All Arizona businesses with one or more employees are required to carry workers’ comp—an insurance policy that compensates employees for work-related injuries and illnesses. This insurance covers things like medical costs, lost wages, and death benefits.
Let’s dive into everything you need to know about Arizona workers’ comp.
The Industrial Commission of Arizona (ICA) requires all businesses with one or more employees, whether they are employed full-time or part-time, to carry workers’ comp insurance coverage.
Coverage is not required for:
An employee may choose to reject coverage by filling out the Employee’s Notice of Rejection of Terms of the Arizona Workers’ Compensation Law form. The employee must fill this form out twice and give one copy to their employer, who files a copy with their insurance provider.
In Arizona, comp benefits provide employees with 66% of their average monthly wage if they get sick or injured on the job, up to a maximum of $5,393.37 a month in 2023. The insurance also pays for their medical bills so they can recover.
Here’s a full list of what workers’ comp can cover in the state:
*Disability benefits fall into four categories, which help determine how long an employee will receive benefits–and how much they’ll get:
Arizona uses a “no-fault” system, which means that, in most cases, it doesn’t matter who or what was the cause of the accident. The worker is still entitled to medical benefits and other compensation.
There are three options for getting workers’ comp in Arizona:
Purchasing from a private insurance agent is usually the easiest and most affordable option.
If you purchase through a private insurer, you can use Hourly to make the process even more convenient and low-cost. Hourly’s easy-to-use platform eliminates guesswork by paying your workers’ comp premiums based on real-time payroll numbers, rather than estimates.
If you have an injured employee, and their injury happened at work or was caused by their work, you should report the injury to your workers’ compensation insurance carrier and the Industrial Commission of Arizona (ICA).
As an employer, you are required to file an Employer’s Report of Injury Form within 10 days of when you first learn about the accident. You’ll need to provide your policy number, along with other detailed information about the injury.
But it’s the injured worker’s responsibility to file the actual claim, which they must do within a year from the date of the injury (or from the date on which they became aware of the injury). They can do this by filing a Worker’s and Physician’s Report of Injury Form with both the claims division of the ICA and your insurance carrier.
If an employee becomes ill because of their work, the same time limits apply, but instead of the date of injury, they start from the date on which the employee first began experiencing symptoms.
Currently, the maximum amount you can get on workers’ comp is $5,393.37 per month for employees on temporary or permanent disability. The maximum changes every year to reflect the state’s current income averages.
You can find the most recent number on the Industrial Commission of Arizona’s website. Workers’ compensation payouts vary greatly depending on the circumstances of the injury and other factors.
Employers must report a workers’ comp claim within 10 days of when they first learn about the accident. An employee must file a Worker’s Report of Injury Form within one year of the date of injury or date of first symptoms.
If an employee’s injury or illness is serious enough, they could potentially receive workers’ compensation benefits for the rest of their life. In most cases, there’s no time limit to when benefits will end. The only exception is if a worker decides to settle their case.
When an employee settles a claim, they accept a lump sum payment as compensation for their injuries, illness, and/or lost wages. After a settlement, the case becomes closed and the employee cannot reopen it later on. That’s why it’s best to seek legal advice before settling a case.
Not carrying workers’ comp in Arizona is a class 6 Felony, and you can be charged between $1,000 and $10,000. If one of your employees files a claim and you don’t have coverage, the ICA will pay for the worker’s benefits out of their Special Fund Division, then bill you for the total amount, plus a penalty of either 10% or $1,000, whichever is higher.
With good coverage, you’ll protect your business’s bottom line and ensure your employees’ medical care is covered if they get sick or hurt on the job.
If you don’t have a workers’ comp policy, call your insurance agent or broker to find out about the best policy for your needs—and ask them about getting started with Hourly.
From Phoenix to Tucson, Hourly makes workers’ comp convenient and affordable for Arizona small businesses just like yours.
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