Hawaii workers’ compensation laws provide injured employees with medical care and financial benefits. Injuries that can be covered include cuts, strains, and repetitive use injuries like carpal tunnel syndrome. Injuries that result in death are also covered, as well as the funeral costs of family members. Most businesses in Hawaii are required to carry workers’ compensation insurance. However, eligible employers may choose to self-insure, allowing them to cover the costs themselves rather than submitting them to an insurer.
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Requirements
Hawaii requires every business to carry workers’ compensation insurance for its employees. Workers’ comp provides medical benefits for an injured employees and compensates them for any lost wages they may incur while recovering. In addition, death benefits can provide a fixed amount of money to the surviving dependents of an employee killed on the job.
Employees must notify their employer immediately if they are hurt or sick. They should also notify their doctor so that they can be examined and treated. Workers’ comp covers reasonable and necessary medical expenses, including ambulance rides, emergency room visits, x-rays, prescription drugs, and physical therapy sessions. Employers can purchase workers’ comp coverage through private insurers or the legislatively inspired Hawaii Employers Mutual Insurance Corporation (HEMIC) in the State of Hawaii. HEMIC sets rates based on occupation classification codes and offers discounts for large companies that want to buy their coverage instead of going through the assigned risk system. Buying the right policy can save businesses money in the long run, as non-compliance penalties are steep. In addition to fines from the state, a non-compliant business could be sued by an employee who was injured or became sick on the job.
Benefits
If an employee is injured, workers compensation in Hawaii insurance offers financial and medical benefits to cover medical treatment and some lost wages. Additionally, if an employee dies on the job, death benefits are provided to family members.
All Hawaii employers must provide workers’ comp insurance unless they legally opt out or are listed on exempt employment types (e.g., federal employees, some domestic workers, and real estate brokers). Small companies with few or no employees can purchase coverage through a private insurer. Larger businesses can apply to become self-insured if they meet certain payroll and other criteria.
When calculating rates, private insurers use the National Council on Insurance Compensation’s job classification system to place businesses into categories or “classes.” The classes are then rated based on their historical experience with workplace injuries and illness. This information is then overlaid with economic factors to produce a rate.
Most independent insurance agents recommend selecting higher limits than the statutory minimum of $100,000. That amount can be blown through quickly with any decent-sized injury. Plus, most insurance agents agree that the best way to ensure a company complies with state workers’ comp guidelines is to work with an experienced agent. An independent agent can help navigate the complexities of state laws, including who needs to be covered and who is exempt from coverage.
Penalties
Businesses that don’t carry workers’ comp face stiff fines and penalties from the state. But they’ll also lose out on a valuable safety resource. Workers’ compensation covers medical care for employees who are injured or sickened on the job. This includes ambulance rides, emergency room visits, x-rays and surgery. It also pays lost wages while an employee recovers.
Hawaii law requires all employers to buy workers’ comp coverage. While workers’ compensation covers most of Hawaii’s 675,000 workers, there are some exclusions. The law excludes unpaid volunteers for nonprofit and charitable organizations; students working for tuition, room, and board; licensed religious officials; stockholders who earn 25 percent or more of a company’s total stock value; domestic workers; real estate persons paid on commission; and employees of limited liability companies (LLCs), partnerships and sole proprietorships.
The National Council on Compensation Insurance tracks workers’ comp claims. This private organization gathers data and analyzes industry trends to develop objective insurance rate and loss cost recommendations. Insurers can adjust their rates based on these recommendations.
Third-Party Liability
In Hawaii, workers’ compensation is mandatory for businesses with one or more employees. The state imposes stiff fines and penalties on businesses that don’t carry insurance. Employers can purchase insurance through private insurers or apply for acceptance in the assigned risk pool manager. Larger companies with significant assets may realize savings and better control by taking out their group self-insurance policy. In addition to medical care and disability benefits, the state also offers death benefit payments to the spouse of an injured worker. Injured workers can also receive vocational rehabilitation, including career counseling, testing, and training. Employees who suffer work-related injuries or illnesses must notify their employer immediately after an injury. This will ensure that the worker can file a claim and receive the benefits they are entitled to under state law. The cost of workers’ compensation in Hawaii can vary depending on how many employees an employer has and their industry. The state partners with NCCI to determine rates based on different classification codes. This allows employers to compare quotes and choose the best options for their business. The rate per employee will depend on the type of industry and the number of high-risk classification codes.
