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In almost every U.S. state, employers are required to carry workers’ compensation insurance if they have a certain number of employees. If you’re a business owner in Montana, you must carry workers’ comp insurance if you have at least one employee. Like most states, Montana specifies a few employee types that are exempt from compulsory coverage.
In this article, we’ll go over who you need to cover, who is exempt, and possible penalties for non-compliance.
How does workers’ compensation insurance in Montana work?
The state of Montana requires you to carry workers’ compensation insurance as soon as you have one employee. You can purchase coverage directly from an insurance company or through an insurance broker.
If your business is considered high-risk, you might have difficulty finding an affordable insurance plan on the private market. If that’s the case, you can seek out coverage through a high-risk pool like the Montana State Fund.
Some larger employers can also qualify to become self-insurers. To become a self-insurer, a company must periodically submit proof that it has the financial capability to handle injury claims from any and all of its employees.
Who needs workers’ compensation insurance in Montana?
Nearly every employee in Montana must be covered by workers’ compensation insurance, with some exceptions. Employees who are exempt from mandatory coverage include:
- Domestic workers
- Some commission-based salespeople (real estate, insurance and securities)
- Sole proprietors
- Partners in partnerships
- Independent contractors
- Corporate officers
As a business owner or sole proprietor, you don’t have to purchase workers’ compensation insurance for yourself. That doesn’t mean you shouldn’t get coverage. Sustaining an injury or illness while performing your work can lead to sizable hospital bills, medical costs and a lengthy recovery period. Investing in workers’ comp for yourself could save you from a brutal financial setback.
What are the penalties for not having workers’ comp in Montana?
If you choose to not provide workers’ compensation coverage for your employees, you could face a minimum fine of $200. Note that $200 is the minimum, and employers who go without coverage for long periods of time can face much steeper penalties. If one of your employees gets injured or sick on the job and you don’t have proper coverage, you could end up liable for their medical expenses and lost wages.
What does workers’ comp cover?
If one of your employees is injured or becomes ill on the job, workers’ comp can cover their immediate medical expenses such as ambulance rides, emergency room visits, x-rays, surgery and prescription medications.
For example, if a kitchen employee reaches into a sink and slices their hand on a broken glass, they might require medical attention. Workers’ comp could cover the costs of their emergency room visit, stitches and pain management prescriptions.
Many work-related incidents can leave employees unable to work for several weeks or months. Workers’ comp can provide some relief for employees in the form of partial wage replacement.
If an employee breaks their foot in a work-related accident, they could end up stuck at home for multiple months. While they’re out of work, workers’ comp would cover some of their lost wages.
Some work-related injuries require long-term care such as physical therapy or pain management. Often, these injuries are more the result of repetitive workplace stress rather than a single traumatic incident. Chronic back issues for construction workers and carpal tunnel syndrome for office employees are two common examples of the types of workers who might receive ongoing care due to repetitive stress. If their claim is approved, workers’ comp can cover the costs associated with their ongoing care.
If the unthinkable happens and an employee passes away because of a workplace incident, workers’ comp can cover funeral costs and other death benefits for the deceased worker’s family or beneficiaries.