The Nevada Division of Insurance oversees the general conduct and financial solvency of traditional insurers and self insurers in the workers' compensation market. It also regulates workers' compensation policy forms and endorsements, rates and rating plans, including classification and experience rating plans.
Here are some tips from the division to demystify and simplify workers' compensation insurance:
Nevada has a competitive and healthy workers' compensation insurance market. This provides Nevada employers with the opportunity to comparison shop for the best rate. Three different options are available to meet Nevada's workers' compensation requirements for employers: Purchase a traditional workers' compensation insurance policy; become certified as a self-insured; employer or if qualified, join an association of self-insured employers.
If an employer tries to purchase a traditional workers' compensation policy and is denied by two or more private insurers, it may be eligible for an assigned risk plan administered by the National Council on Compensation Insurance (NCCI).
To qualify as a self-insured employer, a business must:
* Have a tangible net worth of at least $2.5 million.
* Post security of the greater of 105 percent of the employer's expected annual incurred cost of claims, or $100,000.
* Carry excess workers' compensation insurance.
* Present evidence that the business has administrative resources which will enable it to timely report, administer and settle all claims.
To qualify to join a self-insured association, a business must:
* Have a minimum size as specified by Nevada Revised Statutes 616B.386.
* Have at least $500,000 tangible net worth or an NCCI manual premium of at least $15,000. The commissioner may set alternate standards for established associations.
* Have a loss ratio under 115 percent, unless the employer demonstrates to the commissioner that the loss ratio is the result of an unusual circumstance.
Accurate classification of employment categories is important because the exposure to workers' compensation claim costs vary by employment classification. Placement in the correct classification will ensure that businesses receive rates that are commensurate with the particular type of exposure.
Discuss with your agent and/or underwriter any questions you have about how to classify an employee. Or or can call NCCI Customer Service at (800) NCCI-123.
NCCI can also (for a fee) provide a formal review of the applicable classifications.
Keep detailed records as to the specific work done by the employee for a particular job where classifications allow for the division of payroll, such as construction classifications.
Do not misclassify employees as independent contractors.
Insurers and the Division of Industrial Relations have the right to audit employers pursuant to state law. Whether and how often a business is audited will depend on the nature of the business, the size of the business and whether there are any suspected problems. Doing the following will help bring peace of mind to employers:
* Do not misrepresent the nature of the business.
* Do not fail to disclose material changes to operations.
* Do not underestimate payroll.
For businesses with subcontractors:
* Make sure you have subcontractor certificates on file.
* Never use uninsured subcontractors.
* Do not misclassify employees as independent contractors.
Employers that want to dispute the findings of an audit should first attempt to resolve their dispute informally with help from their agent. Employers can also discuss issues with a NCCI representative or with a Division of Insurance Consumer Services Representative. As a final resort, a request for an appeal can be filed with the Insurance Commissioner, and presented before the Appeals Panel for Industrial Insurance by way of a hearing.
Experience rating compares an employer's claim frequency and severity for a given rating classification, to industry data. The rating can result in a surcharge if the employer's experience is worse than average, or a credit if the experience is better than average.
It's important to ensure that loss experience is accurately reported and considered. Employers with questions about experience rating can contact NCCI Customer Service at (800) NCCI-123, or the Division of Insurance Consumer Services Section at (775) 687-0700.
An employee leasing arrangement with a PEO is a common way for businesses to obtain workers' compensation coverage and other services. However, it is important that employers protect themselves and verify that the PEO they are working with is properly registered with the Division of Industrial Relations. If the employee leasing arrangement includes workers' compensation coverage, employers should verify that the workers' compensation coverage is being provided by an insurer authorized by the Division of Insurance to provide such coverage.
Many different agencies are available to help businesses meet Nevada's workers' compensation requirements.
For questions about policy issues or rates, the Nevada Division of Insurance can be reached at 687-0700 or online at www.doi.nv.gov.
For questions about claims issues and coverage verification, the Nevada Division of Industrial Relations can be reached at (702) 486-9087 or online at www.dirweb.state.nv.us.
For questions about employment classifications and the assigned risk plan, the NCCI can be reached at (800) NCCI-123 or at www.NCCI.com.
SIDEBAR
Workers compensation reminders for employers
The Nevada Division of Industrial Relations provides these reminders for employers:
* Employers must provide workers' comp coverage for any non-spousal family member not listed as an officer in a corporation or partnership.
* Carefully examine workers' comp policies and avoid lapses in coverage, no matter how brief.
* A coverage-verification service is available on the Workers' Compensation website (http://dirweb.state.nv.us/WCS/wcs.htm) to check on the workers' comp status of
sub-contractors.
* "1099" status has no bearing on employee classification under Nevada laws.
* Make sure that employees are aware of how to report an injury and file a claim.
What to do:
* Do post the current D-1 poster as required.
* Do provide first aid and transportation for an injured employee, as required by law.
* Do complete and submit the C-3 Employer's Report of Industrial Injury or Occ. Disease on time. A fillable form is available online at http://dirweb.state.nv.us/FORMS/c-3.pdf.
What not to do:
* Don't try to prevent a worker from filing a claim.
* Don't discriminate against an employee who files a claim.
* Don't attempt to direct or influence medical treatment of an injured employee. (However, the employer does have a right to review the claim file, including medical treatment related to the industrial injury or occupational disease.)
Find out more at the Workers' Compensation Section Employer Information page: http://dirweb.state.nv.us/WCS/employer.htm.
You can also signup for the latest legal information and free
training at http://dirweb.state.nv.us/WCS/handouts/electronicenroll.htm.
