FS#7: Workers’ Compensation and Disability Benefits Insurance

Workers’ Compensation and Disability Benefits Insurance

When you employ workers in your day care program you take on a wide range of responsibilities. In New York, if you have even one employee in your home-based child care program you must have workers’ compensation and disability coverage.

1. Workers’ Compensation provides money, medical care coverage, or both benefits to your employee who suffers an injury or illness on the job.

2. Disability Benefits Insurance provides temporary cash benefits to your employee who becomes disabled due to injury or illness outside of work, including a disability related to pregnancy. These benefits are not the same as federal Social Security disability benefits.

How do I get workers’ compensation and disability benefits insurance?

You are responsible for buying insurance coverage from either:

• A private insurance carrier authorized by New York State to provide workers’ compensation insurance and/or disability benefits insurance

or

• The New York State Insurance Fund (NYSIF), which is New York State’s public insurance carrier.

The main difference between insurance carriers is how much they charge, called a premium. Most insurance carriers offer price quotes over the phone or the Internet.

Workers’ compensation premium amounts vary depending on the number of employees, type of business, location, history of claims, and other factors, so it’s a good idea to shop around.

Disability Benefits premiums also vary, but will usually be between $100 and $200 per year for a small business like home-based day care. See Child Care Employer Responsibilities Fact Sheet #1, “Employer Responsibilities: The “Bottom Line” for Home-Based Day Care Providers” for more information on estimated premiums.

For more information on workers’ compensation and disability coverage, contact NYSIF as follows:

• Phone: 888-875-5790 or 212-587-7390
• Mail: 199 Church Street, New York, NY 10007
• Internet: http://ww3.nysif.com/ Home/EyebrowPages/ContactUs.aspx

TIP: If you use a payroll service to figure tax withholding and make tax payments, ask the payroll company if it can refer you to authorized workers’ compensation and disability benefits insurance carriers. See Child Care Employer Responsibilities Fact Sheet #4, “Payroll Taxes: FICA, Income, and Unemployment Taxes,” for more information on tax withholding and payment requirements.

Is my substitute covered by workers’ compensation and disability benefits insurance?

In general, your day care substitute is considered an independent contractor, and therefore would not be covered by workers’ compensation and disability. A substitute should only work for your program when you or your assistant cannot provide care during short-term, non-recurring absences. If your substitute’s role and hours are similar to the role and hours expected from an assistant, she is not a substitute but a regular employee, such as an alternate assistant.

What happens if an employee is injured or gets sick?

When your employee informs you that she or he is ill or injured, you and your employee will need to file reporting and claim forms. Once the claim is approved, benefits will be paid to the employee by the insurance carrier. If your employees receive workers’ comp. benefits, your premiums may go up in the future.

The New York State Workers’ Compensation Board (WCB) oversees claims for both workers’ compensation and disability benefits. For more information, you can contact the WCB as follows:

• General information: call 866-632-4996, or visit www.wcb.state.ny.us/
• Workers’ comp. information: 800-877-1373
• Disability information: 800-353-3092

What happens if I do not have workers’ compensation or disability benefits coverage?

You are required by law to carry both types of coverage as soon as you have an employee. Failure to do so is a misdemeanor punishable by fines of at least $1,000 for workers’ compensation and $100 for disability. You can even be required to shut down your business or be imprisoned!

If you attempt to avoid obtaining workers’ compensation coverage, you can be fined as much as $2,000 for every ten days of non-compliance with workers’ compensation requirements.

If you fail to carry workers’ compensation and disability coverage and one of your employees is injured or becomes ill, you will be responsible for payment of all benefits awarded to your worker and substantial additional fines.

This article was posted March 10, 2010