The Columbus Dispatch reports that the Ohio General Assembly passed legislation that will make it easier for businesses to secure Workers’ Compensation Insurance for employees who temporarily work across state lines. Through a “fronting arrangement,” Ohio’s state fund for injured workers can directly contract with insurers to provide out-of-state Workers’ Comp policies that are backed in full by the Ohio Bureau of Workers’ Compensation.
Why is this a big deal? Before, businesses with workers who crossed the state lines had to get separate insurance in those border states, which is often difficult and expensive. If Ohio businesses could not comply with those states’ Workers’ Compensation laws, they could be audited or fined.
If you live in Ohio and have employees that work across the border, this is great news. For everyone else, this story prompts a couple reminders.
1. Out-of-State Workers Must Be Covered with Insurance.
As you likely know, every state (except Texas) requires employers to carry Workers’ Compensation Insurance for their employees – even if those employees sometimes work in another state. Workers’ Comp provides benefits to employees who suffer workplace injuries and illnesses. Most policies (except those provided by monopolistic state funds, such as Ohio’s) automatically include Employer’s Liability Insurance, which pays for Workers’ Compensation lawsuits.
2. Every State’s Laws Are Different.
When employees work in a different state than your business operates in, you must follow the Workers’ Comp laws of the other state in addition to your own. Because states control their own laws, each state’s policy requirements are different (and Workers' Comp costs vary widely by the state, too. You can learn more about that in our Workers' Comp Insurance Cost Analysis). A neighboring state might have much different laws than you are used to.
To find out more about each state’s requirements, check out our State-by-State Guide to Workers’ Compensation Laws.
3. Noncompliance Leads to Expensive Consequences.
As the article mentions, if you are caught without adequate insurance for your employees, you could be fined, audited, or worse. In some states, a Workers’ Compensation Insurance violation can lead to civil suits or criminal charges.
Additionally, work-injured workers can sue your business for damages if you don’t have Workers’ Compensation Insurance to cover their medical bills. And because you don’t have coverage, you’ll have to pay for the lawsuit by yourself.
Fortunately, insureon can help small businesses obtain adequate coverage. As long as you don’t live in a state that requires you to find a policy through the state fund, you can fill out our online insurance application to receive free Workers’ Comp Insurance quotes.