Workers’ Compensation Insurance in Pennsylvania
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Pennsylvania workers’ compensation law

Pennsylvania has taken steps to reduce employer workers’ compensation insurance costs, while encouraging businesses to provide a safe work environment for employees.

Who needs workers’ comp insurance in Pennsylvania?

If you’re a business owner with employees in Pennsylvania, you are required to carry workers’ compensation insurance for all employees. Coverage benefits any employee who is injured or acquires an illness on the job by providing a percentage of lost wages and financial assistance for medical expenses and ongoing treatment.

An employer that maintains a workplace safety committee that is certified by the state is eligible to receive a 5% discount on a workers’ compensation policy premium.

Is workers’ comp mandatory in Pennsylvania for part-time employees?

Pennsylvania law states that any employee who is injured on the job is eligible for workers’ compensation benefits, regardless of whether that person is performing full-time, part-time, or seasonal work.

Do you need workers’ compensation insurance in Pennsylvania if you are self-employed? 

If you’re self-employed, also called a sole proprietor, you don’t need workers’ compensation. Pennsylvania doesn’t mandate coverage, but it is available if you choose. Self-employed workers in high-risk industries can still receive lost-wage assistance and other benefits through a workers’ comp policy. It’s also possible that a company looking to hire you as a contractor might hesitate if you don’t carry your own coverage.

What are the penalties for not having workers’ comp insurance?

Employers can face civil and criminal penalties for failure to have adequate workers’ comp coverage. If an employee is injured on the job and the employer is uninsured, the employee’s benefits will be paid from the Uninsured Employers Guaranty Fund, and the employer will be responsible for reimbursing the fund. This would include costs, interest, penalties, and other fees.

In addition, the uninsured employer opens itself up to litigation for any injuries sustained if the employee decides to sue for damages. Often, the amount of damages awarded is more than what the employer’s cost would have been for workers’ compensation insurance.

If it is found that an employer failed to maintain workers’ compensation coverage, each individual responsible for that lapse could also be criminally charged. That person could be found guilty of a misdemeanor, which would carry a fine up to $2,500 and up to a year in jail. If the failure to comply is intentional, it could be a felony charge with a fine of up to $15,000 and up to seven years in prison.

Criminal counts, fines, penalties, and jail time can increase for each day the employer failed to maintain workers’ compensation insurance.

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What is the average cost for workers’ compensation insurance in Pennsylvania? 

Estimated employer costs for workers' compensation in Pennsylvania are $1.34 per $100 covered in payroll.

There are four methods for how to buy workers’ compensation insurance in Pennsylvania:

  • Purchase workers’ compensation insurance through an agent or broker. Insureon provides an online option to compare quotes from several carriers with one application.
  • Purchase directly from a private-sector insurance carrier.
  • Apply for self-insurance. This is an option for large companies that have operated for three or more years.
  • Obtain insurance from the State Workers’ Insurance Fund.

Costs for workers’ compensation insurance vary because they depend on the level of risk involved for specific employees. Different jobs have different associated hazards, which are typically classified through class codes.

Meeting workers’ compensation Pennsylvania requirements 

The state Department of Labor & Industry regulates workers’ compensation insurance in Pennsylvania. Exemption applications or other required documentation must be filed with the department.

The only circumstance in which a Pennsylvania employer would not be required to carry workers’ compensation insurance is if all of its employees fall into a category for someone who is exempt from workers’ compensation insurance in Pennsylvania:

  • Federal employees
  • Longshoremen
  • Railroad employees
  • Individuals who are casually employed (i.e., not in the regular course of the employer’s business)
  • Individuals who work out of their own homes without the control or management of the business
  • Agricultural laborers who earn less than $1,200 per calendar year and who work no more than 30 days per calendar year
  • Domestic workers
  • Sole proprietor or general partners
  • Individuals who have been granted a religious exemption
  • Executive officers who have been granted an exemption
  • Certain licensed real estate salespeople who are exempt based on qualification as independent contractors

There are nuances and specific conditions that apply with each category. Check with a licensed insurance agent to ensure that you’re following the laws correctly for your situation.

Workers’ compensation death benefits 

In addition to providing compensation for lost wages and medical treatments to an injured worker, the dependents of someone who dies on the job can obtain workers’ compensation death benefits. Pennsylvania qualifies the following people as dependents:

  • Spouse
  • Child under 18 or full-time student up to age 23
  • Child of any age who is physically or mentally incapacitated
  • Parents who depend on the deceased person for financial support
  • Siblings under the age of 18 or who are full-time students until the age of 23 who depend on the deceased worker for financial support

Workers’ compensation death benefits also include up to $3,000 for burial expenses.

Workers’ comp settlements in Pennsylvania

Workers’ comp settlements in Pennsylvania provide an opportunity for all stakeholders to close a claim. Typically the injured employee gives up rights to future claims in exchange for a sum of money. Often, the payment is awarded as a lump sum, but some injured workers will obtain compensation benefits in the form of a structured settlement, which means that payments are made in installments over a period of time.

It’s possible for an injured worker to obtain a commutation, which is when a lump sum is awarded in lieu of weekly benefits but the worker does not give up rights to future benefits like medical treatment.

Workers’ compensation statute of limitations in Pennsylvania

The statute of limitations to file a claim petition for an injury sustained on the job in Pennsylvania is three years from the date of injury. However, the employee is required to seek treatment with an approved provider within 90 days after the injury.

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If you are ready to explore workers’ comp insurance options for your Pennsylvania business, start a free online application today to compare quotes from multiple carriers.

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