The employer’s guide to Pennsylvania workers’ comp insurance

Workers’ compensation insurance in Pennsylvania may be required, but that doesn’t mean it has to be complicated.

If you’re an employer in The Keystone State, keep reading to learn about Pennsylvania workers’ compensation law and how you can enroll in coverage.

Is workers’ comp coverage required in Pennsylvania?

You may get to choose what kind of medical benefits you offer your employees or determine if casual Friday fits within your business culture. Still, the one thing you can’t control in Pennsylvania is whether you offer workers’ compensation benefits to your employees.

On a basic level, employers with at least one employee must provide workers’ comp; however, there are some stipulations to keep in mind.

Any individual you can consider an employee, whether they work part-time or are a family member, counts. Even if someone only clocks in for a few hours per week, if they’re on your payroll, they need coverage. Only a few exemptions are allowed when it comes to PA workers’ compensation:

• If you’re a sole proprietor and don’t have any employees, you’re not required to obtain workers’ comp to cover yourself. Some who work in high-risk industries may elect to obtain a policy if they so desire. It’s also important to note that clients do have the ability to request that sole proprietors enroll in coverage as a way to limit their own liability.
• Depending on the legal structure of your business, you may elect to exempt owners, business partners, or executive officers. If it makes sense to do so, there are a few forms your insurance carrier may ask you to complete.
• Those classified as casual workers won’t need workers’ comp benefits, although who is defined as such is a gray area. The PA Department of Labor and Industry doesn’t provide a legal definition for a casual worker. However, it’s widely agreed that these individuals perform sporadic work duties without any commitment to ongoing employment.

If you’re unclear whether you need to enroll in workers’ compensation coverage, it’s best to check with the Bureau of Workers’ Compensation to make sure you’re compliant with state law.

What happens if I don’t enroll in workers’ comp in Pennsylvania?

Running a business sometimes means operating on a tight budget, and it might be tempting to avoid the cost of purchasing small business insurance or workers’ comp coverage. While policy prices will vary, the potential expenses you’d face as a result of going without coverage would likely be exponentially higher. If you specifically elect not to purchase PA workers’ compensation coverage, you can expect the following:

1. Every day an employer is found to be non-compliant, they could face a fine of $2,500 and/or a year in prison. The state considers each day without workers’ comp as a separate offense. While going without coverage often results in misdemeanor charges, some business owners may be found guilty of a felony, fined $15,000, and face up to seven years in prison.
2. In the event of a workplace injury, you may be required to pay out-of-pocket for the cost of your employee’s medical expenses, lost wages, and physical therapy. Depending on the illness or work-related injury, this settlement alone might be pricier than a workers’ comp coverage premium.
3. Should you find you’re not able to offer workers’ compensation benefits to an injured employee, they could sue you for damages above and beyond the cost of medical treatment, wage loss benefits, or partial disability benefits. While a workers’ compensation claim may seem undesirable as an employer, this coverage will protect your business from possibly going bankrupt due to a lawsuit.
4. Business owners could experience a range of other ramifications, including higher rates when they finally elect to enroll in workers’ comp coverage, disciplinary action from the Pennsylvania Department of Labor, and more.

The Pennsylvania Workers’ Compensation Act is designed to protect injured workers and protect business owners from financial collapse. Hence, it’s in every employer’s best interest to enroll in coverage as soon as possible. No matter what industry you’re in, the cost of PA workers’ compensation is far less than paying out of pocket for medical bills, lost wages, or death benefits.

I own a business in Pennsylvania. Do I need to purchase workers’ comp for myself? What about my officers?

In Pennsylvania, you’re not required to purchase workers’ comp for yourself if you’re a sole proprietor, although other types of business structures tend to stipulate specific requirements. Depending on how your business is organized, you or your officers might already be included in coverage, so if you don’t want to be covered under your company’s policy, you’ll likely just need to alert your insurer and fill out a form.

How do I purchase workers’ compensation insurance in Pennsylvania?

Business owners have several options when it comes time to enroll in workers’ compensation coverage, with some processes far more straightforward than others. Depending on the size of your company, the industry you’re in, and a few other factors, you may find that one of these options is better suited to your needs:

• The most traditional way to obtain workers’ compensation insurance is to work with a broker, complete more paperwork than seems humanly reasonable, and provide details about your business, including payroll information and projected revenue. The broker will contact multiple insurance carriers while you’re left waiting to receive a quote. In all, the process can take a few weeks and tends to leave employers in the dark.
• Other business owners opt to apply for insurance through the State Workers Insurance Fund, run by the State of Pennsylvania. The Fund is designed to assist newer businesses in obtaining coverage, particularly when there is no previous policy history. Workers’ compensation laws stipulate that all SWIF applicants will be offered coverage.
• Instead of partnering with a broker, you can choose to enroll in workers’ comp coverage directly through an insurer of your choice. Not unlike option number one, this process will require a great deal of paperwork and supporting documentation.
• In rare cases, companies that have been operating for at least 3 years can apply to be self-insured. As we’ve discussed, a workers’ compensation claim can be expensive when you consider medical care, average weekly wage replacement, and more, so this choice is only recommended for very financially strong businesses.

Are you finding yourself asking why there isn’t an easier way to buy PA workers’ compensation insurance? There is. You can get a quote online in just a few minutes and enroll in a policy with ease.

How much does workers’ comp cost in Pennsylvania?

Similar to other types of insurance coverage, workers’ compensation rates are based on several factors. For most businesses, the size of your payroll will directly relate to your premium—the more employees you have, the more expensive your policy is. However, some facets are in your control, as insurers also consider where your company is located, the type of work your employees engage in, and your workplace safety history.

Most Pennsylvania employers find that coverage costs around $102 per month, but this figure will vary based on the elements we mentioned above. If you want a more exact quote that includes the nuances of your business, you can get a free estimate online. Like the price you see? Enrolling in a workers’ comp policy only takes a few minutes and will provide you with the ultimate peace of mind.

What are the workers’ compensation policy limits in Pennsylvania?

Once you’ve enrolled in a policy, you’ll find that the compulsory workers' compensation system is pretty easy to navigate within. Employers who pay their premiums on time won’t need to worry about whether they have enough coverage, as the state of Pennsylvania sets policy limits automatically based on the industry you’re in.

Additionally, employers who have workers’ compensation insurance can rest assured that their policy will provide all applicable benefits for a specific claim without any limits. Should one of your employees sustain a work-related injury, illness, or occupational disease, your policy will likely pay toward health care provider costs, specific loss benefits, and other expenses related to the employee’s impairment.

Pennsylvania employers are typically pleased when they learn that their workers’ comp benefits have no limits, but sometimes, business owners want to lower their premiums. It’s never advised that you provide false information to obtain a lower rate (in fact, it’s completely illegal), so instead, it’s best to focus on maintaining a strong workplace safety record. If relocating your company makes sense for multiple reasons, you may be able to obtain lower rates due to such a move.

What does Pennsylvania workers’ comp cover?

Every workers’ compensation case is unique, but in general, workers’ comp insurance covers a range of scenarios after a work-related injury occurs. In most instances, your policy will pay toward the cost of all medical providers your employee received care from as well as up to two-thirds of lost wages for the time they were unable to work.

It’s important to note that your insurance company won’t necessarily pay out for any type of injury, as self-inflicted wounds, injuries involving illegal drugs and alcohol, or injuries received while committing a crime likely won’t be covered. However, if your employee sustains a personal injury or develops a medical condition or occupational disease while performing their usual duties, they can file a workers’ compensation claim.

Remember, the Pennsylvania Workers’ Compensation Act was introduced to assist injured workers, but it’s also equally beneficial to business owners. Rather than paying out of pocket for an employee’s medical expenses, lost wages, and more, your responsibility is to ensure the workers’ compensation claim is filed accurately and on time.

What should I do if my Pennsylvania employee is injured and needs to file a workers’ compensation claim?

If one of your employees sustains a work-related injury, you must follow these steps to ensure their safety and recovery, as well as making certain the workers’ compensation claim is filed accurately:

• If applicable, call 911 or make sure the employee receives appropriate medical attention as soon as possible. In situations where the injury isn’t immediate, like if an employee develops carpal tunnel syndrome, it’s still best to follow up on their medical care.
• In Pennsylvania, there are time limits to consider when filing a workers’ compensation claim. While employees have 120 days to inform their employer of a work-related injury or occupational disease, many will do so far sooner. You must document the date of injury and include as much detail as possible in your claim to include the affected body parts, a timeline of how the injury occurred, and more.
• Once you’ve collected the necessary information about the injury, you’ll need to contact your insurance carrier to file a workers’ compensation claim. Since you’ve already documented everything pertaining to the injury, this process should be very straightforward. Remember, the workers’ compensation system is designed to protect you and the injured employee, so it’s best to be fully transparent during this call.

These steps are the most important to make sure the claim is filed correctly and help your employee receive their much-needed benefits. Each injured worker will have different needs based on their injury and may require time off from work to recuperate. If so, you’ll need to submit the Employer’s Report of Occupational Injury or Disease to the Bureau of Workers’ Compensation.

Additional paperwork may be headed your way, including a Workers’ Compensation Medical Form. It’s typically completed by a healthcare provider and gives medical evidence for your employee’s injury. You must send it to your insurer as soon as possible, ideally within 10 days after your employee receives medical treatment.

Finally, your insurance company will provide you with a decision regarding the claim and, if approved, detail the compensation your employee will receive. You can contest denials with the state, but we recommend obtaining legal advice if you choose to file a claim petition.

While the paperwork involved in a workers’ compensation case might sound extensive, it’s far easier to navigate than figuring out how to pay for an employee’s medical expenses out of pocket if you aren’t insured.

As you enjoy your morning cup of coffee, take a few minutes to get a free estimate for Pennsylvania workers’ compensation coverage and see how easy it is to enroll in a policy that protects you and your employees.