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.
Who needs workers’ comp insurance in Alaska?
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:
- Babysitters working part-time
- Noncommercial cleaning employees
- Workers hired to harvest crops and other similar part-time or transient employees
- Sports officials working amateur events
- Entertainers working under contract
- Workers engaged in commercial fishing
- Taxicab drivers working under contract
- Individuals receiving state temporary assistance benefits and who are engaged in required work activities
- Professional hockey team players and coaches as long as they have health insurance
- Real estate agents working under contract
- Transportation company drivers
Special-case employees are eligible for workers’ comp in Alaska
Alaska’s governing workers’ comp statute requires employees to be covered under certain special circumstances, including:
- Work-study high school students receive workers’ comp coverage as if they were state employees.
- Volunteer emergency medical technicians (EMTs) are treated as state employees.
- Special public safety officers named by the Commissioner of Public Safety receive state workers’ comp protection.
- Members of state boards and commissions are treated as state employees.
- Volunteer firefighters receive coverage as if they were local fire department employees.
- Civil defense and disaster relief workers receive state workers’ comp benefits.
- Anyone called into active duty with the Alaska State Defense Force receives state workers’ comp coverage.
Is workers’ comp required for contractors and subcontractors in Alaska?
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.
Do Alaska business owners need to be covered by a workers’ compensation insurance policy?
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.
How does workers’ comp work in Alaska?
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:
- Have done business in the state for at least five years
- Have 100 or more employees
- Have at least $10,000,000 in net worth
- Have the financial resources to meet current and future obligations under the Alaska workers’ compensation law
- Have implemented a safety / loss program
- Provide claims handling in Alaska either through its own employees or through independent, licensed adjusters doing business in the state
- Post any required security bond
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.
What is the average cost of workers’ compensation insurance in Alaska?
Estimated employer costs for workers' compensation in Alaska are $2.27 per $100 covered in payroll.
What are the penalties for not having workers’ comp insurance in Alaska?
Employers in Alaska who fail to maintain workers’ compensation insurance for their employees will be subject to a variety of civil penalties, including:
- Penalties of up to $1,000 per employee, per day in which they fail to provide workers’ comp coverage
- Being shut down by the state (stop-work order)
- Having to pay $1,000 in additional penalties for each day they violate a stop-work order
- Being barred from pursuing job contracts with the state of Alaska
- Being liable personally to pay benefits for injured or sick employees who should have had workers’ comp coverage at the time of their work-related injury or illness
- Possible criminal fines of $10,000 and one year in prison
Workers’ compensation death benefits in Alaska
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.
Workers’ comp settlements in Alaska
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.
Workers’ compensation statute of limitations in Alaska
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.
Compare free workers’ comp quotes with Insureon
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