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Workers’ Compensation Insurance in Alabama

Workers' Compensation Insurance in Alabama

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If your business has employees in the state of Alabama, you’ll need to make sure you adhere to Alabama’s Workers’ Compensation Insurance laws. Workers’ Compensation provides medical and financial benefits for employees who suffer work-related injuries or illnesses or for their survivors in the case of an employee death.

Who needs Workers’ Compensation Insurance in Alabama?

Alabama requires all employers with at least five employees total to obtain Workers’ Compensation Insurance. Businesses that construct or assist in the construction of single-family residential dwellings are also required to obtain Workers’ Compensation Insurance. In Alabama, an “employee” is generally defined as any individual who performs services for another under a contract of hire, express or implied, oral or written, and is not an independent contractor. 

The Alabama Workers’ Compensation Law (WCL) defines all of the requirements for Workers’ Comp in Alabama, and the Alabama Workers’ Compensation Division (WC Division) monitors, enforces, and administers the program. Ensuring your company is in compliance is critical, as there are serious penalties and fines for those who fail to abide by state regulations.

What employees are covered under Workers’ Compensation in Alabama?

Almost all workers are covered under Workers’ Compensation in Alabama. If you provide work or services for an employer, and you are not an independent contractor, you will likely be eligible for Workers’ Compensation Insurance. 

The following are categories of employees that are eligible for Workers’ Comp coverage:

The following are categories of employees that are generally excluded from Workers’ Comp coverage:

What Workers’ Compensation benefits do employees receive?

Under Workers’ Compensation in Alabama, employers are required to provide the following benefits to employees who are injured in the course of employment:

Medical Benefits

Temporary Total Disability Benefits

Temporary Partial Disability Benefits

Permanent Partial Disability Benefits

Permanent Total Disability Benefits

Death Benefits

What are the penalties for breaking Alabama Workers’ Compensation laws?

Failure to adhere to the Workers’ Compensation laws set out by the WCL can result in significant fines and even imprisonment. In order to avoid any costly penalties, it’s important to consult the WCL or your insurer to ensure you are in compliance. Below are the major ways in which companies can be penalized:

Failure to Secure Coverage

Failure to Pay Benefits

How much does Workers’ Compensation Insurance cost in Alabama?

According to the National Academy of Social Insurance Workers’ Compensation Report (November 2020), the average employer cost for Workers’ Compensation in Alabama was $1.01 per $100 of covered wages. This figure is estimated across all insurers and all industries, so the cost to your particular business may vary.

How does the Workers’ Compensation claims process work in Alabama?

Employees who suffer work-related injuries must notify employers in writing within five days of the ancient. If the injury is not reported within the five-day period, employees may lose the ability to receive benefits that might have accumulated during that period. If the notification is not submitted within 90 days of an accident, the employee may forfeit the ability to receive Workers’ Comp benefits.

After learning of an injury, employers must submit a report to the WC Division within 15 days. Employers must provide injured employees with necessary medical care. Employers may select the initial physician to provide treatment for a work-related injury, but employees have the right to select a different physician for continuing treatment. Employers may require employees to choose their medical provider from a list provided by the employer. Employers or insurers must pay medical bills within 25 working days. 

Weekly benefit payments to eligible employees must begin within 30 days. Employers have the option of paying an injured employee’s regular wages during the period of disability, rather than paying Workers’ Compensation benefits. 

Alabama Workers’ Compensation Insurance Resources

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