Montana workers’ compensation insurance mandate: Employer’s guide to stay compliant

How can workers’ compensation coverage protect employers and employees?

Having the proper workers’ compensation in place can protect both employers and employees. For employees, workers’ compensation pays for any medical treatment necessary to treat an on-the-job injury. But workers’ compensation also protects employers from costly litigation, state-assessed penalties, and other consequences that can occur as a result of non-compliance.

Now that we know more about why workers’ compensation can make a difference, let’s find out which employers need to have a policy in Montana.

What Montana employers are required to have workers’ compensation insurance?

According to Montana statute, all Montana businesses with employees are required to have workers’ compensation insurance. This requirement includes full-time, part-time, seasonal, or occasional employees

Are there any exceptions?

Montana Code Annotated 2023 provides a list of exemptions from workers’ compensation. Exceptions include:

• Household or domestic workers
• Casual employment
• Employment of a dependent member of an employer’s family
• Real estate, securities, or insurance salespeople paid by commission
• Railroad employees involved in interstate commerce, except railroad construction, which is covered by Montana workers’ compensation rules
• Officials at amateur athletic events
• Freelance correspondents
• Newspaper carriers
• Cosmetologist and barber services when working independently
• Independent contractors
• Sole proprietors
• Working members of a limited liability company
• Working members of a partnership
• Ministers of a church or member of a religious order
• Volunteers
• Truck drivers
• Intrastate or interstate contract motor carriers working for a freight broker.

There are many more exemptions that can be found on the exemption list.

Moving on, let’s find out more about the benefits that insurance provides employees in the event that they need to take advantage of it.

What does Montana workers’ compensation cover?

Montana workers’ compensation insurance provides a variety of medical and wage supplement benefits to workers.

Medical care

Once a claim has been accepted, an injured worker is entitled to receive all reasonable medical care, including doctor visits, hospitalization, and prescription drugs. Medical benefits terminate 60 months from the date of the injury or when the illness was diagnosed. In addition to medical benefits, an injured employee will also pay travel expenses if treatment outside the area is required.

Wage loss benefits

If an employee is unable to return to work because of an injury or illness, they may be eligible for wage loss benefits. Wage benefits are not paid for the first four days after the injury or illness begins. However, if the employee remains unable to return to work after 21 days, the first four days wages will be paid retroactively. This benefit is available for employees that are eligible for both Temporary Total Disability (TTD) and Temporary Partial Disability (TPD), though benefits are slightly different for each.

Permanent partial disability (PPD)

If a medical provider determines that an employee has reached Maximum Medical Improvement (MMI) and still remains partially disabled, the worker may be eligible for PPD benefits. Benefits levels are similar to those for TTD and TPD.

Permanent total disability (PTD)

If a medical provider determines that an employee is unable to return to regular employment, the employee may be eligible for PTD benefits. Both PPD and PTD benefits continue until the employee is eligible to receive Social Security benefits and may be adjusted if the injured employee also receives Social Security benefits.

Rehabilitation benefits

Employees with a permanent medical impairment who cannot return to their previous job may be eligible for rehabilitation benefits. These benefits include physical and occupational therapy as well as chiropractic care.

Death benefits

Beneficiaries of an employee who dies as a result of an injury or occupational illness are eligible to receive death benefits including weekly compensation, with compensation paid for 500 weeks subsequent to the date of death. Death benefits also include burial and related funeral expenses up to $10,000.

How can Montana employers purchase workers’ compensation insurance?

Any employer in the state of Montana can purchase workers’ compensation insurance from any insurer authorized in the state to sell workers’ compensation policies. A list of authorized agents is available on the Montana State Fund website. Employers can also choose to forego an agent and purchase insurance directly from the fund.

Employers also have the option to self-insure, which is usually reserved for large companies with extensive financial resources. Interested employers can complete the self-insurance application, with approval given to companies able to demonstrate that they are financially capable of self-funding.

What are the penalties for not having workers’ compensation coverage?

Any Montana employer failing to provide workers’ compensation coverage to their employees may be fined double the amount of any premium that is owed, with the minimum such penalty  $200. In addition, employers without insurance will be required to repay the Uninsured Employer’s Fund for any money paid on behalf of an injured employee while insurance was not in force.

What happens when an employee is injured on the job?

It’s the employee’s responsibility to notify their employer when an on-the-job injury occurs, regardless of whether medical treatment was sought. If an employee does receive any form of medical treatment, they must notify their employer within 30 days after the injury occurs. The notice must include the time and place that the injury occured as well as the nature of the injury. A 30 day notice is not required for any occupational illness that an employee is diagnosed with.

After the injury is reported, an employee is required to submit the First Report of Injury (FROI) form to their employer or directly to the Montana Department of Labor & Industry. If the FROI is submitted to the employer, it’s the employer’s responsibility to file the report with the insurer. Once the FROI is submitted, the insurer has 30 days to approve or deny the claim.

If an employee is injured on the job and the employer does not have workers’ compensation insurance, the employee will need to contact the Uninsured Employer’s Fund for assistance.

Can an injured employee use their own doctor for treatment?

An employee injured on the job has the right to choose their own physician for any initial treatment. However, the employer reserves the right to designate an alternate treating physician. An injured employee can also seek authorization from their employer to have their chosen provider continue treatment.

Other resources for Montana employers

• Montana workers’ compensation benefits brochure
• Workers’ compensation FAQs
• Workers’ compensation forms 
• Covered employers and exemptions
• Penalties for non-compliance