Minnesota law requires every business to provide workers’ compensation insurance to its employees. However, there are some exceptions.
All businesses with employees must provide workers’ compensation insurance in Minnesota. This requirement holds true even if a business only has one employee who works part-time.
Although nearly all Minnesota employees must be covered by employer-provided workers’ compensation insurance, some worker categories are exempt. These include:
In general, Minnesota business owners do not need to be included in their company’s workers’ comp insurance policy, including:
The following requirements apply to the prior exceptions:
For sole proprietors, immediate family members of the owner can also be excluded from the workers’ comp plan. Once a non-immediate family member is hired, you must provide workers’ comp coverage.
For partnerships, workers’ comp coverage isn’t necessary when every worker is a partner or an immediate family member of a partner.
For corporate officers, you must own 25% or more of a closely held corporation with 10 or fewer employees and less than 22,880 hours of payroll in the prior year. A spouse, parent, or child of a corporate officer is exempt. However, employees who are more distantly related to an officer may file a written exclusion request.
For LLC members, the requirements are similar to those for corporate officers of closely held corporations.
If you are one of the above exempt individuals, you can still elect to participate in your firm’s workers’ compensation plan. If your job is risky, having full insurance protection might be a wise financial decision.
Minnesota business owners can compare quotes and purchase a policy from private insurance companies. (Insureon offers this service with its online insurance marketplace.)
If a business is unable to qualify for insurance from a private company, a business owner can buy it from the state’s assigned risk residual market, the Minnesota Workers’ Compensation Assigned Risk Plan. This is the insurance plan of last resort for high-risk Minnesota employers.
Minnesota employers also have the ability to self-insure their workers’ compensation claims. This means they’ll pay for their own workers’ comp medical and rehabilitation costs rather than submit them to their workers’ comp insurer.
The estimated workers’ comp expense for Minnesota employers is $1.06 per $100 in covered payroll, according to the National Academy of Social Insurance [PDF].
If you fail to meet Minnesota workers’ comp insurance requirements, you may be ordered to not hire employees until you secure insurance.
You also may be ordered to pay a fine of up to $1,000 per employee / per week in which you failed to provide workers’ compensation insurance.
If one of your employees suffers a job-related injury or illness during the time you lacked insurance, you may be ordered to pay the person’s workers’ comp benefits back to the state, along with a penalty of 65% of those benefits.
Other penalties may apply, as well.
If an employee dies as a result of a work-related injury or illness, certain family members may be eligible for death benefits. These include weekly payments to cover part of the deceased employee’s income, along with funeral and burial costs.
Eligible family members include:
Other eligible family members include those the deceased worker supported financially: parents, parents-in-law, grandparents, or brothers and sisters.
The deceased worker’s family will receive death benefits equal to no more than 67% of the deceased employee’s average weekly wage, an amount that can’t exceed the maximum set by law each year.
Minnesota law also provides for annual cost of living adjustments to workers’ comp benefits, starting on the third anniversary.
A workers’ compensation settlement is an agreement between the involved parties that will resolve a workers’ compensation claim. This benefits both the employee and the employer. A settlement in a Minnesota workers’ compensation claim falls into two categories:
A to-date settlement resolves the case up to the settlement date, but leaves open the possibility of further action after the settlement date.
A full and final settlement closes the case completely but may leave open the right to continue submitting medical claims.
All settlements are subject to the approval of a workers’ compensation judge at the Minnesota Office of Administrative Hearings.
The statute of limitations for workers’ comp claims in Minnesota is three years from the date of injury or illness as long as the employer filed a First Report of Injury with the Minnesota Department of Labor and Industry.
If the employer didn’t file this report, the statute of limitations is six years from the incident date.
If you are ready to explore workers’ comp insurance options for your Minnesota business, start a free online application today to compare quotes from multiple carriers.