What is Workers’ Compensation Insurance?
While physicians and dentists are obligated to take precautions to ensure their workplaces are safe, accidents still happen. This is where Workers’ Compensation Insurance was designed to help.
Workers’ Compensation is a form of insurance that is essentially a compromise between labor and management. The Workers’ Compensation Insurance policy provides wage replacement and medical benefits to employees injured or sickened in the course of their employment—either on the premises or away while acting on behalf of the practice. In exchange for this, workers relinquish their right to sue their physician or dental employers for the tort of negligence.
In general, a Workers’ Compensation Policy is a worker’s exclusive remedy for workplace injuries. It pays a portion of lost wages directly related to a work-related accident or illnss, compensation for past and future economic loss to compensate for permanent and partial physical impairments, medical expenses related to the on-the-job injury, and benefits to dependents of workers killed during the course of employment. As you can see, the policy combines disability insurance, health insurance, and life insurance into one plan.
Workers’ Compensation Policies are meant to eliminate the need for expensive and time-consuming litigation. Employees relinquish their right to collect for pain and suffering in exchange for not having to prove fault on the part of their employer in the event of a loss. So, under Workers’ Compensation Insurance, workers receive defined benefits regardless of whether they or their employer are partially or fully at fault in an accident.
What Injuries are Covered by Workers’ Compensation Insurance?
Injuries sustained by a worker “in the course and scope” of employment are covered by Workers’ Compensation Insurance. These include injuries from accidents, workplace violence, terrorist attacks, and natural disasters.
Workers’ Compensation Insurance also covers certain illnesses and occupational diseases contracted in the course of employment. For example, if a healthcare worker contracts AIDS from a needle puncture at work, the medical expenses and lost wages are covered by Workers’ Compensation Insurance.
Who is Required to Purchase Workers’ Compensation Insurance?
A medical and dental practice in the State of Florida is required to purchase Workers’ Compensation Insurance when it employs four or more employees, generally defined as people performing services at the direction of the employer. Florida allows sole proprietors and partners to cover themselves if they choose. Corporate owners are covered unless they exclude themselves.
It is advisable for a practice to purchase Workers’ Compensation Insurance regardless of the number of employees, in order to exempt the employer from becoming legally liable for the injury or illness of their employees. A single illness of an employee could bankrupt a practice which chooses not to purchase Workers’ Compensation Insurance. State inspectors are working hard to administer harsh fines and shut down those practices that are required to carry Workers’ Compensation Insurance but do not carry it.
Is Workers’ Compensation Insurance Part of Any Other Insurance Policy
No, a Workers’ Compensation Insurance Policy must be purchased separately.
How are Workers’ Compensation Premiums Determined?
Premiums for Workers’ Compensation Insurance are determined by the employer’s industry classification code and by annual payroll. The more risk involved in the business, such as roofing, the higher the premium. The rate for physician and dental offices is relatively low, because the risk of injury or sickness is low. The 2015 rate for a healthcare office is $.44 per $100 of payroll.
What can a Doctor or Dentist Do to Reduce His Workers’ Compensation Insurance Premium?
The best way for a physician or dentist to manage premium is to manage risk. A small practice may not be able to retain a Risk Manager on staff. Nevertheless, someone in the office should be responsible for loss control to keep workers safe, manage workers’ compensation insurance claims, and return employees to work quickly. The last thing a practice wants is to be assigned to the Assigned Risk Plan, or insurer of last resort, where the premiums are significantly higher than those of a standard carrier.
Some companies offer dividend programs for practices with a premium above the minimum which do not have workers’ compensation losses. Gracey-Backer, Inc. is privileged to have an excellent program with an “A” (Excellent) rated carrier to return 30% of your premium in the form of a dividend (as set by the Board of Directors) for offices who do not have claims. Even if there is a claim, the insured practice is guaranteed a 10% return premium in the form of a dividend. Please call for more information on the excellent Workers’ Compensation Insurance Program, offered exclusively by Gracey-Backer, Inc.
John Gracey Backer, CPA
John Gracey Backer, CPA, is the Treasurer of Gracey-Backer, Inc., an Insurance Agency in Delray Beach, Florida specializing in All Lines of Malpractice, Professional and Personal Insurance for the Healthcare Provider. He can be contacted at 800-272-6055 ext 128, or at firstname.lastname@example.org.