Workers’ compensation insurance costs Illinois businesses an estimated $1.07 per $100 of covered payroll. That means a business with a total annual payroll of $100,000, for example, will pay approximately $1,070 for workers compensation insurance for the entire year, or around $89 a month. These rates vary significantly depending on a number of factors.
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What’s Covered
Illinois’s Workers’ Compensation Death Benefits
Illinois’s Workers’ Compensation Laws
How to Buy Workers’ Compensation Insurance
How to Get the Most Savings
FAQs
Why Use EZ
In general, though, the likelihood of an on-the-job injury at your workplace is what determines your workers’ compensation rates. Some types of employees may have lower workers’ compensation costs than those who undertake more labor-intensive tasks and are more vulnerable to injury. You can use a variety of workers’ compensation class codes when applying for coverage.
What’s Covered
If one of your employees is injured at work or becomes ill because of workplace conditions. Workers’ compensation in Illinois can help pay for their medical bills. The weekly average wage of an employee is used to calculate workers’ compensation benefits. The type of claim determines the exact amount.
The most important thing that workers’ compensation does is offer coverage for your injured employee’s medical treatment. This would include doctor’s appointments, hospital stays, and surgical procedures. Following a return to work, an employee may need ongoing care. Such as follow-up appointments or extra surgeries; workers’ compensation will also cover these medical bills.
Additionally, if the incident causes permanent or temporary disability, the employee will receive compensation in the form of weekly or lump sum payments. If your employee suffers a temporary disability, their injury is preventing them from performing their regular job while they recover. They have a permanent disability if a doctor determines that they will not fully recover from their injury.
These two classifications fall into two subcategories:
- Temporary total disability (TTD) – These payments will be made in the event that your employee is unable to work at all while recovering.
- Temporary partial disability (TPD) – TPD payments will be made if your employee is still able to work, but with certain restrictions, such as requiring lighter duties or fewer hours. Even if your company does not provide work that meets these requirements, the employee may still be eligible for these payments.
- Permanent total disability (PTD) – If your employee is unable to work due to an accident or illness, even after they have recovered as much as they are likely to, they will be eligible for PTD payments.
- Permanent partial disability (PPD) – Employees who have permanent impairments, but are able to work with those impairments will be eligible for PPD.
Illinois’ Workers’ Compensation Death Benefits
Dependents of workers who pass away as a result of workplace injuries are entitled to workers’ compensation death benefits. Illinois allows benefits to be distributed to the following dependents:
- Spouses
- Minors under 18
- Children of the deceased who are under 25 and full-time students
- Children of any age who are physically or intellectually disabled
- Other family members, such as grandparents, parents, or adult children, if the deceased worker had none of the above survivors
In Illinois, payments for workers’ compensation death benefits are made on a weekly basis. A qualified dependent can receive up to two-thirds of the deceased’s average weekly earnings. As long as the amount is within the minimum and maximum limits set by the state each year. Benefit payments will be discontinued after 25 years, or once payments reach $500,000, whichever comes first.
Funeral costs up to $8,000 are also covered by workers’ compensation death benefits.
Illinois’s Workers’ Compensation Laws
In Illinois, employers typically have to carry workers’ compensation insurance. Since the passage of the Illinois Workers’ Compensation Act, more than 91% of the state’s workers have workers’ comp coverage through their employer.
Make sure you are familiar with the Illinois Workers’ Compensation Act, so you know you are in compliance with Illinois’ workers’ compensation regulations. Some important regulations to keep in mind include:
- Even if your employees are members of your family, you generally need coverage.
- If you intentionally and deliberately fail to obtain coverage, you could be subject to a minimum $10,000 in penalties.
- Employees have 45 days to inform their employers of an illness or injury.
- Every six months, the Illinois Department of Employment Security updates its average weekly wage report.
In Illinois, the waiting period for receiving workers’ compensation benefits is three business days. This means that if they are still hurt or ill on the fourth day after an accident or illness, they will receive benefits. Your employee qualifies for reimbursement for the workdays during the initial waiting period if they miss two calendar weeks of work. They receive this benefit until they recover.
Certain categories of workers are exempt from state requirements and do not require workers’ comp coverage, including:
- Self-employed
- Corporate executives
- Business partners
- Members of an LLC
You must submit a Workers’ Compensation Coverage Opt-Out Form to the state Division of Workers’ Compensation if you are exempt. Be aware that you still have to cover your staff with insurance.
How to Buy Workers’ Compensation Insurance
In Illinois, businesses have a choice between buying workers’ compensation insurance from a private carrier. Or requesting state approval to self-insure. Self-insuring means that, instead of paying a premium and submitting claims to an insurance company. You agree to pay any workers’ comp claims out-of-pocket as they arise. Your business will have to meet certain requirements to do this.
According to the state website for Illinois, 90% of businesses opt to purchase insurance instead of self-insuring. This is because regulations surrounding self-insurance mandate that businesses have the financial resources to handle all workers’ compensation claims on their own without making a claim to an insurer. For smaller organizations, this requirement will most likely be prohibitive.
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How to Get the Most Savings
Even though factors out of your control account for the majority of workers’ compensation costs. There are still ways to save. A safety program is an excellent way to avoid workplace injuries and claims. It is important to have safety procedures in place, no matter your industry. Employees who have safety training are less likely to be injured. Resulting in lower workers’ compensation costs for your business.
It is also a good idea to regularly review your claims history. Analyzing your claim history can help you identify and correct patterns. Certain aspects of your operating procedures may be a source of claims. You can save money by keeping a close eye on potentially hazardous operations.
Properly classifying your employees is one of the most effective ways to save money. When you apply for workers’ comp insurance, you will classify each employee by their function, such as desk worker or laborer. These classifications impact the cost of workers’ compensation, so make sure your employees are classified correctly. Not only that, but if you fail to properly classify your employees, you could face fines.
Small business owners may be able to purchase pay-as-you-go workers’ compensation in some cases. This type of workers’ compensation policy has a low upfront premium. And allows you to make payments based on actual payroll rather than estimations. This type of policy can be useful for businesses that hire seasonal workers or have a fluctuating workforce.
Last but not least, working with a licensed EZ agent can help you save hundreds of dollars per year. We specialize in insurance for small businesses of all sizes and can find the right policy for your business and your budget. Begin a free online application today to begin comparing workers’ compensation insurance quotes for your small business from leading U.S. carriers.
Illinois Workers’ Compensation FAQs
Are you required to have workers’ compensation insurance in Illinois?
You must carry workers’ compensation insurance in Illinois if you have at least one part-time or full-time employee. Violations of workers’ compensation regulations carry severe penalties. The Illinois Workers’ Compensation Act establishes the following penalties:
- If you don’t have workers’ compensation insurance, you can be penalized a minimum of $10,000, plus $500 for every day that you fail to comply.
- Willfully and knowingly failing to carry coverage is a Class 4 felony.
- In Illinois, a felony conviction for not having workers’ compensation insurance carries a sentence of one to three years in jail and a fine of up to $25,000.
How do workers’ compensation settlements work in Illinois?
The majority of agreements for workers’ compensation involve a single lump-sum payout. Illinois allows for two types of workers’ comp settlement payments that are not given as lump sums, but as recurring payments:
- Wage disparity claims – If your employee has returned to work at a lower salary than before their injury, they can receive settlement funds equivalent to their former salary.
- Permanent and total disability claims – If your employee is unable to work again after their injury, they can get a recurring payment.
Although a settlement typically means that the employee’s rights to workers’ compensation payments are closed, medical reimbursement rights may occasionally be preserved if the individual is anticipated to need substantially more medical care in the future as a result of the accident.
What is the statute of limitations in Illinois?
The statute of limitations for workers’ compensation in Illinois includes the following rules:
- For the employee to be eligible for workers’ compensation benefits, the employer must receive notice of the injury from the employee within 45 days of the accident or diagnosis.
- The Illinois Workers’ Compensation Commission must receive the claim for workers’ compensation benefits within two years of the employer’s last payment of benefits or three years following the date of the injury.
The date of injury is regarded as the date on which a reasonable person would have discovered the injury and knew that the injury was caused by their job, if the injury resulted from continuing or recurring trauma rather than a single incident.
Why Use EZ
We do everything in our power to make shopping for workers’ compensation insurance as easy and stress-free as possible. And we give each of our customers our undivided attention. As soon as you fill out our form, you will receive instant, free quotes from your dedicated agent, who will give you personalized service and will work to understand your needs. We want to ensure that you make the best decision possible, and that you get the best coverage at the best price. Our services are completely free so check your local quotes today!
If you still have questions, feel free to give us a call at 877-670-3538. You will connect to a local insurance agent who can answer all of your questions, and help you find the workers’ compensation policy that works best for your business.
