USCC Workers Comp 2023 - 7

PART 1-COVERAGE OF LAWS
Type of Law and Insurance Requirements (Chart I)
Compensation laws are compulsory or elective. Under an
elective law, the employer may accept or reject the act, but if
rejected, the employer loses the three common-law defenses:
contributory negligence, assumption of risk, and negligence
of fellow employees. Practically, this means that all laws,
in effect, are compulsory. A compulsory law requires each
employer within its scope to accept its provisions and provide
for the benefits specified.
* Suits for Damages-Under workers' compensation acts,
employers generally are exempt from damage suits. Where
an employee rejects the act and sues an employer who has
accepted it, the employer usually retains the three commonlaw
defenses. Conditions for rejection of the act often are
so severe as to make the privilege virtually inoperative. In a
few states, however, courts have created exceptions to the
exclusive remedy rule under certain circumstances.
* Security for Payment of Benefits-Most jurisdictions
require employers to obtain insurance and prove financial
ability to carry their own risk.
Chart I notes provisions relating to:
* Insurance requirements.
* Penalties for failure to insure.
* Whether self-insurance or group self-insurance is
permitted.
* Self-Insurers-Some large corporations prefer to assume
liability for workers' compensation and avoid administrative
costs associated with insurance policies.
Self-insurance operates best when an employer has a spread
of risk so large that the employer may benefit from the law
of numbers. It is necessary and desirable that self-insurers
establish their own protective services. Also, the self-insurer
may have to retain attorneys and doctors to handle problems
incident to claims and medical and legal services.
Self-insurance is permitted in most U.S. states, as shown
in Chart I. Chart I also reflects those states that specifically
authorize group self-insurance.
Employers may set up a reserve fund for self-insurance to
pay compensation and other benefits under the workers'
compensation acts of the states. Contrary to the treatment
accorded in insurance premiums, amounts paid into this
reserve fund are not always deductible from gross income
as a business expense for income tax purposes. However,
amounts paid out as cash or medical benefits are deductible.
In many cases, insurance is purchased because such a
purchase can dispose of the item of expense and future cost
in the current year.
Coverage of Laws (Chart II)
Virtually all industrial employment is covered by workers'
compensation. Chart II shows this in detail; it also indicates
the extent of coverage for public employment.
Some jurisdictions cover all private employment; others
exempt those with less than a stipulated number of
employees. Most jurisdictions specifically exclude certain
employments.
Due to the nature of the work, farm labor, domestic
servants, and casual employees are usually exempted. Most
jurisdictions permit employees in an exempted class to be
brought in voluntarily by the employer or the administrative
agency order. Many jurisdictions provide workers'
compensation for all or certain classes of public employees.
Merchant marine and railroad workers in interstate
commerce generally are not covered by workers'
compensation acts and may seek damages under the Federal
Employers' Liability Act.
Coverage of Minors (Chart III)
Minors are covered by workers' compensation. Some
jurisdictions provide double compensation or added
penalties, as shown in Chart III. In many states, minors also
enjoy special legal protections. These are specifically noted
for each state.
Coverage of Occupational Diseases (Chart IV)
Although workers' compensation laws initially had no
specific provisions for occupational diseases, now all states
recognize responsibility for them. Coverage extends to all
diseases arising out of and in the course of employment.
Most states do not provide compensation for a disease that
is an ordinary disease of life or that is not peculiar to or
characteristic of the employee's occupation.
Chart IV outlines provisions governing occupational disease
in each jurisdiction. Generally, compensation is the same as
for traumatic injuries (see Part 2). Medical care is unlimited.
2023 Analysis of Workers' Compensation Laws | 7
USCC Workers Comp 2023

Table of Contents for the Digital Edition of USCC Workers Comp 2023
