Virginia currently requires most businesses to have workers’ compensation insurance. But what about your business? Is it exempt or are you required to provide workers’ comp insurance for your employees?
And for those businesses that are exempt, is it a good idea to purchase workers’ comp insurance, even if you don’t have to?
In this employer’s guide, we’ll take a look at Virginia’s workers’ comp requirements, provide details on what a workers’ compensation policy covers, and explain why it’s so important for your business and your employees to have the proper coverage in place.
Why is workers’ compensation insurance important?
In Virginia, workers’ compensation provides no-fault insurance coverage for your employees in the event they are injured on the job, regardless of how the injury occurred.
Because of its no-fault provision, having workers compensation insurance prevents employers from being sued, even if the employer is partially responsible for the injury. On the other hand, workers’ compensation also provides a significant benefit to your employees, paying their medical expenses and wages and income should they be injured on the job.
Which businesses in Virginia are required to have workers’ compensation insurance?
Any Virginia employer who employs two (2) or more employees, whether full-time or part-time, is required by law to carry workers’ compensation insurance. Under Virginia law, the following are considered employees:
- Corporate officers
- LLC managers
- Family members that work in the business
- Undocumented workers
- Temporary workers
- Seasonal workers
- Part-time workers
- Minors
- Church, charity, and non-profit workers
- Subcontractors that are hired to assist in the business or to fulfill a contract
For businesses that regularly hire subcontractors, it’s important to include those subcontractors in the employee count.
Are there any exemptions?
Sole proprietors with no employees are the only exemption under Virginia law, but the state does not provide a waiver or exemption form for sole proprietors, who are free to voluntarily obtain workers’ compensation insurance if they choose.
There are exceptions to the sole proprietor rule. For example, if a sole proprietor hires a subcontractor, the subcontractor and any of its employees should be included in the employee count, and therefore would require workers’ compensation insurance. At this time, Virginia does not provide a waiver or exemption form to sole proprietors.
What specifically does Virginia’s workers’ compensation insurance cover?
Though both employers and their employees hope that no serious incidents ever occur, Virginia workers’ compensation coverage typically includes the following:
Medical expenses
All medical expenses related to any workplace-related injury or illness are covered, and this typically includes doctor visits, prescription costs, and transportation costs.
Wage loss replacement
Employees who have a medically authorized illness or injury are provided with wage replacement. Workers are eligible for wage loss replacement after missing seven days of work.
Vocational rehabilitation
Vocational rehabilitation services include evaluation, counseling, job coaching, job development, job training, education, and retraining.
Permanent partial disability
Any employee that has total or partial loss of the use of a body part, amputation, disfigurement, loss of hearing or vision, or certain diseases of the lung can qualify for permanent partial disability.
Permanent total disability
Permanent total disability offers lifetime wage replacement to any employee that is unable to return to work due to the loss of use of both hands, arms, feet, legs, eyes, or if paralyzed or has suffered a severe brain injury.
Death benefits
The employee’s spouse, kids, or other approved dependents may be eligible for funeral costs and benefits for wage loss replacement in the event that the injury results in death.
Moving on, let’s better understand how an employer may go about buying coverage for their company.
How can businesses purchase workers’ compensation insurance?
Virginia employers have four different options when it comes purchasing to workers’ compensation:
- By obtaining commercial coverage through a licensed insurance carrier
- By applying to become self-insured
- By signing up for group self-insurance
- Through a registered (in Virginia) professional employer organization or PEO
Virginia businesses considered high-risk can purchase workers’ compensation insurance through the Virginia Assigned Risk Pool.
A business interested in becoming self-insured should first read the Self-Insurance Quick Reference Guide to see if their business is eligible. If your business meets the eligibility requirements, you’ll need to complete Form 20 – Application for Individual Self-Insurance.
Once workers’ compensation coverage is purchased, the employer is required to post a Workers’ Compensation Notice (VWC Form 1) in the workplace.
Now that we better understand how to obtain coverage, let’s briefly touch on what can happen if a plan is not put in place.
How can businesses purchase workers’ compensation insurance?
Virginia employers have four different options when it comes purchasing to workers’ compensation:
- By obtaining commercial coverage through a licensed insurance carrier
- By applying to become self-insured
- By signing up for group self-insurance
- Through a registered (in Virginia) professional employer organization or PEO
Virginia businesses considered high-risk can purchase workers’ compensation insurance through the Virginia Assigned Risk Pool.
A business interested in becoming self-insured should first read the Self-Insurance Quick Reference Guide to see if their business is eligible. If your business meets the eligibility requirements, you’ll need to complete Form 20 – Application for Individual Self-Insurance.
Once workers’ compensation coverage is purchased, the employer is required to post a Workers’ Compensation Notice (VWC Form 1) in the workplace.
Now that we better understand how to obtain coverage, let’s briefly touch on what can happen if a plan is not put in place.
What are the penalties for not having workers’ comp insurance?
If a company does not get coverage, there may be some “less-than-ideal” outcomes.
- Any employer required by Virginia law to have workers’ compensation insurance that is found to not have coverage will be assessed a civil penalty of up to $250 each day the business remains uninsured, with a maximum penalty of $50,000.
- In addition, if an employee is injured while the business does not have workers’ compensation insurance, the business is liable to the employee for all resulting medical costs.
- Continued failure to insure the business can result in the cessation of business operations and potential time in prison.
How are accidents or injuries reported?
Employees should report any workplace related injuries as soon as possible, but no later than 30 days from the date of the injury, or 60 days if relating to workplace illness. Once notified, employers are required to file a First Report of Injury form within 10 days of the reported accident or injury.
In Virginia, the employee, not the employer, is responsible for filing a claim form with the Virginia Workers Compensation Commission. Employees are required to file a claim form within the first two years after an injury or illness is reported, though there are exceptions to this rule that will need to be addressed with the Virginia Workers’ Compensation Commission.
Can employees be treated by their own physician?
Employees can go to the nearest emergency room for treatment, but employers will need to provide employees with a list of at least three medical providers where the employee can go to receive treatment.
More Virginia resources for employers
For more information about Virginia workers’ compensation regulations, you can contact the Virginia Workers’ Compensation Commission at 1-877-664-2566. General questions can be sent to Questions@workcomp.virginia.gov.
The following resources can also help answer any questions you may have regarding Virginia workers’ comp rules.
Why workers’ compensation insurance is important for Virginia employers
In Virginia, having a workers’ compensation policy in place protects both employers and employees. Investing in workers’ compensation insurance can protect employers from costly employee lawsuits resulting from workplace injuries and illnesses. For employees, workers’ compensation insurance means that medical and rehabilitation expenses will be covered should an accident occur while on the job. If you have questions about workers’ compensation or are interested in obtaining a policy, our team is here to help.
Please note all material in this article is for educational purposes only and does not constitute tax, benefits or legal advice. You should always contact a qualified tax, legal or financial professional, in your area for comprehensive tax or legal advice.
