Workers Comp Insurance Is Unto Itself
Workers Comp Insurance is now one of the more maligned insurance lines. Other than the Affordable Care Act, much negativity spread quickly throughout the press.
Many employers consider WC as a tax of sorts. Some employers just write the check and let it roll on. Let us look at Five Ways That WC is so unique. Please remember that there are many excpetions to the rule. The references here are to most states, not all states.
- WC does not appear on any paycheck stub, IRS Form 1099, or on any statement that an employee or subcontractor receives from the employer or contractor. (Exception – Washington) Workers Comp remains a purely employer-based variable cost insurance. Even health insurance premiums now appear on W2’s.
- Two rating bureaus set the rates for most of the states. NCCI and WCIRB are the two main rating bureaus that cover a very large portion of the states. However, the insurance carriers can deviate from those rates very easily.
- Workers Comp insurance provides benefits as a second-party insurance. The system does not provide first party insurance such as homeowners or automobile coverages. The injured workers receives benefits as a second party to the employer.
- States oversee every aspect of paying benefits. The enormous amount of forms that states approve for files has been the bane of many adjusters.
- Overall, no two states systems function the same. Similaries do exist but WC is not a coookie cutter type insurance from state to state.
- Bonus – Most insurance lines will exist long into the future. Workers comp insurance may not exist in its current form much longer. I wrote Death of Worker Comp many years ago. The same factors are still in play. Even the pundits that thought I was crazy are now starting to agree that everything may change soon. The Feds are even starting to look at some type of national regulation.
The list could go on for pages and pages. If you see s major one that I missed, please let me know in the comment section.
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