Utah Workers Compensation Rates 2019
The Utah Workers Compensation System is different from the way other states administer the ‘Exclusive Remedy’. The business community benefits from these differences in the form of some of the lowest rates for workers comp premium in the United States of America. In the state of Utah, workers compensation is a no-fault insurance system. The fact that Utah uses a no fault system means that benefits are provided to the injured employee no matter who is at fault for the worker injury. One of the most impactful aspects of the Utah Workers Compensation System is the strength of the Assigned Risk Provider. There are also a few bills passing through the Utah State Legislature that may have a positive impact on the rates businesses pay for workers compensation insurance in the future. Here are several aspects that contribute to the strong Utah Workers Compensation System.
How is the Utah Workers Compensation System Different?
Utah Insurance Department?
The Utah Insurance Department is the governing body that regulates the workers compensation system. The Insurance Department approves the premium rating plans used by workers’ compensation insurance carriers. Premium rates charged for workers’ comp in Utah are revised annually based on statistical data provided by the National Council on Compensation Insurance (NCCI).
What is the Utah Labor Commission?
The Utah Labor Commission is another state regulatory agency that handles disputes within the workers compensation system. These disputes invlove an injured worker and either the insurance company or the employer. Because of the success of this commission, less than two percent of all claims wind up in litigation. The saves the system as a whole an enormous amount of money in saved legal fees. In most cases an administrative law judge is assigned to the case in order to determine what benefits an injured workers is entitled to. In some situations, there is a representative with the employer is asked to provide extensive evidence about claims.
Public Private Partnership
The Workers Compensation System in the state of Utah is a public private partnership between the state government and two outside entities. Those entities are the National Council on Compensation Insurance (NCCI) and The Workers Compensation Fund (WCF). NCCI creates classification codes and recommended pure premium rates. WCF is the state provider within the state and they commonly dominate a large percentage of the market.
When it comes to the system for Workers Comp Utah, all employers are required to carry coverage. There are only a few exceptions to this rule. One of those exceptions is that sole proprietors and partnerships who have no employees other than the sole proprietor or partner are not required to purchase coverage. All General Contractors are required to ensure when they hire subcontractors (including sole proprietorships, partners and corporate officers), that those subcontractors have workers comp coverage. If the subcontractors do not have workers compensation coverage the subcontractor is considered an employee of the contractor. When this occurs, the general contractor must carry work comp coverage. Most states have additional exclusions for certain circumstances. Because there are so few exclusions in the state of Utah, all businesses must purchase coverage. This additional amount of businesses who have to purchase coverage contribute to driving the price of premium down.
Why are Utah Workers Compensation Rates so Low?
Strength of the State Fund
The Workers Compensation Fund (WCF) is the strongest assigned risk provider of any state in the country. Depending upon the year, WCF controls nearly 60 percent of the market for workers comp. This dominance of the market place allows WCF to control what other carriers charge for premium. If other carriers want to compete for coverage in Utah, they must keep their premium rates at or near what WCF Charges.
House Bill 288
In 2018, House Bill 288 (HB288) passed the state legislature. HB288 makes it unlawful for employer to interfere with an employee’s ability to seek workers’ compensation benefits. In addition, it made it illegal to retaliate against employees for seeking benefits. This bill establish fines of up to $5,000 for each individual violation.
Senate Bill 75
Senate Bill 75 (SB75) was passed to allow the Division of Industrial Accidents to waive the penalty for failure to purchase workers comp. SB75 states ‘the violation must be the employer’s first violation and the period of noncompliance must be less than 180 days’. This is intended to allow businesses one mulligan when it comes to not securing coverage.