Iowa workers' comp 101
Iowa is home to 272,555 small businesses, making up a whopping 99.3% of all businesses and 48% of all employees in the state.
With small businesses employing such a large chunk of Iowa’s workforce, it’s clear that leaving the corporate world to own and operate your own business has caught the attention of the masses.
Making your own hours, being your own boss, and having total creative freedom and control over your products, services, and marketing are just a few of the perks of owning your own business. However, there are responsibilities small business owners must take on, namely ensuring that your employees are covered in case of workplace injury, illness, and other issues regardless of fault.
If you’re one of the many small business owners in Iowa and you employ at least one worker, you need to have proper small business insurance to keep you and your worker(s) safe.
Read on to learn how Iowa workers’ compensation can protect you and your small business, as well as seven essential facts to keep in mind.
What do Iowa small business owners need to know about workers’ compensation?
If you own a small business in Iowa, there are a few things you need to know about insurance. In general, it’s recommended that you carry general liability, but it’s required that you have workers’ compensation insurance even if you have just one employee.
Employees who made less than $1,500 in the year before their injury are typically exempt, but it’s best to check before you let any employees go uncovered.
Workers’ compensation is a state-mandated insurance program that provides medical, disability, survivor, burial, and rehabilitation benefits to employees who are injured, fall ill, or killed due to work-related means.
You may also want to cover yourself under your workers’ comp insurance policy, especially if you perform physical labor or any strenuous activity. While such coverage isn’t required by Iowa law, it’s still a good idea to cover yourself for the protection it offers.
For example, let’s say you own an extermination company, and you succumb to a work-related injury or illness from harsh pesticides, a bite, or a sting. Even though you have health insurance, without a workers’ comp policy, your insurance provider can deny your claim, saddling you with hospitalization, medication, and after-care bills.
7 essential facts about workers’ comp insurance in Iowa
- Workers’ compensation insurance provides protection to Iowa small business employers and employees by covering the financial burden that may come with treatment costs, disability benefits, lost wages, and after-care services that may come from a workplace injury or illness.
- In Iowa, there are certain employees who are exempt from workers’ comp coverage. These include:
- Agricultural employees working for small businesses with a cash payroll of less than $2,500 in the year prior to injury
- People working for or with a relative
- Police officers and firefighters entitled to benefits under a pension fund
- Exchange labor in agriculture
- Employees entitled to benefits under any rule of liability or compensation method for federal employees put in place by the Congress of the United States
- The president, vice president, treasurer, or secretary of a family farm corporation and their spouse, parents, siblings, children, and stepchildren
- As a small business owner, you’re exempt from including yourself under your workers’ compensation insurance unless you’re:
- The sole proprietor or partner active in the proprietor/partner’s business on a full-time basis
- A member of an LLC (limited liability company)
- An independent contractor
- The average cost of workers’ compensation insurance in Iowa is $1.25 per $100 in covered payroll.
- The following factors can affect the cost of workers’ compensation insurance in Iowa:
- Your payroll
- Where your business is located
- Industry and risk factories
- Coverage limits
- Your claims history
- Number of employees
- In Iowa, workers’ compensation benefits typically include:
- Death benefits
- Vocational rehabilitation benefits
- Healing period benefits
- Medical treatment for the employee’s injuries or illness
- Temporary total disability benefits
- Temporary partial disability benefits
- Permanent partial disability benefits
- Permanent total disability benefits
- If you don’t have workers’ comp insurance in Iowa, you could be looking at the following penalties:
- Revocation of your insurance and all self-insurance privileges
- Civil injunctions
- Assessment of up to $1,000 payable to the Second Injury Fund of Iowa for failing to properly file employee injury reports
- Assessment payable to the Second Injury Fund of Iowa for continuously failing to begin paying weekly benefits within 11 days
- Employee award of up to 50% of additional benefits for delaying, denying, or otherwise failing to pay weekly benefits
Curious about Iowa workers’ comp rates?
Just as every small business is unique, so is every situation in which workers’ comp is needed. Have questions on what types of disabilities workers’ compensation covers, time limitations, and other benefits? Speak with a trusted advisor. You can also check out this FAQ on Iowa’s workers’ comp insurance laws.
Remember, every situation is different and state workers’ compensation laws are subject to change, so be sure to do your research and speak with a trusted advisor.
Please note that this content is intended for educational purposes only. As laws change regularly, refer to your state legislation and/or an advisor for specific legal counsel. If you’re a small business owner, learn more about the basics of workers’ comp or check your current rate in 3 minutes.