Iowa Workers’ Compensation

Iowa worker's compensation text overlaying image of des moines skyline If you run a business and have employees, you’ll need to purchase Iowa workers’ compensation insurance. In fact, this type of insurance is a requirement in most states, including Iowa, 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 Iowa, with some exceptions. 

Business owners in Iowa can expect to pay around $1.48 for every $100 of covered payroll for workers’ compensation insurance. For example, a business with a total annual payroll of $100,000 will pay around $1,480 for workers’ compensation insurance for the year. Or around $123 a month. These rates can vary, though, based on a number of factors.

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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.


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What’s Covered

If an employee sustains an injury on the job or becomes ill due to workplace conditions, workers’ compensation in Iowa will help them with their medical bills. The average weekly wage of the employee determines the workers’ compensation benefits. The amount depends on the type of claim.

In general, workers’ compensation in Iowa covers:

  • 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. 
  • Ongoing care – If your employee still has medical needs as a direct result of their accident or illness, even after they return to work, they can get benefits for ongoing care. This includes additional doctor’s appointments or additional surgeries.

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. 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:

  1. Temporary total disability (TTD) – These payments will be made if your employee is not able to work at all while recuperating.
  2. 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.
  3. 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.
  4. Permanent partial disability (PPD) – Employees who have permanent difficulties but can work with them will be eligible for PPD.

It’s important to note that weekly disability benefits in Iowa have a cap. Employees are eligible for 80% of their weekly wages up to a maximum of $1,864.


Iowa’s Workers’ Compensation Death Benefits

If an employee passes away as a result of a work illness or injury, Iowa Code requires you to provide death benefits through your workers’ compensation policy. The amount of these benefits will depend on whether the employee’s dependents claiming them were totally or partially financially reliant on the employee.

Children under the age of 18, disabled children of any age, and a surviving spouse are regarded as fully dependent. Children under 25 who can show they are dependent on the employee are also eligible. Weekly workers’ compensation benefits will also be available to other dependents who are physically or mentally unable to care for themselves.

Fully dependent survivors qualify for compensation equal to 80% of the employee’s average weekly after-tax income. The 80% sum will be distributed equally among all full dependents and will be capped at the average weekly earnings for all of Iowa. 

Partial dependents only qualify for death benefits if the employee had no full dependents. Survivors can also claim a lump sum payment for funeral costs, up to 12 times the state’s average weekly wage.


Iowa’s Workers’ Compensation Laws

While most employers in Iowa have to carry workers’ compensation insurance, there are a few exceptions. Some of these exceptions include:

  • Self-employed
  • Members of a limited liability company (LLC)
  • Partners in a partnership
  • Corporate executive officers owning at least 25% of common stock in the business.
  • Family who works for you.
  • Employees earning less than $1,500 annually.

The state’s requirements do not apply to all industries, such as agricultural businesses. 

It might still be a good idea to carry workers’ compensation insurance even if you are exempt. If you don’t have coverage, you may have to pay for an employee’s work illness or injury out-of-pocket. Injured or ill employees will also be able to file legal claims against your company.


How to Buy Workers’ Compensation Insurance

If you’re looking for workers’ compensation coverage in Iowa, you should first look into a policy from a private commercial insurance company. EZ provides a simple online application for Iowa businesses to compare quotes from top insurance carriers, as well as licensed agents with insurance expertise who can help you choose the best carrier and policy for your business.

You can also purchase insurance through the Iowa Assigned Risk Pool, which is ran by the National Council on Compensation Insurance, if private insurers are unwilling to offer it to you. EZ can help you obtain this “last resort” coverage after receiving written confirmation of two insurance company declines.

If you meet the requirements, you may be able to self-insure your workers’ compensation claims. This would mean that, rather than paying a premium and submitting medical, rehabilitation, and death claims to an insurance carrier, you would pay for them directly out-of-pocket. But, as noted, you need to qualify for this option and submit an application.

If you want to self-insure for workers’ compensation you must:

  • Provide the insurance commissioner with evidence demonstrating your company’s capacity to provide any eligible employee with the necessary benefits.
  • Keep a security in trust so that it is accessible in the event that any employee makes a benefit claim.

Additionally, you will have to periodically certify your ability to pay your workers’ compensation responsibilities.

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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 likely to get hurt, 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. Working with our agents can save you hundreds of dollars a year on coverage.


Iowa Workers’ Compensation FAQs

  • Are you required to have workers’ compensation insurance in Iowa?

Almost every business with employees in Iowa has to have workers’ compensation insurance. There are severe consequences for breaking Iowa’s workers’ compensation law. You can face the following civil penalties if you do not carry workers’ compensation insurance. Or fail to pay benefits from your self-insurance account:

    • A civil injunction
    • Loss of the right to purchase insurance and self-insurance.
    • A penalty of up to $1,000 to be paid to the Second Injury Fund of Iowa for failing to file employee injury reports as required.
    • A fine to be paid to the Second Injury Fund of Iowa because of a pattern of consistently delaying the start of weekly benefits payments within 11 days
    • A payment of up to 50% of additional benefits for delaying or refusing to provide weekly benefits to an employee
  • How do workers’ compensation settlements work in Iowa?

The two basic types of workers’ compensation settlements in Iowa are agreement settlements and compromise settlements. With an agreement settlement, the parties involved agree on the extent and amount of compensation owed in connection with the incident. Once this is done, this information is submitted to the Iowa Workers’ Compensation Commissioner. Who validates the claim’s compensability and protects the employee’s future rights.

When there is disagreement on the employee’s right to compensation, a compromise settlement is reached in court. The state’s Workers’ Compensation Commissioner receives the agreed-upon settlement amount for approval. Once both parties reach and accept the settlement, they waive all further claims for damages.

  • What is the statute of limitations in Iowa?

In Iowa, workers’ compensation claims for injuries must be made no later than two years following the incident, or three years following the final benefit payout.

For employers, the deadline for submitting a First Report of Injury form is four days after receiving news or becoming aware of an accident that results in an employee missing at least three days of work, suffering a permanent injury, or passing away.


Why Use EZ

We do everything possible 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 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.

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About The Author:
Cassandra Love

With over a decade of helpful content experience Cassandra has dedicated her career to making sure people have access to relevant, easy to understand, and valuable information. After realizing a huge knowledge gap Cassandra spent years researching and working with health insurance companies to create accessible guides and articles to walk anyone through every aspect of the insurance process.

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