Understanding Workers compensation is a four part series written by Bill Stankevitz, senior vice president of St. Charles, IL-based Wine Sergi&Co. Llc.  He has been involved with the insurance industry in many capacities for the last 45 years and invites people to visit his blog “insurance answers for business” at www.mysweethaven.com/blog.

Moving companies and workers compensation insurance have always had an important (yet stormy) relationship so the more a mover understands about workers compensation, the better off they are.  This series of articles can help.

In part one, Bill reviews a time line of the birth of workers compensation and gives an explanation of  it’s intended areas of coverage for medical care, compensation for lost wages during recorporation, and settlement for permanent and temporary (full and partial) disabilities.  The compensation for the above mentioned areas were and are intended for work-related injuries (and illness).

The article explains that there are different ways that states can operate their workers compensation program including exclusive monopolistic funds, competing funds and for most states purchase of workers compensation insurance from an approved private insurance company.

In recent years independent contractors (1099 workers) have become a hot topic with both the IRS and workers compensation insurance underwriters because of a company’s premium amount and rating (which greatly affects premium amount) can be swayed by the inclusion of independent contractor compensation as employee wages.  That is why the subject is so important to businesses because of the huge ramifications and expense workers compensation premiums can have.  Even small businesses can be affected by tens of thousands in premiums in a single year. 

The next part of the article concentrates on classification of employee and accuracy.  It covers how premiums can vary greatly due to what is reported to the workers compensation insurance company and how the NCCI (National Council on Compensation Insurance) rates a company.  To read more on the initial exploration of what workers compensation is read (Understand Workers Compensation Part I) in its entirety along with the other 3 articles in the series to get a better grip on this important part of  businesses.

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