Iowa employees working under most employment relationships must receive workers’ compensation coverage. This policy covers medical expenses when an employee is injured on the job.
In Iowa, almost every business that has employees is required to purchase workers' compensation insurance. However, certain categories of employees are exempt from workers’ comp coverage. Exemptions include:
Even when it's not required by law, it's a good idea to carry workers' comp for the protection it offers. Health insurance providers can deny claims for work-related injuries, so you may decide to purchase this policy for yourself, especially if your work involves physical labor.
As for when it's required, it depends on your ownership status. For example:
What’s more, the president, vice president, secretary, and treasurer of a corporation (other than a family farm corporation) may exempt themselves from coverage. But no more than four corporate officers can do so. They must also file a Rejection of Workers’ Compensation or Employers’ Liability Coverage [PDF] with Iowa Workforce Development.
The State of Iowa does not consider proprietors, partners, and LLC members to be employees. However, they may elect to participate in workers’ comp should they wish to.
Employers with exempt employees may include them in their workers’ comp program by adding them to their workers’ compensation insurance policy.
To save money on workers' comp insurance, it's important to make sure you classify your employees correctly. Employees with desk jobs or other jobs with a low risk of injury cost less to insure. This also helps you avoid misclassification fines.
In some cases, small business owners can choose to buy pay-as-you-go workers' compensation. This type of workers' comp policy has a low upfront premium, and lets you make payments based on your actual payroll instead of estimated payroll. It's useful for businesses that hire seasonal help or have fluctuating numbers of employees.
Finally, a documented safety program can help lower workers' comp costs. A safer workplace means fewer accidents, which helps keep your premium low.
When an employee is injured in the course of employment, workers' compensation covers the cost of their medical care. It also provides disability benefits for injured workers who are recovering or who suffered a permanent impairment.
Policies usually include employer's liability insurance, which can help cover legal expenses if an employee blames their employer for an injury. However, the exclusive remedy provision in most workers' comp policies prohibits an employee from suing their employer if they accept workers' comp benefits.
Workers' compensation benefits in Iowa include:
For details, visit the Iowa Division of Workers’ Compensation (DWC) FAQ.
Iowa business owners can compare quotes and purchase a policy from private insurance companies. Insureon offers this service with its online insurance marketplace.
If they’re unable to get insurance from standard-market insurers, they can buy it from the Iowa Assigned Risk Pool, which is administered by the National Council on Compensation Insurance (NCCI). You can access this “last-resort” coverage through your local insurance broker after providing written proof of two insurance company declinations.
Iowa employers who qualify can self-insure their workers’ compensation claims. This means they’ll pay for their own worker medical, rehab, and death benefits rather than submit them to an insurance carrier.
To become a workers’ comp self-insurer, an employer must:
Employers must also provide periodic proof that they have the financial resources to make good on their workers’ comp obligations.
Violating Iowa’s workers’ compensation statute is a serious matter. If an employer fails to maintain workers’ comp insurance or to pay required benefits from its self-insurance account, the state may apply multiple civil penalties, including:
According to Iowa Code, employers must pay death benefits when a covered employee dies from a work-related injury or illness. Individuals who depended on the employee for financial support are eligible for these benefits, the size of which will depend on whether they were wholly or partially dependent.
A surviving spouse, children under the age of 18, and disabled children of any age are considered to be wholly dependent. So are children under age 25 who can prove they were dependent on the worker. Other individuals who are mentally or physically disabled and dependent on the worker are also eligible for weekly workers’ compensation benefits.
Survivors who are wholly dependent are eligible to receive payments amounting to 80% of the deceased worker’s average weekly after-tax pay. The 80% amount is divided among all whole dependents and can’t be more than Iowa’s statewide average weekly wage. Partial dependents only receive benefits if the worker had no whole dependents.
Finally, in Iowa, the survivors of a worker who dies from a job-related injury or illness can receive a lump sum worth as much as 12 times the average weekly pay in Iowa for funeral expenses.
A workers’ compensation settlement is an agreement between the injured employee, employer, and insurer that will close out a workers’ compensation claim. This benefits both the employee and the employer.
In Iowa, settlements take two main forms:
An agreement settlement is one where the parties involved determine the amount and extent of compensation due related to the incident. Once they agree on this amount, they submit the details to the Iowa Workers’ Compensation Commissioner, who confirms the compensability of the claim and preserves the employee’s future rights.
A compromise settlement happens when there’s a dispute about whether the employee deserves compensation. Once the parties agree on a settlement amount, it is submitted to the state’s Workers’ Compensation Commissioner. Once approved, both parties give up any future rights to further compensation for the settled injury.
In Iowa, employees with injuries must file a workers’ comp claim no later than two years after the injury or three years after the last benefit payment.
The time limit for filing a First Report of Injury form is within four days of notice or knowledge of an injury that causes an employee to lose three days of work, permanent injury, or death.
If you are ready to explore workers’ comp insurance options for your Iowa business, start a free online application today to compare quotes from top-rated carriers.