Nebraska workers' compensation insurance
All Nebraska employers with one or more employees, full-time or part-time, are required to provide workers’ compensation insurance. This policy covers the cost of medical treatment for work-related injuries.
Who needs workers’ comp insurance in Nebraska?
Nebraska imposes strict workers’ compensation insurance rules on employers doing business there. Unless otherwise excluded, employers with one or more employees are required to provide insurance.
The law applies to virtually all employees, including those:
- Working in private industry
- Employed in state and local government
- Working in a part-time capacity
- Who are minors
- Employed by charitable organizations
A limited number of employee types are exempt from coverage. They include:
- Federal employees
- Railroad employees
- Independent contractors
- Most volunteers
Household domestic servants and some workers in agriculture are also exempt but can be covered at the employer’s discretion.
In Nebraska, employees must file a workers’ comp claim within two years from the injury or illness date.
Do Nebraska business owners need to be covered by their workers’ comp policy?
It depends on the type of business you operate. Here’s how the rules of the Nebraska Workers’ Compensation Court work:
Sole proprietors, partners, and LLC members are exempt from buying workers’ comp insurance for themselves. However, they may purchase coverage if desired. This can be a smart decision since health insurance providers can deny claims for work-related injuries.
Executive officers of state corporations who hold 25% or more of their firm’s common stock aren’t considered employees and thus are exempt from workers’ comp coverage. Executive officers who want to elect workers’ comp protection must notify their insurance company and inform the entity’s corporate secretary.
Executive officers of nonprofit corporations in the state who earn $1,000 or less from their work for the corporation are also exempt.
Are independent contractors required to have workers’ comp coverage in Nebraska?
Nebraska employers are not required to provide workers’ comp for independent contractors.
However, it’s important to make sure independent contractors are properly classified. While the Nebraska workers' comp statute does not define “independent contractor,” case law offers several factors to consider when making this determination on a case-by-case basis.
Furthermore, the Nebraska Supreme Court applies a 10-factor test, with no single factor being determinative.
All Nebraska employers with one or more employees, full-time or part-time, are required to provide workers’ compensation insurance.
What does workers' comp cover for Nebraska businesses?
Here are several examples of how workers' compensation insurance coverage helps pay expenses for injured workers:
- A fast food worker is burned while preparing an order for a customer. Workers' comp covers their medical bills, pain medication, and lost wages while recovering.
- A nurse strains their back from lifting and rotating patients. Workers' comp covers their medical provider appointment and pain medication, as well as a reimbursement for any out-of-pocket expenses relating to the claim.
- A truck driver develops neuropathy in their legs from many years of driving cross country during their course of employment. Workers' comp covers the cost of the physician appointments, medication, physical therapy, and disability payments.
- A retail store employee slips on a wet floor and hits their head. In this instance, workers' compensation would cover their emergency room trip, head MRI, and any following medical expenses during their recovery.
What does workers' compensation insurance not cover?
Additionally, your workers' comp policy won't cover willful negligence, as well as:
- Injuries caused by intoxication, drugs, or company policy violations
- Personal injuries claimed after a firing or layoff
- Wages for a replacement worker
- Occupational Safety and Health Administration (OSHA) fines
How much does workers' compensation insurance cost in Nebraska?
The average cost of workers’ compensation in Nebraska is $50 per month.
Your workers' comp premium is calculated based on a few factors, including:
- Payroll
- Location, such as Omaha, Lincoln, and Bellevue
- Number of employees
- Industry and risk factors
- Coverage limits
- Claims history
How is workers' compensation purchased in Nebraska?
Business owners in Nebraska have a few choices when it comes to buying a workers' compensation policy:
- Private insurance companies. You could contact each workers' compensation insurance carrier independently to compare their products and rates, but that's where agents and brokers like Insureon come in. As the nation's leading digital insurance agency, Insureon partners with 30+ top-rated insurance carriers to deliver the right coverage for your business. Fill out an easy online application to get started.
- Purchase coverage from the state risk pool. Nebraska legislature states, if a business owner is unable to qualify for a workers’ comp policy, they can buy it from Nebraska's assigned risk pool supplied by Travelers Property Casualty Company of America. This is the insurance plan of last resort for high-risk Nebraska employers.
- Self-insurance. Nebraska employers also have the ability to self-insure their workers’ compensation claims, however they must first file an application with the Nebraska Workers’ Compensation Court. Once approved, a self-insurer must submit a surety bond and evidence of having excess insurance with the Workers’ Compensation Court. This means they’ll pay for their own workers’ comp medical and rehabilitation costs rather than submit them to a workers’ comp insurer.
Verified workers' compensation insurance reviews
Insurance providers use a specific formula for calculating workers' comp premiums:
Here's a breakdown of this equation:
- The classification rate reflects your employees' risk. Each worker has a classification code for the type of work they do. Insurers look up those codes in a database to find the associated rate, which is lower for office workers and higher for carpenters, tree trimmers, and others with a higher rate of injuries. Like most other states, Nebraska relies on the National Council on Compensation Insurance (NCCI) database.
- The experience modification rate (EMR) reflects your business's risk. The average experience modification rate is 1.0, which means a business is similar in risk to others in its profession. Higher EMRs reflect higher risks, such as a history of claims. The EMR only comes into play for annual workers' comp premiums of at least $5,000, so it's not a factor for many small business owners.
- The insurer multiplies these numbers with your payroll divided by 100 to determine your workers' compensation rate. Workers' compensation audits are typically done each year to ensure your business pays the right premium for this coverage.
How can Nebraska business owners save money on workers' comp?
To save money on workers' comp insurance, it's important to make sure you classify your employees correctly. Employees with desk jobs or other jobs with a low risk of injury cost less to insure. This also helps you avoid misclassification fines.
In some cases, small business owners can choose to buy pay-as-you-go workers' compensation. This type of workers' comp policy has a low upfront premium, and lets you make payments based on your actual payroll instead of an estimated payroll. It's useful for businesses that hire seasonal help or have fluctuating numbers of employees.
A ghost policy is a cheap option in some states, including Nebraska. A ghost policy is a workers' comp policy in name only. It provides no protection or medical benefits, but can fulfill contractual requirements for a workers' comp certificate at a reduced price.
Finally, a documented safety program can help lower workers' comp costs. A safer workplace means fewer accidents, which helps keep your premium low.
How does workers’ compensation work in Nebraska?
Workers' compensation helps cover medical expenses related to workplace injuries and occupational diseases. It can pay for doctor's appointments, medications, and all other medical care related to the employee's injury.
It also provides partial wages while an injured worker recovers, usually equal to two-thirds of their average weekly wage.
Workers' compensation benefits in Nebraska include:
- Medical benefits
- Temporary total disability benefits (TTD)
- Temporary partial disability benefits (TPD)
- Permanent total disability benefits (PTD)
- Permanent partial disability benefits (PPD)
- Permanent partial disability to the whole body
- Permanent partial loss of a body part
- Permanent impairment benefits
- Vocational rehabilitation
- Death benefits
Policies usually include employer's liability insurance, which pays for legal expenses if an employee blames their employer for an injury. However, under the Nebraska Workers' Compensation Act, an employee forfeits their right to sue their employer over an injury or disease once they accept benefits.
For details, read the Nebraska Workers’ Compensation Court's FAQ for employers.
What are the penalties for not having workers’ comp in Nebraska?
The State of Nebraska takes workers’ compensation seriously. If you fail to comply with the law, you may face one or more of the following penalties:
- A civil fine of up to $1,000 for each violation. Each additional day of noncompliance will be treated as a separate violation.
- Imprisonment for up to one year, a $1,000 fine, or both.
- The revocation of your company’s ability to do business in the state.
Also, an injured employee may sue you for damages in district court, an action in which the employer will lose its common law defenses.
Nebraska workers’ compensation law for death benefits
If a worker’s injury results in a wrongful death, the surviving spouse will receive two-thirds of the employee's average weekly wage until the spouse gets remarried. Surviving children are also entitled to a death benefit.
In addition, the worker’s family may receive $6,000 to cover funeral expenses.
Workers’ comp settlements in Nebraska
A workers’ compensation settlement is an agreement between the injured employee, employer, and insurer that resolves a workers’ compensation claim. This benefits both the employee and the employer.
In Nebraska, many workers’ comp claims end in settlements. This means the parties involved in the case—the injured employee, the company, and the insurer—must agree on a lump-sum payment amount. In exchange, the employee (or the employee’s survivors) must agree to the insurer stopping future benefit payments.
Employees who wish to enter into an agreement to take a lump-sum payment in lieu of future benefits must file an application with the Nebraska Workers’ Compensation Court.
Get free workers’ comp quotes with Insureon
If you are ready to buy workers' compensation coverage, start a free application with Insureon to compare quotes from top-rated insurance carriers. A licensed insurance agent will help answer your questions and explain your coverage options. Once you find the right policy, you can usually begin coverage and get your certificate of insurance in less than 24 hours.
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