Regulations in Nebraska require most employers with at least one employee to maintain workers’ compensation insurance. Failure to do so can result in the employer being responsible for the costs of accidents as well as face penalties and fines. Employers can expect to pay $1.14 per $100 of payroll in workers’ comp premiums.
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What Are Nebraska Workers’ Compensation Requirements?
According to state law, employers with one or more employees will obtain valid workers’ compensation insurance prior to the employee starting work. An employee, who is also referred to as a worker, is classified as anyone who is under a contract of hire. The contract can be oral or written, expressed, or implied to be valid. The definition includes minor children.
Who Doesn’t Need Workers’ Compensation Insurance in Nebraska?
While the law states that most employers are required to obtain insurance, there are some exceptions to the rule. When an employee is exempt, coverage is not mandatory but may be voluntary to provide protection to workers.
Those who are exempt from workers’ compensation coverage in Nebraska include:
- Federal employees
- Railroad employees
- Most volunteers
- Domestic and household servants
- Certain agriculture workers
Sole proprietors, partners, and members of limited liability companies (LLCs) are exempt from the requirement of coverage, although they can opt to purchase coverage if they wish. Additionally, executive officers who own 25% or more of the corporate stock are exempt as are executive officers of nonprofits that earn less than $1,000 from the nonprofit.
Where Can I Obtain Workers’ Compensation Insurance in Nebraska?
Nebraska is a competitive insurance market where private insurance carriers vie for companies’ business. While there is the possibility to self-insure in the state, this option is reserved for large corporations with the capital to self-fund claims.
Top Workers’ Compensation Insurance Insurers in Nebraska
CommercialInsurance.net makes shopping for workers’ compensation and other lines of insurance easy. It has more than 200 top-tiered insurance partners, such as The Hartford, Liberty Mutual, and Progressive, to make sure it places your policy with a company that understands your industry and prices the risk right.
The Hartford is a small business insurance expert that specializes in workers’ compensation for office-type businesses. While it will underwrite a host of other industries, its pricing is most competitive for Main Street types of businesses. Small business owners will particularly enjoy the extra features The Hartford’s workers’ compensation policy offers without charging a dime extra for things like extended reporting periods and gap insurance.
Liberty Mutual is a national insurance carrier that is best known for its personal lines of insurance. Don’t let that fool you into thinking it isn’t good for small business needs. It offers coverage designed specifically for certain industry risks like the risks in the food and beverage industry. Liberty Mutual’s policies reflect the needs of business owners at a price that makes them affordable.
Hiscox has made a name for itself in insuring extremely small and budget-conscious companies. It works with a lot of independent contractors or those with only one or two employees. Hiscox can underwrite policies in many construction-type industries, making it our top choice for this market.
biBERK is the subsidiary of Berkshire Hathaway and takes a revolutionary step of eliminating the middleman in the insurance buying process. This helps it price workers’ compensation policies up to 20% below competitors. It takes a few minutes to go through the biBERK online process to determine eligibility.
Assigned Risk Pool
For those who are unable to obtain workers’ compensation through the competitive insurance market, there is the assigned risk pool. In Nebraska, this pool is administered by Travelers Indemnity Company and offers insurance to those who are in high-risk industries or have a claims history prohibiting them from obtaining insurance elsewhere.
How Much Does Workers’ Compensation Insurance Cost in Nebraska?
Nebraska workers’ compensation rates will vary a lot depending on the industry you are in, your claims history, and your payroll. The average rate for premiums in the state is $1.14 per $100 of payroll. This means that for every $100,000 of payroll, employers can expect to pay an average of $1,140 in premium.
Premiums are calculated using the following formula:
Premium = Job class code x payroll/$100) x eMod factor
The eMod factor, also known as the experience modifier rate or (EMR), looks at the claims history and assigns a modifier based on the company’s history in relationship to the average claims in the industry. All eMods start as 1.0; if they go up, the premium increases and vice versa.
Sample Nebraska 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
Nebraska Workers’ Comp Cost Example
It can get confusing to understand how workers’ compensation is calculated when you have employees qualifying as different work classifications. For example, assume a towing company has four tow truck drivers and one office clerk. The office clerk’s job description innately has less risk than the tow truck drivers.
To calculate the rate, you first need to calculate the payroll of the tow truck drivers and that job classification. If the payroll for the drivers is $200,000, then the rate would be:
Tow truck drivers: $4.99 x $200,000/$100 = $9,980
Then you calculate the clerk based on an example of $35,000 in payroll:
Office clerk: 12 cents x $35,000/$100 = $42
Adding them together, you get the total estimated payroll: $9,980 + $42 = $10,022.
Nebraska Workers’ Comp Audit Requirements
The premium you calculate is an estimate as is the premium that your insurance carrier offers you. The reason it is an estimate is that the carrier can’t know for certain the exact dollar value of payroll. You may hire or fire people, add overtime, or reduce hours. This all affects payroll and is why a payroll audit is conducted at the end of the policy’s term.
A payroll audit reconciles the estimated payroll with the actual payroll to determine what the real premium should have been all along. If you overpaid, you will receive a refund check, but if you underestimated payroll, you will be billed for the additional amount due. It’s important to note that the audit also determines the rate for the next premium period and must be completed. Otherwise, you risk being canceled for insurance.
What Does Workers’ Compensation Insurance in Nebraska Cover?
The Nebraska Workers’ Compensation Court regulates employers and workers’ compensation cases. Nebraska is considered a no-fault state, meaning that it doesn’t matter who’s fault the injury was to get medical coverage as long as the employee was not willingly trying to harm themselves, engaged in horseplay, using illegal drugs, or doing an illegal activity.
Nebraska workers’ compensation law provides coverage for employees in these areas of loss:
- Medical benefits: Employers are responsible for paying medical expenses related to treatment and rehabilitation
- Temporary partial disability benefits: Employees will receive up to 100% of their average weekly wage less any income received for other work in disability pay for up to 300 weeks.
- Temporary total disability benefits: Will pay up to 100% of an employee’s average weekly wage in disability payments for up to 300 weeks, capped at $671 per week.
- Permanent partial disability benefits: Pays up to $882 per week for anywhere from five to 300 weeks based on the actual disability and body part affected.
- Death benefits: Pays death benefits to a widow or widower for up to 66.67% of the average weekly wage until remarriage. Dependent children can receive up to 75% of the average weekly wage up until age 19―age 25 if a full-time student. Burial expenses are capped at $6,000.
For employers, Nebraska workers’ compensation insurance covers financial liability for workplace injuries and illnesses as well as legal representation if an employee files a lawsuit. The insurance policy will pay for the legal defense of the employer in such cases and attempt to settle issues outside of court where appropriate.
There may be instances where an employee is injured by a third party not affiliated with the employer. In these cases, the employee may sue the third party while making a workers’ compensation claim. If the lawsuit is successful, the workers’ compensation insurance is entitled to receive a refund of benefits paid in what is called a subrogation lien.
Employers have the right to choose the doctor to treat an employee. If an employer gives the employee the right to choose a doctor, it must be a doctor that has previously treated the employee or a member of their family. The employer can ask for written verification of this from the doctor. A change in the doctor after one has been chosen must be approved by the employer. The exception to this rule is if the injury requires major surgery or involves dismemberment.
Nebraska Workers’ Compensation Coverage Example
Leticia works in a nursing home where she hurts her back while trying to move a patient from his bed to a wheelchair. She is unable to stand up, let alone work, and is sent home. She sees a doctor who diagnoses her with a herniated disc in her lower back. She will require surgery to fix the problem and be out of work for three months.
Leticia waits out the eight-day waiting period to get her disability payments. Since the injury will last more than six weeks, she is entitled to disability pay from the first date of injury. All her medical bills are paid by the insurance policy.
What Are the Penalties for Not Having Workers’ Compensation Insurance in Nebraska?
Employers who fail to provide the requisite workers’ compensation insurance can be held liable to civil and criminal penalties. At the very least, they are responsible for 100% of the costs of injuries to employees when a valid policy is not in force. They may also be sued for pain and suffering.
There is also a civil fine of up to $1,000 for each discovered violation of workers’ compensation laws. This fine can be assessed each day that there is noncompliance with the law. Employers may also face up to one year of imprisonment or see a revocation of their business licenses to operate in the state.
How Do I File a Workers’ Compensation Claim in Nebraska?
Properly filing workers’ compensation claims protects both the employee and the employer. Following the timelines ensures that quick attention is paid to workplace injuries to help employees get healthy sooner than later.
When injured, an employee must notify their employer about the injury as soon as possible, but within 10 days, by filing a First Report of Alleged Occupational Injury or Illness. Employers must then notify the insurance carrier. The insurance carrier has 30 days to investigate the claim and begin paying benefits to the employee or deny the claim with a written explanation.
During the claims process, the insurance carrier will ask the employee for progress updates that must be completed by attending physicians. Failure to complete the updates could delay benefits or lead to a claims denial.
Nebraska Workers’ Compensation Deadlines
There are a couple of key deadlines that employees and employers need to be aware of when it comes to filing a workers’ compensation claim.
- Up to 10 days to report an injury
- A two-year period to agree to compensation or file a claim with the Nebraska Workers’ Compensation Court
- Notify the insurance carrier immediately upon receiving the First Report of Alleged Occupational Injury or Illness
- Notify via the insurance carrier whether a claim has been approved or denied within 30 days of first notice
Failure to follow deadline requirements could mean forfeiture of claim rights.
Nebraska Workers’ Comp Resources
- Contact Information
- Nebraska Workers’ Compensation Court
1010 Lincoln Mall, #100
Lincoln, NE 68508
- Nebraska Workers’ Compensation Court
- Key Forms
- Useful Links
Nebraska workers’ compensation ensures that employees can be compensated for work-related injuries. It protects employers from extended lawsuits that happen from workplace injuries. The Nebraska Workers’ Compensation Court requires employers with at least one employee to have a valid policy, and penalties and fines will be assessed for those who fail to adhere to the law.
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