Pennsylvania employers with at least one employee, full or part-time, are required to have workers’ compensation insurance. Unlike some states, family members are included as employees.

Running a business comes with numerous responsibilities, and if you're an employer in Pennsylvania, one of those key responsibilities is ensuring you have workers' compensation insurance. This coverage is not only a legal requirement but also a crucial aspect of protecting both your employees and your business. Here's what you need to know to stay compliant and safeguard your operations.

Workers’ Compensation Requirements in Pennsylvania

In Pennsylvania, any employer with at least one employee, whether full-time or part-time, is required by law to carry workers' compensation insurance. Unlike some states, this requirement extends to family members working within the business.

The consequences of not providing workers' compensation insurance are severe. If you fail to show proof of insurance, you could face:

• Fines: $2,500 for each day of violation.
• Prison Time: Up to one year for non-compliance.
• Felony Charges: For intentional violations, fines can soar to $15,000 per day, along with potential imprisonment for up to seven years.

Given these steep penalties, it’s imperative to maintain the necessary coverage at all times.

Obtaining Workers' Compensation Insurance

In Pennsylvania, there are three primary ways to secure workers' compensation insurance:

• Private Sector Insurance: You can purchase a policy from one of the 325 private sector insurance companies operating in the state. This is the most common route for small and medium-sized businesses.
• Self-Insurance: Larger companies might consider seeking self-insurance status through the Department of Labor & Industry’s Self-Insurance Division. This option requires substantial financial stability and a commitment to meeting ongoing regulatory requirements.
• State Workers' Insurance Fund (SWIF): This is an alternative for employers who might struggle to find coverage in the private market. SWIF provides a safety net, ensuring all employers have access to the necessary insurance.

Recent Changes and Trends

Staying informed about the latest developments in workers' compensation laws is crucial. Here are some notable updates and trends in Pennsylvania:

• Cost Reduction Efforts: In April 2019, Pennsylvania approved a nearly 13% reduction in loss-costs, a key factor in calculating workers' compensation rates. This change is expected to lower insurance costs for many businesses across the state.
• Inter-State Cooperation: Pennsylvania has entered into a reciprocal agreement with New Jersey and Delaware for information sharing and enforcement. This partnership aims to enhance regulatory compliance and reduce costs through coordinated efforts.
• Opioid Regulation: The use of opioids in pain management for workers' compensation cases is under scrutiny. A notable court ruling denied the ongoing use of opioids for an injured worker after a utilization review doctor deemed it unreasonable and unnecessary. This decision reflects a broader trend towards reevaluating opioid prescriptions in the context of workers' compensation.

Navigating the Costs

According to a 2018 report by the Oregon Department of Consumer and Business Services, Pennsylvania employers paid an average of $1.85 per $100 in payroll for workers' compensation insurance. This rate was the 17th highest in the country, posing a significant financial challenge for startups and small businesses. However, the state’s efforts to lower rates and streamline regulations are steps in the right direction.

Ensuring you have the right workers' compensation insurance is not just about legal compliance; it’s about protecting your business and your employees. With the various options available in Pennsylvania and the recent efforts to reduce costs and enhance regulations, you can find a solution that fits your business needs. Stay informed about the latest changes, evaluate your options carefully, and make sure your business is always covered.

For more information or to get a free quote, consider reaching out to a trusted insurance advisor who can guide you through the process and help you secure the best possible coverage for your business. By taking these steps, you can focus on what you do best—running your business—while ensuring your employees are well-protected.

Want More Information?

For more information, check out these related articles:

• The Small Business Owner's Guide to Workers' Compensation Insurance
• Pennsylvania Workers’ Compensation Insurance
• Workers' Compensation Insurance Cost Calculator: How Much for a Small Business Policy?
• What Are the Workers’ Compensation Laws in My State?

Need Workers’ Compensation Insurance? 

WorkCompOne’s proprietary online platform makes it possible for leading national insurance carriers to serve businesses of all sizes ⁠— even those with fewer than ten employees. 

Affordable workers’ compensation insurance is just a few clicks away.