If you run a business and have employees, you’ll need to purchase New Mexico workers’ compensation insurance. In fact, this type of insurance is a requirement in most states, including New Mexico, with some exceptions. It helps pay your employees’ medical bills if they sustain an injury on the job. And limits your liability for workplace accidents, is a requirement in most states, including New Mexico, with some exceptions.
In New Mexico, business owners can expect to pay around $1.40 for every $100 of covered payroll. That means, for example, if your company’s total annual payroll is $100,000, workers’ compensation insurance would cost you $1,400 per year, or around $116 a month. These rates can change, though, based on a variety of factors.
One of the biggest factors in determining your rates for workers’ compensation insurance is your employees’ risk, or the likelihood of a workplace injury occurring at your business. So, to assist insurers in determining risk exposure, and to get the best rates for your business, you can use a variety of workers’ compensation class codes. This is important because it costs more to insure certain employees. For example, office employees may have lower workers’ compensation costs than those who work outside of your office and face more risks.
If your employee suffers a work-related injury or illness, workers’ compensation in New Mexico can assist them. While the goal is for your employee to get treatment and return to work, if the injury or illness is severe enough, they may need retraining or additional benefit payments, and wokers’ comp will cover those.
Workers’ compensation benefits depend on an employee’s weekly average wage. The exact amount they will recieve varies according to the type of claim.
In general, workers’ comp in New Mexico will cover the following for your employees:
- Accidents and injuries – If your employee needs medical attention, workers’ compensation will cover any medical expenses from a workplace injury.
- Illness – If an employee becomes sick from exposure to allergens or other hazardous materials at work, they can also receive workers’ comp benefits to help pay for treatment.
- Repetitive injury – It’s not just accidents that are covered: treatment for repetitive injuries, like carpal tunnel syndrome, are also covered by workers’ compensation.
In addition, if their accident or illness results in permanent or temporary disability, your employee will receive weekly or lump sum payments. If they have a temporary disability, their injury prevents your employee from performing their job. But they can return to work as normal once they recover. However, if a doctor diagnoses them with an injury from which they will not fully recover, they have a permanent disability.
These categories fall into the following classifications:
- Temporary total disability (TTD) – These payments will be made if your employee is not able to work at all while recuperating.
- Temporary partial disability (TPD) – TPD payments will be made if your employee can still work, but only with certain limitations, such as needing to perform lighter duties or work fewer hours. If your company does not provide work that meets these requirements, the employee may still be eligible for these payments.
- Permanent total disability (PTD) – Employees who are unable to work due to an accident or illness, even after they have recovered as much as they are likely to, will be eligible for PTD payments.
- Permanent partial disability (PPD) – Employees who have permanent difficulties but can work with them will be eligible for PPD.
New Mexico’s Workers’ Compensation Death Benefits
If an employee passes away as a result of a work illness or accident, workers’ compensation death benefits may be given to their surviving spouse and dependent children (or other dependent relatives). Children are dependents until they turn 18 or, if they are full-time students, until they turn 23. A dependent child who is physically or mentally disabled may receive additional benefits.
In order for their dependents to be eligible for death benefits, your employee must have passed away within 2 years of the date of injury. The maximum death benefit they can receive is equal to the amount that the employee would have received over 700 weeks of temporary total disability benefits. Additionally, workers’ compensation death benefits in New Mexico also include $7,500 for funeral costs.
New Mexico’s Workers’ Compensation Laws
Employers in New Mexico are subject to stringent workers’ compensation insurance requirements. The law requires workers’ compensation coverage for all businesses with three or more employees, and construction businesses of any size.
Every individual who performs work for a business entity is an employee by the state. If you own a business and work in it, you are also an employee, and so count towards the “three or more” guidelines.
Part-time workers, seasonal workers, and out-of-state workers are all included in the coverage requirement, as well.
There are, however, a few exceptions to these requirements:
- Household employees
- Real estate brokers
- Employees of the federal government who are covered by the Federal Employees Compensation Act or other federal programs
- Contractors who work on their own
The state of New Mexico encourages you to purchase insurance voluntarily, even if it is not required. This will protect your business from lawsuits, and cover you in the case that you need to pay any medical bills.
If you are an employer that is in an exempt category, and you want to purchase coverage voluntarily, you must first file an Election to be Subject form with the Workers’ Compensation Association (WCA).
How to Buy Workers’ Compensation Insurance
If you’re looking for workers’ compensation insurance in New Mexico, you should first look into policies offered by private insurance companies. EZ’s agents can help you compare insurers and policies to find the best coverage for you.
If your company’s high-risk status makes it impossible to obtain workers’ compensation insurance through a private insurer, you can get coverage from the New Mexico assigned risk pool. Many new small businesses purchase coverage from the assigned risk pool until they have enough of a track record to apply for commercial insurance. It’s important to note, though, that assigned risk workers’ compensation insurance costs more than voluntary-market insurance.
The National Council on Compensation Insurance (NCCI) manages New Mexico’s assigned risk insurance pool, acting as the state’s last-resort workers’ compensation provider, so speak to them if you are having trouble obtaining workers’ comp.
You also have the option to self-insure, if you meet certain criteria and submit an application. This means you will pay for any workers’ compensation claims out-of-pocket as they arise, instead of paying a premium and submitting claims to an insurance company. To qualify, you have to prove you can afford to pay for any potential claims out-of-pocket.
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How to Get the Most Savings
The majority of the cost of workers’ compensation comes from factors beyond your control. However, there are still ways to save. Implementing a safety program is a great way to reduce workplace injuries and claims, which will lower your premiums. So regardless of your industry, it is important to have safety and standard operating procedures in place. Employees who have safety training are less vulnerable to injuries, lowering your workers’ compensation costs.
It is also a good idea to regularly review your claims history. Evaluating your claims history on a regular basis can help you identify and correct patterns. You might discover that certain aspects of your business operations are frequently causing claims. This allows you to adjust the operation to make it safer. You can save money by keeping an eye on potentially dangerous operations.
Correctly classifying your employees is one of the most effective ways to save money. When you apply for your workers’ compensation policy, you will classify each of your employees depending on their job’s risk. And this risk classification influences the cost of your workers’ compensation. For example, you might pay less to insure an office worker than you would a manual laborer. It’s also important to correctly classify your employees because you may receive a fine if you fail to do so.
Begin a free online application today to compare workers’ compensation insurance quotes for your small business from leading U.S. insurers. EZ’s agents specialize in insurance for a wide range of small businesses. Additionally, working with our agents can save you hundreds of dollars a year on coverage.
New Mexico Workers’ Compensation FAQs
Are you required to have workers’ compensation insurance in New Mexico?
The law requires almost all employers in the state to have workers’ comp insurance. If you do not comply with the state’s workers’ compensation requirements, you could be hit with large fines for every day that you do not have coverage. And your business could be shut down until you pay the fines and get a suitable policy.
How do workers’ compensation settlements work in New Mexico?
Many workers’ compensation claims in New Mexico result in settlements. This means that all parties involved- you, your injured employee, and the insurer – must agree on a lump-sum payment in exchange for the employee (or the employee’s survivors) agreeing to waive their rights to future payments.
Employees who want to accept a lump sum payment in lieu of future benefits, including the right to compensation for future medical treatment, must file a Petition for Lump Sum Payment. However, the state only grants this petition in a few limited circumstances. All settlements must be approved by the New Mexico Workers’ Compensation Administration.
What is the statute of limitations in New Mexico?
In New Mexico, your employees have one year from the date of the injury or the onset of illness to file a claim.
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 get the best coverage at the best price. Our services are also completely free so check out your quotes today!
If you still have questions, feel free to give us a call at 877-670-3538. You will speak 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.