Do you need workers’ compensation insurance as a New Hampshire employer? The answer is likely yes!
Most states have similar workers’ compensation laws, but in this article, we’ll look specifically at the Granite State’s laws. It’s vital that you know when you need it and the risk of not getting it when you are supposed to.
Bottom line: The savings of not having a workers’ compensation policy are not worth the potential fines and legal action you’ll face for failing to comply! Let’s break it down below.
Who needs workers’ compensation in New Hampshire?
So, is workers’ compensation mandatory in New Hampshire? In most cases, yes. You must have insurance as soon as you have any employees, including full-time and part-time workers and family members. This law also applies to nonprofit organizations.
Who does NOT need workers’ comp insurance?
While all employers must have workers’ comp insurance, exempt individuals and entities include:
- Sole proprietors
- Independent contractors
- Partners of partnerships
- Self-employed individuals
- Corporations or LLCs with three or fewer executive officers/LLC members and no other employees
- Direct salespeople
- Real estate salespeople
Corporations and LLCs must get workers’ compensation insurance once they have a fourth officer or LLC member. At this point, all officers, members, and employees are considered employees and would be automatically covered. You can then choose to exclude three executive officers or LLC members from coverage.
Note that while you don’t have to have coverage as an independent contractor, you must meet the criteria and be able to prove that you qualify.
Do business owners need to be covered by workers’ comp?
Again, this depends on your business structure. As noted above, sole proprietors and business owners are not required to purchase workers’ compensation in New Hampshire. However, it doesn’t necessarily mean you shouldn’t! Workers’ compensation can offer significant financial protection if you undergo a serious injury or illness at work. It’s a wise investment, especially if you’re in a high-risk business.
Additionally, sole proprietors or partners operating as subcontractors under a general contractor may have to carry workers’ compensation if the general contractor requires it.
How can I get New Hampshire workers’ compensation insurance?
New Hampshire employers can purchase workers’ comp coverage through the private market by working with a licensed insurance broker or directly with an insurance company.
If your business is in a high-risk industry, you may be unable to find coverage through the private market. Many high-risk companies must buy their policies through the New Hampshire assigned risk pool. You can also turn to the National Council on Compensation Insurance, which manages the pool and provides resources and coverage for employers who can’t get it elsewhere.
Finally, you may opt to self-insure your workers’ compensation policy. This typically works best for larger organizations since your company must pay for its workers’ comp claims. You’ll have to:
- Apply with the New Hampshire Department of Labor
- Guarantee that your company is financially equipped to handle workers’ comp claims (typically via a surety bond)
- Buy excess insurance coverage for claims that exceed your guaranteed coverage
How much does New Hampshire workers’ comp cost?
Insureon reports that the average cost of workers’ compensation in New Hampshire is $44 per month. This rate depends on several factors, including:
- Industry and associated risks
- Claims history
- Payroll and number of employees
- Location
- Coverage limits and deductibles
Do you provide safety programs and practices? If so, you could qualify for discounts on your workers’ compensation premiums. These include safety training, providing appropriate safety equipment, and promoting a culture of safety, all of which can reduce the risk of workplace injuries and lower insurance costs. Learn more about New Hampshire’s safety labor laws.
Another resource that can save employers money and reduce risk to their company is the New Hampshire Second Injury Fund. The fund gives employers an option to limit their compensation costs if a partially disabled employee sustains a work-related injury that leaves them more injured than it would a non-impaired employee. A few quick facts:
- This can be whole or partial compensation.
- The worker’s pre-existing condition should be a permanent impairment that poses an obstacle to obtaining employment.
- It doesn’t matter where or how the employee sustained the original disability.
- The fund is intended to remove potential employment barriers for those with disabilities.
Proper employee classification is also essential to reducing workers’ compensation costs. Workers’ compensation class codes refer to the types of job duties employees perform. These codes indicate the risk level and type of hazard each role or work environment might involve. Workers’ compensation costs are then calculated based on these factors.
For example, office employees who primarily work at their desks all day have a low risk of injury and, therefore, are less expensive to insure. On the other hand, warehouse workers operating heavy machinery likely cost more to insure.
Small business owners may also benefit from a pay-as-you-go workers’ compensation policy. These plans provide low premiums and allow you to pay based on your actual payroll instead of your estimated payroll.
What does workers’ compensation cover?
New Hampshire workers’ compensation insurance typically covers:
- Medical Expenses: Workers’ compensation insurance pays for medical treatment related to work-related injuries or illnesses. This includes doctor visits, hospital stays, surgery, medication, physical therapy, and other necessary medical services.
- Lost Wages: Workers’ comp can also provide wage replacement benefits for employees who cannot work due to an injury or illness on the job. This typically covers a portion of the employee’s lost wages, typically around two-thirds of their average weekly wage, up to a statutory maximum.
- Temporary Total Disability (TTD): If a work-related incident temporarily prevents an employee from working, they may be eligible for temporary total disability benefits. These benefits provide income replacement until the employee can return to work.
- Permanent Total Disability (PTD): An individual who is permanently unable to work due to a work-related injury or illness may be eligible for permanent total disability benefits. These benefits provide ongoing income replacement.
- Permanent Partial Disability (PPD): If an employee suffers a permanent impairment or disability due to a work-related injury but can still work in some capacity, they may be eligible for permanent partial disability benefits. These benefits compensate the employee for the permanent loss of function or impairment.
- Temporary Partial Disability (TPD): If a workplace incident temporarily impairs a worker’s ability to perform some, but not all, of their job duties, they may return to work on a limited basis or in a modified capacity while recovering. TPD compensates the worker for the difference between their pre-injury wages and their wages while working in a reduced capacity.
- Vocational Rehabilitation: In some cases, workers’ compensation may cover vocational rehabilitation services to help injured workers return to suitable employment. This can include job training, education, job placement assistance, and other support services.
- Death Benefits: No employer wants to consider losing an employee on the job—and that’s exactly why workers’ comp is a MUST. If a worker dies as a result of a work accident, your policy provides death benefits to the worker’s dependents, such as spouses and children. These benefits typically include compensation for funeral expenses and ongoing financial support.
Most policies also include employer liability insurance to assist with legal expenses if an employee blames you for an injury or illness. However, workers’ compensation plans typically include an exclusive remedy provision, which states that an employee cannot sue their employer after accepting benefits.
What are the penalties for failing to get coverage?
The fines and penalties for non-compliance with the New Hampshire workers’ compensation mandate can quickly add up. It starts with a one-time fine of $2,500 plus a fine of $100 per employee per day of noncompliance. The penalties apply from the first day of the infraction up to a year. Additionally, any individuals involved in knowingly failing to obtain a workers’ compensation policy will be held personally responsible and subject to penalties.
Plus, if an employee is injured on the job and you don’t have coverage, you could be on the line for all related costs AND any civil penalties. The state could even prevent you from doing business in the state until you comply. And employers who intentionally neglect to get workers’ compensation insurance could face a class B felony.
When do employers have to report a work-related injury?
New Hampshire employers must report work-related injuries within five days of receiving notification from an employee. If you fail to report the incident in time, you could face hefty fines of up to $2,500.
Note that employees have up to two years to report workplace injuries and illnesses. However, you should advise them that it’s best to report an incident immediately.
Get Workers’ Compensation Guidance
Do you have more questions about New Hampshire workers’ compensation requirements? Or are you searching for the best policy to protect your business and employees? BlueLion is happy to provide information and connect you to reputable insurance providers! Contact us today at info@bluelionllc.com or 603-818-4131 to learn more.
The information on this website, including its newsletters, is not, nor is it intended to be legal advice. You should contact an attorney or HR specialist for advice on your individual situation.
