Wisconsin employers are required to carry workers’ compensation insurance unless they are self-insured or qualify for an exemption.
Wisconsin strives to attain near-universal workers’ compensation insurance coverage for employees working in the state. Four guidelines define which employers must provide coverage under state law:
Firms with three or more full-time or part-time employees must immediately secure workers’ compensation insurance for their workers.
Companies with one or more full-time or part-time employees who earned $500 or more in any calendar quarter must have workers’ comp insurance in place by the first month of the next calendar quarter (no later than the 10th day of that month).
Farmers who employ six or more workers on the same day for 20 days of the calendar year must buy insurance no later than 10 days after the 20th day of employment. January through December is considered a calendar year.
Out-of-state employers with employees in Wisconsin must have workers’ compensation insurance with an insurer licensed to do business in the state. The policy must have an endorsement naming Wisconsin as a covered state.
Although Wisconsin workers’ comp coverage is nearly universal, the state allows a few exemptions based on the type of work performed. It excludes:
It depends on your ownership status. For example, sole proprietors, partners, and members of limited liability companies (LLCs) are exempt from workers’ compensation. However, if their job activities are risky, and they believe they’d benefit from being covered, they can join the plan.
Corporate officers in Wisconsin are considered employees and thus must participate in their firm’s workers’ comp plan. However, if their company is closely held and has no more than 10 stockholders, one or two corporate officers may opt out of the firm’s workers’ comp insurance coverage.
Corporate officers who opt out must have their name displayed on the workers’ comp policy endorsement page.
Just because a sole proprietor, partner, or LLC member does not participate in workers’ comp does not mean other firm employees are exempt. If they fail to qualify for a work exemption, they must be covered even if the business owner isn’t.
No, but the state enforces a strict, nine-part test to determine whether the person is a legitimate independent contractor. Consult this document for details.
Wisconsin 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 Wisconsin Compensation Rating Bureau. You can access this “last-resort” coverage through your local insurance broker.
Wisconsin employers who qualify can self-insure their workers’ compensation claims. This means they’ll pay for their own workers’ comp claims rather than submit them to an insurance company.
However, Wisconsin’s Department of Workforce Development urges employers to carefully assess whether self-insurance is suitable in light of their financial condition. Before making a decision, the state asks employers to consider the following issues:
The estimated workers’ comp expense for Wisconsin employers is $1.74 per $100 in covered payroll, according to the National Academy of Social Insurance [PDF].
Violating Wisconsin’s workers’ compensation statute is a serious offense. If you fail to comply, you may face one or more of the following penalties:
The spouse, children, and other dependents of a Wisconsin employee who died as a result of a job-related injury or illness may qualify for a death benefit under state law. The benefit includes:
Death benefits first go to wholly dependent family members, including a surviving spouse or a registered domestic partner or surviving children under age 18 or who are physically or mentally disabled.
Partially dependent family members may qualify for death benefits only when there are no wholly dependent family members.
The total death benefit for all beneficiaries will be no more than four times the deceased employee’s annual pay.
Under state law, workers’ comp insurance must pay for burial expenses up to $10,000.
In Wisconsin, most workers’ comp claims end in settlements. This means all involved parties – the injured worker, the employer, and the insurance companies – agree on a lump-sum settlement amount in exchange for the employee (or the employee’s survivors) agreeing not to pursue any future benefits.
Settlement amounts may cover payments for past or future medical bills. They may also include employer penalties for things like safety violations, payment delays, or bad faith.
The settlement agreement, which must be in written form and signed by the injured or ill worker, a representative of the employer, and the insurance company, must be filed with the Wisconsin Department of Workforce Development and approved by one of its judges.
In Wisconsin, employees with injuries must file a workers’ comp claim no later than two years after the injury or within 12 years if the employer knew about the injury (or should have known).
No statute of limitations applies to occupational diseases and some traumatic injuries.
If you are ready to explore workers’ comp insurance options for your Wisconsin business, start a free online application today to compare quotes from top-rated carriers.