstanding service through its ConciergeCLAIM Nurse program which guides injured employees through the claims process to keep costs and downtime to a minimum.
biBERK is the right choice for a startup or rapidly growing business that needs coverage quickly. This insurance carrier, whose parent company is Berkshire Hathaway, boasts a simple workers’ compensation application that returns a quote in under a minute and the opportunity to purchase coverage immediately for most low- to mid-level commercial risks through the biBERK online system. According to its website, business owners save up to 20% on workers’ comp policies purchased through biBERK.
Originally funded by the state, Missouri Employers Mutual (MEM) is the right carrier for businesses with employees in neighboring states, particularly trucking companies. By investing in Previsor Insurance, MEM established a relationship that allows them to assist Missouri-based businesses with employees or operations in Kansas, Arkansas, Illinois, Iowa, Nebraska, and Tennessee. Additionally, it has a fronting partner that can help cover exposures throughout the US. Small business owners can purchase a MEM workers’ compensation policy through a local agent appointed with the company.
CoverWallet is an online insurance broker that is an ideal choice for difficult-to-place risks such as companies that have filed multiple claims or that perform especially hazardous work. By partnering with some of the biggest carriers in the state, including CNA and Markel, CoverWallet can help most businesses find the perfect carrier for their risks. Its online portal includes an application that mixes smart questions, artificial intelligence, and years of industry experience to match Missouri small business owners with the right workers’ compensation insurance provider.
What Workers’ Compensation Insurance Is
Workers’ compensation insurance pays for costs associated with injuries and illnesses an employee incurs while performing job duties. Policies typically pay for medical care, physical therapy, and medications needed after a work-related injury, plus lost wages and disability payments. In the event an employee dies from her injuries, workers’ comp pays death and survivor benefits as well.
Employees typically give up the right to sue employers once a workers’ compensation insurance claim is filed in most cases. It is still possible for injured employees to sue for gross negligence by the employer.
What Missouri Workers’ Compensation Insurance Covers
Missouri workers’ compensation covers work-related injuries and occupational disease for employees whether they work for public or private employers, according to the Missouri Division of Workers’ Compensation (MODWC). However, illness and injuries are only covered if they occur in the scope of the employee’s job duties, unlike some states where the coverage extends beyond specific job duties.
Missouri workers’ compensation insurance benefits include:
- Medical care: Pays expenses related to the injury including doctors, medications, emergency room, and physical therapy costs; employers may cover immediate medical care if an employee doesn’t miss any work and has medical bills under $1,000
- Lost wage payment: Provides temporary or permanent disability payments of two-thirds the employee’s pre-injury average weekly wage; different caps apply
- Survivor benefits: Pays up to $5,000 in burial expenses to survivors of employees who have died due to work-related injuries or illnesses; some survivors may also receive weekly benefits
- Employer liability: Pays for the employer’s defense in workers’ compensation lawsuits
Missouri laws generally cover Missouri employees who are temporarily working in another state, so they receive benefits for compensable injuries.
Statutory Minimums for Missouri Workers’ Compensation
Like most states, Missouri doesn’t place coverage limits on workers’ compensation policy. If an injury is compensable, then the claim is typically paid according to state law. However, the employer’s liability coverage, often called Part B, does have minimum statutory per occurrence, per employee, and aggregate limits.
The statutory workers’ comp limits for employer’s liability in Missouri are:
- $100,000 bodily injury by accident for each accident
- $100,000 bodily injury by disease for each employee
- $500,000 for all bodily injury by disease
For example, let’s assume a Joplin maintenance van is hit by another car and several employees sustain injuries. One employee has a spinal injury that ultimately costs $110,000. The other two have minor injuries and medical bills of $5,000 each. Unfortunately, the workers decide their injuries are their boss’ fault, forgo workers’ comp, sue for negligence, and win. If the business’ workers’ compensation policy only has statutory limits in Part B, the business owner could be on the hook for $10,000 for the employee with the worst injuries.
What Missouri Workers’ Compensation Insurance Doesn’t Cover
While Missouri workers’ compensation covers most work-related illnesses or injuries, it may not pay if the triggering incident had nothing to do with the injured employee’s job.
Missouri workers’ comp excludes coverage if the worker:
- Intentionally caused the injury
- Was intoxicated
- Was breaking the law when the injury occurred
- Failed to use a safety gear or follow safety rules
When denying a workers’ compensation claim, Missouri employers must prove that the employee was not complying with the rules and regulations set forth by state law. Employers concerned about potential fraudulent claims should report the details to their insurance carrier.
Missouri Workers’ Compensation Insurance Rates
Missouri insurance providers use an equation to determine a baseline for policy rates that is common in most states. This equation factors how risky the work is with the business’ payroll and claims history. The state assigned each job a class code, determined by the National Council of Compensation Insurance (NCCI), and a base rate. This rate is multiplied by the company’s payroll per $100, and then again by an experience modification rate that represents the company’s claim history.
Here is the basic workers’ compensation formula for determining premiums:
Premium = Payroll Per $100 x Classification Code Rate x Experience Modification Rating
The EMR is one reason workers’ comp rates vary among insurance carriers because they get to decide how comfortable they are with any one set of risks. For example, some carriers have more competitive rates on hair salons because they know the industry, understand the risks, and have systems in place to help minimize them.
Estimating Your Workers’ Compensation Rates in Missouri
Let’s imagine you own a small Springfield solar installation company with 10 employees. Your company has one office clerk who makes $35,000 per year, one electrician making $50,000 annually, and a crew of panel installers who earn $300,000.
To estimate your workers’ compensation costs, you need to look up the rates for each position. Below is an example of what you find.
Sample Missouri Workers’ Comp Rates By Industry
5190 Electrical Work
5537 Solar Energy Contractor
According to the chart, and assuming you’re assigned the low rate, your base Missouri workers’ compensation rates are:
Clerk: $350 x $ 0.12 = $42
Electrician: $500 x $2.50 = $1,250
Solar installation crew: $3,000 x $3.53 = $10,590
The next step is to factor in your claims history. To do this, you need your experience modification rate to represent the number of claims your solar installation company has compared to other similar businesses. Multiply the base rate for each employee by your EMR and add the totals together to get an estimate for your premium.
You can usually find your experience modifier on your premium calculation page or payroll report. In Missouri, businesses don’t receive an experience modification rating until they’ve carried a policy that costs more than $7,000 for one year or more than $3,500 for two consecutive years.
The Missouri Department of Insurance has a premium rate guide to help small business owners determine if they are getting the lowest possible rates based on state filings. If your rate is above the baseline rate, you may have a poor experience rating with claims. Remember that rates do vary among insurance carriers.
Missouri Workers’ Compensation Audit Requirements
Every insurance carrier conducts annual workers’ compensation audits to review job classifications and payroll during the policy period. Because your initial premium is based on payroll estimates for the policy term, carriers need to review the information to see if the estimate was accurate. If it’s inaccurate, you may end up owing your carrier additional premium.
Audits aren’t mandated by the MODWC. Instead, they are required by providers before a policy is renewed to ensure the proper premium has been charged.
Missouri Workers’ Compensation Insurance Laws
Missouri employers with five or more employees must maintain valid workers’ compensation insurance or be subject to penalties and potential legal actions. In the construction industry, employers must provide coverage if they have any employees. Even though workers’ comp is mandatory in most situations, certain workers are named exceptions.
Employees who are exempt from workers’ compensation include:
- Workers in companies with less than five employees
- Agricultural workers
- Domestic employees such as babysitters, nannies, house cleaners, and personal chefs
- Qualified real estate agents
- Employees who are inmates in correctional facilities
- Sports officials, adjudicators, and contest workers for interscholastic sports or similar youth programs
- Workers employed by religious sects that have received a waiver for participating in workers’ compensation
- Independent contractors
Missouri Workers’ Compensation Requirements By Business Entity
Missouri defines an employee as any full- and part-time worker in the service of an employer under any contract for hire—oral or written, expressed or implicit. This definition can include individuals working for particular business entities that other states often exclude. Below are brief explanations of Missouri workers’ compensation requirements based on business structures:
- Sole proprietorships and partnerships: Coverage is not required if the only people working in the business are either the sole proprietor or partners; they may opt for self-employed workers compensation
- Limited liability companies: An LLC must get workers’ compensation for its employees even if all of the employees are also members (i.e., someone who holds an interest in the LLC); members can individually reject coverage by providing written notice to the carrier and the LLC
- Corporations: Corporate officers must be covered unless the corporation has only two owners who are also the only employees; in that case, the corporation owners can reject coverage by notifying the MODWC in writing; S-corporation shareholders with more than 40% of the outstanding stock may also reject coverage in writing.
As of Jan. 1, 2019, the cost of workers’ compensation for officers who elect or are required to have coverage is based on a flat payroll amount of $42,300. The ultimate workers’ comp rate is determined by job classification and company claims history.
Missouri Workers’ Compensation Requirements for Self-Insurance
Missouri requires all employers with five or more employees (and all construction employers) to have workers’ comp insurance. However, employers who meet the requirements and complete the proper paperwork are able to self-insure to reduce long-term premium and administrative costs.
Companies seeking to self-insure workers’ compensation coverage in Missouri must:
- Complete an application that includes company financial history
- Obtain a surety bond of at least $200,000 to cover claims
- Pay a $250 application fee to the Missouri Department of Labor and Industrial Relations
The MODWC has a checklist that contains the specific documentation for business owners who want to self-insure.
Missouri Workers’ Compensation Compliance
Employers who fail to properly post this notice may be subject to penalties up to $17,000 per customer location. According to Missouri law, it is a misdemeanor criminal offense to not have workers’ compensation at the onset of employment. The penalty may be as much as three times the determined annual premium or $50,000, whichever is greater. A second offense is considered a Class E felony subject to four years imprisonment and a fine up to $10,000 or twice the amount of the unpaid premium.
How to File a Missouri Workers’ Compensation Claim
Employees generally initiate the claims process by giving written notice to their employer of their injuries within 30 days of the accident or diagnosis of occupational disease. Employers, however, have a number of legal responsibilities too. Taking care of these responsibilities not only helps your employee return to work sooner, but it also minimizes the kind of trouble that leads to misunderstandings and lawsuits.
In Missouri, employers’ responsibilities in the workers’ compensation claim include:
- Administer first aid to the injured worker: Immediate aid can keep injuries from getting worse
- Provide preferred physician’s information: Missouri employers have the right to select the healthcare provider or treating physician; employees can choose their own doctors, but then the costs fall on them
- Report the injury: Employers have five days to report the injury to their insurer or third-party administrator (TPA); they or their insurer or TPA have 30 days to file a First Report of Injury with the MODWC
Other forms are required in Missouri, but they are usually the responsibility of the employer’s insurance carrier or TPA. That said, employers should know what they are so they can be sure their representatives are taking care of them appropriately.
The other forms that show up during the workers’ comp claim process in Missouri are:
- An Answer to Claim for Compensation is filed by your insurer’s or TPA’s lawyer 30 days after the MODWC acknowledges it received the First Report of Injury
- Your TPA or insurance carrier must file a Medical Treatment Form with the first treatment, at the end of treatment, and any time the MODWC requests it.
- A Notice of Commencement/Termination of Benefits must be filed within 30 days of the original injury notification, within 10 days after compensation ends, and every time compensation stops and restarts
You can download a Notice of Commencement/Termination of Benefits form from the MODWC’s Injury Reporting Responsibility page.
Tips on Getting Missouri Workers’ Compensation Insurance
Workers’ compensation is a complicated insurance policy with a lot of moving parts that affect rates. These four tips are designed to help you quickly obtain workers’ compensation policies and keep premiums as low as possible.
1. Implement Safety Programs
Employers can keep workers’ compensation rates down by preventing injuries in the first place. A written employee safety program that is reviewed regularly with employees helps everyone minimize injury risk. In addition to reducing costly claims, many insurance companies give premium credits for official safety programs.
2. Confirm Employee Classifications
Don’t assume that an insurance carrier understands exactly what employees do in their day-to-day jobs. Many small business owners overpay workers’ compensation premiums because clerks or sales representatives are lumped into classifications that have higher base premium rates. Talk to your insurance agent to make sure you aren’t paying more than you should.
3. Participate in Annual Workers’ Comp Audits
An audit is a good time to confirm that employee classifications are correct and the proper payroll amount is attributed to each job class. Make sure that any employees who are exempt from workers’ compensation are removed from total payroll numbers.
4. Create Specific Job Descriptions
Because Missouri workers’ compensation pays claims based on each employee’s specific job description, you need to be clear about what employees do. Having a clear description of each workers’ tasks not only helps insurance carriers properly price your policy, it also helps define whether an injury can be covered.
Frequently Asked Questions (FAQs) About Missouri Workers’ Compensation
Workers’ compensation insurance can be confusing and frustrating for many small business owners. If you still have questions after reading this article, here are some of the most frequently asked questions about Missouri workers’ comp.
Can members of an LLC be excluded from workers’ comp?
Whether or not LLC members can be excluded from workers’ comp depends on state law. In Missouri, members of an LLC must be covered by the business’ workers’ compensation insurance policy. They can, however, reject coverage by providing written notice to the LLC and its insurance carrier.
Does a construction company need to have workers’ comp in Missouri?
Missouri construction companies are required to maintain workers’ compensation insurance if they have one or more employees. General contractors can be held liable for uninsured subcontractors’ work injuries and the injuries of their uninsured employees. For this reason, general contractors should always make sure subcontractors have adequate insurance.
How much does workers’ compensation pay in Missouri?
In Missouri, how much an injured employee earns depends on the type of injury they suffered. For example, temporary total disability benefits pay up to two-thirds of the employee’s weekly wage at the time of injury and are capped at 105% of the statewide average weekly wage. For June 2019 to June 2020, that’s $981.65 per week. These payments stop at 400 weeks. However, permanent total disability benefits pay the same rate and continue for as long as you are unable to work.
Missouri workers’ compensation insurance requirements protect employees who get injured on the job by paying for their medical expenses and lost wages. However, it also protects employers by covering their responsibility for these costs and reducing their chances of being sued. Moreover, employers who don’t maintain the right insurance coverage are subject to state penalties and civil lawsuits.
For a small business owner unsure where to start when it comes to classifying employees and determining the payroll numbers for each, trusted insurance providers can help. The Hartford has industry specialists who focus on your business’ unique needs and will walk you through the steps to the best policy to protect you. Get a free, no obligation quote today.