Every state has specific requirements in place regarding workers' compensation insurance and every state regulates the laws concerning workers’ comp within that state.
If you're an employer doing business in Colorado, here are answers to frequently asked questions about workers' comp insurance.
Do I have to have workers' compensation insurance?
Yes. Under Colorado workers' compensation laws, all businesses with one full-time or part-time employee are legally required to carry workers' comp insurance.
There are exceptions, however. They include:
- Motor carriers that lease vehicles to or from drivers, under specific circumstances
- Independent contractors
- Domestic workers (including nannies and au pairs) who work less than 40 hours per week and less than five days a week (For example, a domestic worker who works three hours per day, five days a week would be considered an employee, requiring workers’ compensation coverage, even though the total hours are only 15 hours in the week)
- Sole proprietors and partners in a partnership, though the construction industry has special rules for this
- Real estate agents/brokers with a contract working solely on commission
- Casual farm and ranch labor, or employers of casual maintenance around the employer’s place of business. Wages to these individuals cannot be more than $2,000 per year
- Volunteers (other than statutory)
What is workers' compensation?
Workers' compensation is the medical and lost wage benefits paid to workers when job-related illness or injury happens. Workers’ compensation pays out benefits to an injured worker, which helps protect both businesses and employees from financial loss when an employee gets sick or injured while performing work.
Who pays for workers' compensation?
Employers do and it is illegal to pass the cost to the workers.
That said, you may qualify for a discount on workers' compensation insurance premiums of up to 10% if you show initiative in preventing accidents. To be considered, you must demonstrate risk management commitment for at least one year, then apply to the Premium Cost Containment Board for certification.
How does Colorado workers' compensation work?
When and how to file a workers' comp claim follows a strict five-step claims process. Here are the five steps in Colorado:
- Report an injury or illness: This step belongs to the employee. Whether the injury is large or small, reporting it is crucial. When injured on the job, an employee has ten days to provide you a written report of the injury. Then you have ten days from receiving the notice to file a claim with your insurance carrier.
If an employee does not report an injury to the employer at the time of the incident, or you, as the employer, fail to report the injury to your insurance carrier, the employee can still file a claim with the Division of Workers' Compensation within two years. If the employee files with the Division, you have 20 days to accept liability with a General Admission or deny liability with a Notice of Contest. If you deny liability, the employee has 45 days to apply for an expedited (60-day) or standard (120-day) hearing.
- Initial treatment: Ill or injured employees should seek medical treatment right away. In non-emergency situations, you must provide a Letter to Injured Worker or a list of designated providers from which to choose at the time the injury is reported to you. In an emergency, the worker should seek treatment from the nearest hospital, urgent care, or clinic.
- Resume work: Once the designated medical provider approves the worker's return to work, you can use a modified duty task list until they reach full and certain recovery.
- Ongoing care: The medical provider will provide care until reaching maximum medical improvement (MMI).
- Claims closure: You have 30 days from the MMI date to file a Final Admission of Liability (FAL) with the division.
What does workers' compensation cover (and not cover)?
Policies generally cover injuries, fatalities, and illnesses that occur as a result of a work-related accident or exposure. In Colorado, short and long-term medical coverage can include:
- Claims-related employee medical expenses
- Mileage reimbursement for medical appointments
- Ongoing care, including medical supplies, equipment, and prescriptions
- Some related legal fees
Non-medical benefits can include:
- Death benefits to an employee’s widowed spouse, minor children, and other dependents if the employee dies from a work-related incident, as well as a portion of the funeral expenses
- A portion (two-thirds, 66% or 2/3) of lost weekly wage while they are recovering
- An award for permanent partial disability based on the impairment rating assigned by a doctor
- An award for permanent total disability or in cases of permanent disability (two-thirds ⅔ of their average weekly wage over the previous year)
There are certain situations that may impact or reduce workers' compensation benefits:
- Workers' comp may not provide benefits for certain non-traditional workers, such as unpaid interns or volunteers
- Employees may not receive workers' compensation benefits if their injuries occurred during a fight that the worker started
- Workers' comp does not cover injuries that an employee intentionally self-inflicts
- On-the-job injuries due to alcohol or illegal drugs, including medical marijuana, will result in benefits being reduced
- Benefits will be reduced for injuries or illness that result from the employee violating safety rules
- Injuries that occur because the worker misled you about their ability to perform a task will result in benefits being reduced.
How do I file a workers' compensation claim?
Contact your workers' compensation insurance carrier as soon as you are aware (or within 10 days) of receiving the written work-related illness or injury report.
Why does worker classification matter?
Providing an inaccurate classification could result in premium overpayment or audit, fines, or even legal charges.
The key to getting an accurate workers' comp insurance quote is to determine the correct class codes for your employees.
To determine the class code(s) that best describes your business, you may contact your insurance agent, your underwriter, or the National Council on Compensation Insurance (NCCI).
Here’s some information that will help determine the classification code(s) that describes your business:
- Your industry
- The overall nature of your business and operations
- Your primary services or products you offer (e.g. digital software, consulting services)
- Tasks performed by your business (e.g., clerical, labor, sales)
- Whether there are contractors or subcontractors that also require coverage
There are occasions when determining your employees' class codes gets complicated. Uncomplicate it with Pinnacol Assurance's smart workers' comp technology and dedicated team of underwriters to get the correct information and the best rates.
How quickly can I get workers' compensation coverage with Pinnacol?
Get started with our quick 90-second online application and start your policy in less than five minutes.