Alaska requires every business with one or more employees in the state to obtain workers’ compensation insurance, unless the employer has been approved to self-insure their workers’ comp claims.
Nearly all workers in the state of Alaska must be covered under a workers’ compensation policy. However, employees who do certain types of work are exempt, including:
Alaska’s governing workers’ comp statute requires employees to be covered under certain special circumstances, including:
Alaska employers who hire independent contractors or construction subcontractors must provide them and their employees with workers’ compensation coverage unless the contractor can provide proof of insurance.
If you hire an independent contractor or subcontractor who lacks workers’ comp insurance and one of their workers gets hurt, you may be liable for that person’s medical expenses under your own workers’ comp arrangement.
It depends on your ownership status.
Sole proprietors don’t have to include themselves in their firm’s workers’ comp insurance. However, they must comply with the state’s rules for covering employees. The same is true for partners in a business partnership.
Members of a limited liability company who have at least a 10% ownership interest are exempt from coverage.
Executive officers of municipal or religious organizations or legally registered nonprofit corporations are exempt unless their corporation wants to cover them.
Executive officers with at least a 10% ownership share are exempt from workers’ comp coverage.
Although the above individuals can opt out of their firm’s workers’ comp plan, they must still maintain coverage for all of their employees, as well as for any family members or friends who work with them (subject to the exceptions listed earlier). They can also elect to participate in workers’ comp if they think it’s beneficial to them.
Alaska business owners can compare quotes and purchase a policy from private insurance companies. (Insureon offers this service with its online insurance marketplace.) If two nonaffiliated commercial insurers decline your workers’ comp application, you will be eligible to buy coverage from the Alaska Assigned Risk Pool, which is administered by the National Council on Compensation Insurance (NCCI).
Another option for securing workers’ compensation insurance is to simply pay for your own claims. This is called self-insurance. To qualify for this arrangement, Alaska employers must:
An employer who meets these conditions may apply for a certificate of self-insurance by completing and submitting application Form 07-6129. The application must be accompanied by a number of supporting documents.
The estimated workers’ comp expense for Alaska employers is $2.32 per $100 in covered payroll, according to the National Academy of Social Insurance [PDF].
Employers in Alaska who fail to maintain workers’ compensation insurance for their employees will be subject to a variety of civil penalties, including:
The families of Alaska employees who died after sustaining a work-related injury or illness are entitled to receive a death benefit of $10,000 for funeral expenses and $5,000 for the employee’s surviving spouse and / or children.
In addition, workers’ comp insurance must pay weekly benefits to dependents. The total benefit must equal the deceased employee’s compensation rate for total disability. Widows, widowers, and children are considered to be dependents.
Children living in the worker's household or who had been supported by a deceased worker, regardless of parentage, are also handled as dependents. Unmarried dependent children are eligible to receive benefits until age 19 or older while attending high school or while in their first four years of trade, technical, or college education.
If there is no widow, widower, or child, then parents, grandchildren, or brothers and sisters who depended on the deceased worker become eligible for benefits.
All questions of dependency are determined at the time of injury or death.
A workers’ comp settlement, also known as a “compromise and release,” resolves a disputed workers’ comp claim. In exchange for an agreed-upon sum, employees agree to give up some or all of their claimed benefits.
In Alaska, lump-sum payments of permanent total disability benefits, which the state’s workers’ compensation board has granted, are not permissible unless the employee establishes that it is in his or her best interest.
If the state approves a settlement, employees can also consider receiving their payment in the form of a structured settlement. This involves splitting the payment into a series of installments over time.
Alaska law presumes that waiving future medical care or vocational rehabilitation benefits to which a worker is entitled is not in the person’s best interest. However, the state will allow waivers of future medical or rehab benefits if an employee shows it’s in his or her best interest.
The maximum time allowed for filing a workers’ comp claim other than those relating to occupational disease is four years from the date of injury.
If you are ready to explore workers’ comp insurance options for your Alaska business, start a free online application today to compare quotes from top-rated carriers.