"As of 2020 data, Georgia’s workers’ compensation index rate was $1.64. That means that if you had three employees with a total payroll of $100,000, you’d pay $1,640 around per year for workers’ compensation."
If you’re looking for workers’ compensation insurance in Georgia, you may be wondering how much you’ll pay for coverage at your business – and how your state stacks up to others when it comes to workers’ compensation costs.
We recently covered the topic of state-by-state workers’ comp costs in this breakdown of the states with the highest (and lowest) workers’ compensation rates. But how do things look in Georgia? How much will you pay, and how does it stack up against other states? Are rates going up, or down?
Find out in this blog, as we take a deep dive into how much workers’ compensation costs in The Peach State.
How Much Will I Pay For Workers’ Compensation In Georgia?
As of 2020 data, Georgia’s workers’ compensation index rate was $1.64. That means that you’ll pay, on average, $1.64 per $100 of payroll. So if you had three employees with a total payroll of $100,000, you’d pay $1,640 around per year for workers’ compensation. That can vary depending on your line of work and some other factors, of course, but a $1.64 index rate is average for the state.
Interestingly, this is a pretty big drop from 2018, when Georgia was ranked as the sixth most expensive state for workers’ comp – the index rate was $2.27 in 2018. That was a big jump from its 2016 ranking, too – in 2016, Georgia had the 27th-highest workers’ comp rates, so it was solidly in the middle compared to all the other states in the U.S.
Why Are Workers’ Compensation Rates Higher In Georgia Compared To Other States?
Georgia is in the upper third of workers’ comp rates – it’s not New York, which has an index rate of $2.23 – but workers’ comp is more expensive than in lots of other states. Are you wondering what may affect the rates in Georgia?
Here’s a breakdown of a few of the factors that affect the cost of workers’ comp premiums.
Common Industries in Georgia
The type of work that people do in a state affects the average workers’ comp cost. Georgia has a lot of jobs in higher-risk sectors like construction, manufacturing, logistics and healthcare. Because of this, average workers’ comp rates may be higher compared to other states. However, you will still pay less than average to cover workers who are at low risk of injuries, like office workers.
State Laws on Work Comp Insurance
In Georgia, all businesses need workers’ comp if they have three or more employees, including full-time, part-time, and seasonal workers. State-specific laws about who needs to buy coverage can affect workers’ comp rates. For example, Texas doesn’t require workers’ comp at all – and it has the 46th-lowest index rate in the nation, at just $0.98.
Employee Coverage Payout Policies
Different states set different limits on how much money injured workers get. In general, the more generous these policies are, the more workers’ comp will cost. Paying out more money costs more money. For example, in Georgia, the maximum weekly benefit for temporary total disability is currently capped at $675/week.
A state with lower caps would have lower workers’ comp rates, and a state with higher caps would have higher rates. New York, the most expensive state for workers’ comp, currently has a weekly benefit rate cap of $1,063.05, which is quite a bit higher than Georgia.
This, combined with the state's history of work comp litigation (i.e. when employer and employee dispute over a work comp claim), drive up rates statewide.
Regional Healthcare Costs
The actual cost of medical care can influence the cost of workers’ compensation premiums. States with higher costs of medical care will tend to have higher rates, and the opposite is true, too. And as healthcare costs grow over time, so will insurance premiums. The average cost of one day in the emergency room in Georgia in 2020 was $2,100, up from just $1,665 in 2015.
You might also like: 8 Common Questions About Georgia Workers’ Compensation, Answered
What Factors Can Affect My Workers’ Compensation Premiums In Georgia?
So, that’s a birds-eye view of the state of workers’ compensation in Georgia. But what affects the premiums that you’ll pay for coverage at your business? There are a few different factors that your insurer will take into account.
- Your line of work – Every employee is assigned a “class code” by the NCCI or a state rating bureau. Basically, these codes determine the risk of a person’s line of work. Construction workers and plumbers are far more likely to be injured on the job than accountants or lawyers.
So if you run a business like a web design agency, you’d pay a lot less for workers’ comp than someone who runs a machine shop or an automotive repair shop. The risk of injury for each worker is taken into account when determining your workers’ comp costs.
- EMR, based on past claims and safety history – Your business is assigned a number called an EMR, also known as an Experience Modifier Rating. Basically, this number compares your safety history with other businesses that are similar to yours. A number of 1 is considered to be average. That means you’ll pay close to the average rate for workers’ comp.
If you have fewer claims and less severe injuries compared to other similar businesses in your industry, your EMR will be lower than 1 – and you’ll pay less for coverage than the average business in your industry. Conversely, if you have a worse safety record and more claims, your EMR will be higher than 1 – and you’ll pay much more for the same workers’ comp coverage. That’s just another reason to put safety first at work!
- Total payroll – Your total payroll is what determines how much you’ll pay per year for workers’ comp coverage. Usually, you’ll give your insurer an estimate of how much you’ll pay your employees every year.
Then, before your policy renews, your insurer performs an audit. Based on your actual payroll, they’ll adjust your policy. If you paid more than you estimated, you’ll owe them additional money. But if your payroll was lower than you estimated, you’ll get a refund, or a credit toward your next policy’s premiums.
Need Workers’ Compensation Insurance In Georgia? Work With The Experts!
At WorkCompOne, we make it easy for small business owners in Georgia to get the workers’ comp insurance they need to operate legally, and protect their workers if accidents happen. So don’t wait. If you need coverage, get a quote using our simple online tool now. And if you’ve got more questions, feel free to contact us. One of our workers’ comp experts will give you the answers you need!