Missouri law generally requires every business with five or more employees to provide workers’ compensation insurance. This policy helps cover costs when an employee is injured on the job.
All companies with five or more employees must provide workers’ compensation insurance in Missouri. However, businesses in the construction industry are required to have workers’ comp even if they only have one employee.
The state of Missouri’s legal definition of employee is quite broad; it covers full- and part-time workers, along with seasonal and temporary workers.
The state’s workers’ compensation requirements exempt a limited number of employee types, including:
Employers with fewer than five employees or who employ exempt employers (farm laborers, domestic help, etc.) may elect to buy this coverage.
In general, you have to include yourself in your company’s workers’ compensation coverage. The exceptions are if:
Sole proprietors, partners, and independent contractors can choose to participate in a workers’ comp plan. Buying workers' comp could save you money in the long run, since your health insurance provider could deny a claim for a work-related injury. It also provides wage replacement benefits while you're unable to work.
In limited liability companies (LLCs), members and close family member-employees are normally covered unless they decide to opt out via written notice to the insurance company. However, non-family LLC employees must be covered.
Corporate officers are considered employees and therefore must have workers’ comp coverage.
One exception applies: If the corporation has no more than two owners who are also the company’s only employees, then those individuals can opt out by filing a form with the Missouri Department of Labor's Division of Workers’ Compensation (DWC).
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 suffers a workplace injury or develops an occupational disease, workers' compensation can cover the cost of their medical care. It provides disability benefits while the worker is recovering and for permanent impairment or disfigurement.
Policies usually include employer's liability insurance, which helps cover legal costs if a worker sues their employer over 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 Missouri include:
Missouri business owners can compare quotes and purchase a policy from private insurance companies. Insureon offers this service with its online business insurance marketplace.
If they’re unable to qualify, they can buy it from the state’s assigned risk residual market, the Missouri Workers’ Compensation Assigned Risk Plan. This is the insurance plan of last resort for state employers that are unable to find standard coverage due to their high-risk status (e.g., an excessive number of job-related injuries and illnesses).
Missouri employers also can 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. It also means they will be directly liable for any lawsuits injured or sick employees file against them.
To become self-insured, either as an individual employer or as part of an employer group, you must first be certified by the Missouri Division of Workers’ Compensation.
If you neglect to provide workers’ comp to your workers, you can be charged with a misdemeanor. If found guilty of noncompliance, you may face a penalty of three times the workers’ comp premium you should have paid, up to a maximum of $50,000. You will also be responsible for paying for the medical or rehab expenses of injured employees.
If caught without workers’ compensation a second time, you could be charged with a felony.
If an employee dies as a result of a work-related injury or illness, some family members may receive death benefits. In Missouri, these include weekly payments to cover a portion of the deceased employee’s income, along with up to $5,000 for funeral and burial costs.
Eligible family members include:
The deceased worker’s dependent family members will receive death benefits calculated on the basis of the person’s pre-injury weekly pay. However, it will not be more than 67% of the deceased employee’s average weekly wage, subject to the state’s mandated minimum and maximum benefit amounts.
Benefits will continue until the surviving spouse dies or gets remarried. If the latter happens, the spouse will get a final lump-sum payment equal to two years of benefit payments.
A workers’ compensation settlement is an agreement between the injured worker, employer, and insurer that will resolve a workers’ compensation claim. This benefits both the employee and the employer.
A settlement in a Missouri workers’ compensation claim typically is a full and final settlement. This means the employee forfeits the right to receive any future workers’ comp benefits. However, if the employee will require future extensive medical treatments, the insurance company may agree to pay for them even though the rest of the claim has been closed.
All settlements are subject to the approval of an administrative law judge at the Missouri Division of Workers’ Compensation.
In Missouri, the statute of limitations for workers’ comp claims is within two years from the date of injury or within one year from the last workers’ comp payment.
If you are ready to explore workers’ comp options for your Missouri business, start a free online application today to compare quotes from top-rated insurance carriers.