Did you know that the state of California almost guarantees that workers will be compensated? That guarantee is made possible thanks to the existence of the State Compensation Insurance Fund. It is a fund that was created as a public enterprise by the state of California. Headquartered in San Francisco, the fund was initially established in 1913 by the Boynton act and became operational a year later in 1914. The goal was to provide owners with affordable workers' comp which extended to all businesses in the state of California.
Why was State Workers Compensation Insurance Fund Necessary?
The inclusion of the State Workers Compensation Insurance fund was made possible by amending the California Constitution to ensure the state worker's comp system was strong. Policies offered through the State Compensation Insurance fund are available to businesses in California. But they are many options from which business owners can choose.
Standard Plans provide small and mid-sized businesses with good premium rates based on state classification codes and for the industry it operates in. Large companies have more options including schedule rating, alternative dispute resolution program, and premium discounts. Today, the fund almost guarantees that workers who file for compensation with their bosses will get compensation. That said there is more to the fund than most people realize.
The Grand Bargain
Workers' compensation laws tend to be called the Grand Bargain. The reason perhaps is because it's a bargain between owners and employees. Companies by law are obligated to provide workers injured while working help. Employers that fulfill their duty are not plagued by lawsuits by injured employees.
In almost all states workers' comp is the remedy for all employees who end up being injured when on the job. So, the laws, for the most part, prohibit employees from going ahead with a lawsuit against their boss when they sustain work-related injuries. In a state like California almost all workers are protected by workers' compensation, and so lawsuits brought on by injured workers are rare.
Most Workers are Covered by Law
Sure! Workers' compensation protects most workers, but there are exceptions to the coverage. The exceptions vary from one state to the next but for the most part are minor variations. Generally, all states have excluded people who are maritime workers and others who are under federal workers' comp programs. Many states have also excluded self-employed contractors, agricultural employees, and domestic help. In some states workers belonging to a specific occupation are also not protected like real estate agents, priests, and athletes. If you're not sure how the law in your state applies then contact an insurance agent or perhaps an lawyer.
One of the best things about workers' compensation laws is that benefits are paid without faulting either party. Workers get compensation for injuries sustained when working. They are paid even if the injuries are a result of their negligence like not wearing gloves or that of a fellow worker who may have contributed to the injury. All of this speeds up the claim time so that workers can get the help they need ASAP.
How does State Compensation Insurance Fund Compare to Other State Insurance Policies?
Now before we go into specifics let's start by understanding that there are four states, i.e. North Dakota, Ohio, Washington and Wyoming that prohibit selling workers compensation insurance by private companies. The states listed are often referred to as monopolistic states primarily because employers can only purchase workers coverage from a government-run insurance company.
In the past Nevada and West Virginia were monopolistic but as of late switched to a competitive market after the state fund started having financial issues. In 1999 Nevada opened their workers' compensation fund to private companies and West Virginia opened up their fund in 2008. So, California's State Compensation Insurance Fund isn't monopolistic, but it does differ in the way of policies and coverage when compared to other similar states.
Competitive vs. Monopolistic Funds
The vast majority of states that run compensation insurance funds are competitive which means that they are mainly private insurers. Some of these may serve multiple purposes. Take the State Compensation Insurance Fund for California and New York State's Insurance Fund, both are competitive and they also implement the state legislated assigned risk plan.
A monopolistic fund, on the other hand, is the only source for workers' compensation insurance plans. Because there are no competitors, it is a monopoly. Private insurers aren't permitted to offer these insurance plans to employers.
Other Supported Programs
The State Fund in addition to offering workers' compensation insurance policies throughout California also provides support services and resources to companies. The services include experienced claims adjusters, claim managers, a toll-free claim hotline, SIU (Special Investigation Unit) and in-house lawyers.
The fund also offers many support programs which are aimed at helping bosses improve workplace safety. Also, to help injured workers get back to work. These support services include:
- Loss Prevention: Usually the fund will send over a team of experts who analyze the company's overall safety requirements. They will then suggest amendments and changes to help enhance safety.
- Return to Work Support: Consultants will assist employers with finding places in the company where employees can work for a transitional period. The goal is to help transition recovering employees into regular work, similar to what they were doing before the injury.
- Industrial Hygiene: Experts will find, analyze, anticipate and help to control environmental hazards that can injure employees. These agents include biological substances, physical agents and even chemicals.
- Ergonomics: Usually consultants will assist employers to help find and reduce risk associated with bad ergonomics. The goal is to reduce if not remove incidences of workplace injury which reduces workplace compensation claims.
Now apart from the obvious benefit these programs have for bosses and employees, they also help to reduce workers' compensation premiums. Afterall by mitigating and reducing risk, they are assisting is lowering the number of claims and that affects the premium. So, it is a win-win situation.
Regular Training and Education
The State Compensation Insurance Fund often hosts training on a fairly regular basis. The goal of these training seminars as they are called is to keep employers abreast of the latest advances and legal requirements of workplace safety. Also, all the forms and associated documentation that employers are required to give employees can be found on the Fund's website. All of which helps to ease communication and compliance with the rules.
The State Compensation Insurance Fund like many similar ones in other states operates its network of medical providers. Abbreviated as MPN (Medical Provider Network), it is comprised of doctors, and various other medical professionals statewide. If anything the network is consistently growing so that the waiting time associated with receiving treatment is reduced.
The resources or network is used to provide injured or sick employees with medical assistance. It also allows employers to have control throughout the validity of the claim while employees can continue to have access to expert medical services near their workplace or home.
Buying a Compensation Plan
Any business in California that's interested in purchasing a workers' compensation plan can do so via the State Compensation Insurance Fund via their website. All and any business in the state of California are eligible. However, the specific plans are based on each business's needs and situation. Also, the industry in which a business operates is factored into the plan.
As an employer workers' compensation is a must have. The state compensation insurance fund makes getting the required coverage easier and quicker. However, employers need to strive for the highest ratings which have a direct effect on their premiums. Businesses with higher ratings benefit from lower premiums which is always a win. That said make sure what factors affect ratings and work towards improving it.