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If your business has employees in the state of Indiana, you’ll need to make sure you adhere to Indiana’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 Indiana?
Indiana requires all employers who have employees to obtain Workers’ Compensation Insurance. In Indiana, an “employee” is generally defined as someone who is in the service of an employer and is not an independent contractor.
The Indiana Workers’ Compensation and Occupational Diseases Acts define all of the requirements for Workers’ Comp in Indiana, and the Workers’ Compensation Board of Indiana (WCB) 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 Indiana?
Almost all workers are covered under Workers’ Compensation in Indiana. If you provide work or services for an employer, you will likely be eligible for Workers’ Compensation Insurance.
The following are categories of employees that are eligible for Workers’ Comp coverage:
- Full-time and part-time employees
- Apprenticeships and internships
- Participants under the federal School to Work Opportunities Act
The following are categories of employees that are generally excluded from Workers’ Comp coverage:
- Independent contractors
- Domestic workers
- Casual workers
- Farm or agricultural workers
- Railroad employees engaged in train service
- Members of municipal corporations and fire and police departments
- Real estate professionals
- Members and managers of a limited liability company (LLC)
What Workers’ Compensation benefits do employees receive?
Under Workers’ Compensation in Indiana, employers are required to provide the following benefits to employees who are injured in the course of employment:
- Medical expenses, including any medical treatment deemed necessary by a physician.
- Travel, lodging, and meal expenses if an employee must travel outside of the county of employment in order to receive medical treatment.
- Lost wages if the injured employee must miss work in order to receive medical treatment.
Temporary Total Disability Benefits
- If an injured employee is medically unable to return to work during recovery or has been cleared by a physician to return to work with medical restrictions but the employer is unable to accomodate, he or she is eligible to receive Temporary Total Disability (TTD) benefits, which provides 66 and two-thirds percent of a worker’s average weekly wage pre-injury.
- The Indiana Workers’ Compensation and Occupational Diseases Acts establish minimum and maximum average weekly wage amounts, which may change yearly. These amounts are used to calculate TTD benefits. From July 1, 2020 through June 30, 2021, the minimum average weekly wage was $75, and the maximum was $1,170. The maximum total compensation an injured employee can receive was $390,000 for injuries in this time frame.
- TTD benefits are available until the injured employee has recovered from the injury as much as medically possible, or he or she can return to work. The maximum amount of time a worker can receive benefits is 500 weeks.
Temporary Partial Disability Benefits
- An injured employee may be able to return to work while recovering in a partial or limited capacity. If the employee works fewer hours or receives lower wages during this time, he or she may be eligible for Temporary Partial Disability (TPD) benefits. TPD benefits provide 66 and two-thirds percent of the difference between a worker’s pre- and post-injury average weekly wage.
- TPD benefits are available for up to 300 weeks or until the injured employee has recovered from the injury as much as medically possible or the employee is able to earn wages equal or greater than pre-injury wages.
Permanent Partial Impairment Benefits
- If an injured employee recovers from an injury but has a permanent partial impairment, he or she may be eligible for Permanent Partial Impairment (PPI) benefits.
- The total amount that is paid out for PPI benefits depends on a number of factors, including how impaired you are and how this affects your ability to earn a living, what body part or body functions were injured or lost, and if it is a total or partial loss. These factors are ultimately manifested in two ratings: a physician’s impairment rating, and the degree of permanent impairment as outlined in the Indiana Workers’ Compensation and Occupational Diseases Acts.
- Once a total PPI benefit amount is determined, benefits are paid out weekly as 66 and two-thirds percent of the injured employee’s average weekly wage pre-injury, up until the total PPI award has been reached.
Permanent Total Disability Benefits
- If an injured employee is unable to resume any form of work due to a permanent disability, he or she may be eligible for Permanent Total Disability (PTD) benefits.
- PTD benefits provide either a PPI award for the permanent physical impairment, or weekly benefit amounts of 66 and two-thirds percent of the employee’s average weekly wage pre-injury, up until the maximum total compensation of $390,000, whichever is greater.
- Employers are required to pay up to $10,000 to cover funeral expenses.
- A worker’s surviving dependents may be eligible to receive 66 and two-thirds percent of the deceased employee’s average weekly wage, which are paid until the employer has paid the maximum total compensation of $390,000 in aggregate to the employee or any dependents.
What are the penalties for breaking Indiana Workers’ Compensation laws?
Failure to adhere to the Indiana Workers’ Compensation laws can result in significant fines and even imprisonment. In order to avoid any costly penalties, it’s important to consult the Indiana Workers’ Compensation and Occupational Diseases Acts or your insurer to ensure you are in compliance. Below are the major ways in which companies can be penalized:
- Failure to comply with any part of the Indiana Workers’ Compensation and Occupational Diseases Acts may be charged as a class C misdemeanor, punishable by a fine of up to $500 or up to 60 days of imprisonment, or both.
Failure to Purchase Coverage
- Failure to secure adequate Workers’ Compensation Insurance may be charged as a class A misdemeanor, punishable by a fine of up to $5,000 or up to one year of imprisonment, or both.
- Non-complying employers may also be forced to shut down operations until they show proof of adequate coverage.
Failure to Record and File Requisite Reports
- Employers are required to keep a record of any and all workplace injury or disease claims and file a report with the WCB if an injured employee must be absent from work for more than one day.
- Failure to comply is punishable by fines of $50 for the first violation, $150 for the second violation, and $300 for the third and any subsequent violations.
Failure to Provide Disability Benefits
- Failure to provide timely and adequate disability compensation is punishable by fines of $50 for the first violation, $150 for the second violation, and $300 for the third and any subsequent violations.
- If an employer fails to act in good faith or exercise due diligence when settling or adjusting workers’ compensation claims, the WCB may issue fines between $500 and $20,000.
- If an employer commits fraud related to workers’ compensation claims, they may be charged with a felony, punishable by a fine of up to $10,000 or up to six years of imprisonment, or both.
How much does Workers’ Compensation Insurance cost in Indiana?
According to the National Academy of Social Insurance Workers’ Compensation Report (October 2019), the average employer cost for Workers’ Compensation in Indiana was $0.75 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 Indiana?
The claims process in Indiana begins with the employee. If an employee suffers a work-related injury or illness, he or she must immediately report the condition to the employer, either orally or by written notice within 30 days of the accident. Any delays can result in potential loss of benefits. For occupational diseases, the employee should provide written notice to the employer as soon as he or she is unable to work because of the condition.
An employee making a claim must also file the appropriate application with the WCB. The “Application for Adjustment of Claim” must be filed with the WCB within two years of the day of the accident or the day first the employee was unable to work due to an occupational disease.
After being notified of a workplace injury or illness, an employer must file a report with their insurer within seven days. The insurer will then notify the WCB within seven days. Employers have 30 days to either accept or deny a workers’ compensation claim. If the employer denies the claim, they have 30 days to file a denial with the WCB.
Indiana Workers’ Compensation Insurance Resources
For more information on Indiana Workers’ Compensation laws and requirements, please visit the following resources: