All employers with three or more employees in the state of New Mexico are required to have workers’ compensation insurance. This protects employees who get injured or ill on the job and prevents employers from expensive lawsuits over their employees’ injuries. New Mexico workers’ compensation insurance costs, on average, 89 cents per $100 of payroll―that’s across all industries and class codes.
Shopping for workers’ compensation insurance doesn’t need to be difficult when you use an online referral service such as CommercialInsurance.net. It makes finding affordable workers’ comp simple with one easy-to-digest intake form that’s used to match your business to one of more than 200 partner carriers. Finding the best possible workers’ compensation policy has never been easier.
What Are New Mexico Workers’ Compensation Requirements?
According to the Workers’ Compensation Administration, businesses in New Mexico that have three or more employees must obtain a valid workers’ compensation insurance policy. Employees are defined as anyone who performs work for the business entity, business owners in New Mexico need to cover:
- Full-time employees
- Part-time workers
- Family members
- Temporary workers
- Seasonal employees
Unlike requirements in other states where business owners usually don’t count toward workers’ comp requirements, New Mexico law says owners need coverage if they are materially involved in the day-to-day work of their businesses.
Employers with workers’ comp insurance are protected against lawsuits that could otherwise arise when employees get hurt or fall ill from work-related activities or conditions. Furthermore, New Mexico is considered a “no-fault” state, meaning employees have a right to benefits no matter who is responsible for their injuries or illnesses.
Historically, business owners weren’t required to cover agricultural workers in New Mexico, but that changed in 2016 when the state Supreme Court determined the practice unconstitutional. Now, farmers follow the same three-or-more-employees rule as many other employers in the state.
Who Doesn’t Need Workers’ Compensation Insurance in New Mexico?
While the rules for inclusion as an employee are fairly comprehensive, there are situations where employees are exempt from workers’ compensation requirements. For example, the following employees eligible for exemption in New Mexico:
- Domestic workers
- Casual employees
- Real estate salespeople
- Executive employees
While being an owner who materially participates in the company’s business counts as one of the three eligible employees, not all owners are required to have workers’ compensation insurance. Sole proprietors, limited liability company (LLC) members, and corporate owners do not need to obtain workers’ compensation if they have less than three employees and are not participating materially in daily operations. This would be the case for silent partners.
Those who are exempt owners and perhaps without other employees may opt to get a policy to protect themselves from work-related injuries that could cost them thousands of dollars of income and medical expenses. It is possible to opt for self-employed workers’ compensation if they don’t have employees.
Where Can I Obtain Workers’ Compensation Insurance in New Mexico?
New Mexico is a competitive state when it comes to buying workers’ compensation insurance, which is good for business owners. It means private carriers are competing for your business and that typically leads to better rates when you compare policies. Alongside private carriers licensed in the state, New Mexico small businesses can obtain insurance through the competitive state fund New Mexico Mutual.
Those who cannot find insurance through the private market can obtain insurance through the assigned risk pool administered by the National Council of Compensation Insurance. Business owners need to contact an insurance agent to gain access to New Mexico’s assigned risk pool.
Top Workers’ Compensation Insurance Insurers in New Mexico
Matching your business to the right insurer
Pay-as-you-go workers’ compensation insurance
Affordable workers’ comp for restaurants and food industry businesses
Fast and efficient claims
High-risk industries, such as agriculture and construction
If you’re looking to take the work out of shopping for workers’ compensation insurance, then CommercialInsurance.net is your place to go. With one easy-to-complete application, your policy gets shopped to more than 200 insurance carriers, brokers, and agencies, ensuring you get the right policy for the best possible price. Partners include Liberty Mutual and Progressive Commercial.
The Hartford is a premier small business insurance provider that can get you workers’ comp plus other key commercial insurance policies. The Hartford offers a workers’ comp pay-as-you-go plan that makes sure you won’t be surprised by a major audit bill. By partnering with 170 payroll providers, including QuickBooks, The Hartford lets nearly every small business owner pay accurate monthly workers’ comp premiums.
Liberty Mutual offers a complete gamut of commercial insurance on top of its home and auto policies. It’s an ideal place for a business owner seeking to keep all insurance in one place for convenience. We like how Liberty Mutual underwrites businesses in moderate-to-high risks categories, such as the food and beverage industry. Proper underwriting means you’ll get the right premium for the risk associated with your company.
Chubb is a major international insurance carrier with strong policies underwritten for all states in the United States. It’s a standout for workers’ comp because of its claims, employing registered nurses as case managers to make sure injured workers get the care needed quickly and pointing out red flags that can cost insurance companies and their insureds money in the long run. Small business owners can also get general liability, cyber insurance, and professional liability insurance―all from Chubb.
New Mexico Mutual
New Mexico Mutual is a state-managed workers’ compensation fund that helps business owners obtain coverage when they are shut out of the private market either because of their size, industry risk, or claims history. It’s a good alternative to some other private carriers, making it easier and cost-effective to obtain insurance for some higher-risk occupations such as agriculture and industrial construction.
Can Businesses Self-insure in New Mexico?
The option to self-insure is available to large businesses and government entities. To self-insure, a company must meet the requirements set by the Workers’ Compensation Administration Director that include:
- Being domiciled in the U.S.
- Maintaining a net worth of at least $2.5 million
- Conducting business in New Mexico for at least three years
- Paying a $150 nonrefundable filing fee
- Providing claims history of at least three years
- Putting safety program in place and providing resumes of all its personnel
These requirements are lofty and beyond the scope of most small business owners who are looking to save money on premiums. Thus, while self-insurance is possible, the better course of action is usually purchasing coverage through private carriers.
How Much Does New Mexico Workers’ Compensation Insurance Cost?
The average cost of workers’ compensation insurance in New Mexico across all industries is 89 cents for every $100 of payroll, according to the latest report from the National Academy of Social Insurance. This means that, on average, New Mexico employers pay $890 out of every $100,000 of payroll for workers’ compensation.
However, premiums vary significantly for a variety of reasons. For example, some companies have more payroll than others, so their costs may be higher than the state average. Others may have fewer claims than most, so their premiums are lower. One of the most significant factors impacting workers’ comp costs is the type of work the majority of the employees in a business do. All of these are factored into the cost equation of workers’ compensation.
Sample New Mexico Workers’ Compensation Rates by Class Code
Industry Class Code
5183 Plumbing Contractors
7208 Towing Company
8742 Sales Professional
8810 Clerical - Office
8831 Animal Shelters
8868 Religious Organizations-Church-Temple
9063 Fitness Center
New Mexico Workers’ Compensation Cost Example
Let’s consider a fitness center as an example of how we can estimate workers’ compensation rates. This fitness center has 10 trainers and two desk clerks. The trainers’ salaries total $500,000, and the clerks’ salaries total $60,000.
To estimate the fitness center’s premium, we first separate the two groups’ salaries, divide each by $100, and then multiply the result by the class code rate. This fitness center found a good deal on workers’ compensation and ended up with class code rates on the low end of the range—66 cents for the trainers (class code 9063) is 66 cents and 16 cents for the desk clerks (class code 8810). The math looks like this:
- Trainers: ($500,000 / $100) x 66 cents = $3,300
- Clerks: ($60,000 / $100) x 16 cents = $96
The trainers cost more because they’re around weights and equipment, and that creates more risk. The next step is to add both together to get an estimate of the total premium: $3,300 + $96 = $3,396.
This estimate could go up or down depending on the business’ experience modification rate (EMR). An EMR is a multiplier assigned to the company based on claims made. When a company starts, their EMR is 1 for the first few years. After that, it can go up or down depending on claims history in relation to the industry they are in. If the multiplier goes below 1, that is a favorable claims history, and premiums go down.
New Mexico Workers’ Comp Audit Requirements
There is no way for business owners to know exactly how much they will have in payroll costs at the start of a policy. Things like overtime, unpaid sick leave, new hires, and fires affect payroll costs dramatically. This is why the payroll number used in the calculation of the premium is an estimate. At the end of the policy term, the actual payroll numbers are used to reconcile the premium.
When payroll is underestimated, business owners receive a bill for the remainder that’s due prior to the renewal of the policy. If payroll is overestimated, they get a refund check. Insurance companies don’t keep the excess premium, and they use the new payroll figures to estimate the premium when they renew the policy.
What Does Workers’ Compensation Insurance in New Mexico Cover?
New Mexico workers’ compensation insurance pays for an injured or ill employee’s medical care, including emergency room visits, doctors’ care, prescriptions, and physical therapy. The employer gets to choose the healthcare provider but may defer this to the injured worker. New Mexico is also one of the few states that allow reimbursements for medical marijuana and the only one that has a fee schedule for that purpose.
In addition to medical care, policies make indemnity payments made that include:
- Temporary total disability: These benefits are paid to employees who are temporarily unable to work after an on-the-job injury. Payments are made based on two-thirds of the injured employee’s average weekly wage from the prior 26 weeks.
- Temporary partial disability: Employees who are temporarily disabled but still capable of performing some work are eligible for two-thirds of the difference between the regular and reduced wages.
- Permanent partial disability: Once employees reach their maximum medical improvement, they are eligible for up to 700 weeks of payments, depending on the rating of the permanent disability.
- Permanent total disability: Employees who are not able to work again may get weekly lifetime compensation benefits.
- Death benefits: Policies cover up to $7,500 in funeral expenses, plus survivor benefits for the dependents of workers who died from their work-related injuries. The maximum benefit paid is the worker would have received in temporary total disability payments for up to 700 weeks.
When awarded by a judge, a worker may elect to receive benefits in a single payment. Options include return-to-work lump sums, partial lump-sum payments for debt, and lump-sum settlements.
New Mexico Workers’ Compensation Coverage Example
Ann works at an animal shelter where she helps to socialize dogs that have been brought in but aren’t ready to be adopted yet. One day, Ann gets bit on her hands and forearm trying to break up a dog fight. She immediately goes to the shelter’s director, who takes Ann to the emergency room. Ann needs several stitches for one of the wounds and requires a follow-up visit a week later. Because the wounds are severe and subject to infection, Ann is advised to remain home until there is significant healing.
All of Ann’s medical bills are paid for through the animal shelter’s workers’ compensation insurance policy. Ann doesn’t even need to worry about paying a deductible or copay on her personal insurance policy. She misses eight days of work for which she receives temporary disability payments equal to two-thirds of her average weekly wage of $800. This makes her benefits $532.80 per week.
What Are the Penalties for Not Having Workers’ Compensation Insurance in New Mexico?
Employers who don’t have valid workers’ compensation insurance when they are required to carry it can face penalties. First and foremost, the Workers’ Compensation Administration can halt your business activities. In addition to business cessation, the employer could be subject to a fine of $1,000 per day.
If any workers’ comp claims occur when the employer does not have the required insurance, then the employer could be held liable for any payments made to employees from the state’s Uninsured Employer’s Fund and a 15% to 50% penalty, plus interest and fees.
How Do I File a Workers’ Compensation Claim in New Mexico?
Claims must be filed expeditiously to ensure that employees are given the proper care necessary to get healthy. The first step in the claims process is when the employee notifies the employer of the incident leading to injury. He has 15 days to do so, although that can be extended to 60 days if circumstances warrant it.
The Workers’ Compensation Administration requires employers to make a Notice of Accident form available to employees. An injured worker can use this or notify the employer in writing. Neither is required if the employer has actual knowledge of the occurrence.
The employer signs and dates the Notice of Accident, keeps a copy, and provides the injured worker with another copy. Next, the employer has 72 hours to file a claim with the insurance company. While it’s the insurance company’s responsibility to file a First Report of Injury Form electronically with the Workers’ Compensation Administration, the employer should follow up to make sure this step is completed.
As the claim goes on, employees may receive other paperwork that must be completed. There are often deadlines to provide updates and progress reports to the injury completed by doctors and physical therapists. Failure to comply with these ongoing reports could result in a claim denial or early closure.
New Mexico Workers’ Compensation Deadlines
While there are deadlines provided through the course of the claim, there are two key timelines to keep track of in New Mexico. First, the state requires that employees notify employers within 15 days of an injury or incident that leads to health issues unless something beyond their control makes that impossible. That only extends the time to 60 days.
Additionally, employees have a statute of limitations of one year to file a claim if an employer has started or failed to pay them. This is important for claims for injuries that build over time like an overuse injury, such as carpal tunnel syndrome.
New Mexico Workers’ Compensation Resources
- Contact Information
- Publications & Forms
- Electronic Data Interchange Information
New Mexico is very clear that employers with three or more employees must carry workers’ compensation insurance unless they meet one of the designated exemptions. Even with the exemption, it’s wise to carry the insurance that will prevent lengthy and costly lawsuits. Moreover, failing to get workers’ compensation insurance when you’re required to can mean stiff fines for your business.
Don’t get overwhelmed when shopping for insurance. Instead, use CommercialInsurance.net, a marketplace where you get paired with the best insurance provider for your needs. It’s partnered with more than 200 insurance carriers, brokers, and agencies to bring affordable workers’ compensation to small business owners. Get a free quote in minutes.