Requirements for Workers' Compensation Insurance
You will be required to have Workers' Compensation Insurance if you...
- Regularly employ three or more part-time employees at one time
- Or employ one or more persons for at least 35-hours per week for at least 13-weeks during the preceding 52-weeks
Workers' Compensation benefits ordinarily are not paid by the State of Michigan. Workers' Compensation is the responsibility of an employer. Benefits are paid either directly by an employer or through an insurance company on behalf of an employer.
The majority of employers in Michigan obtain Workers' Compensation through commercial insurance companies. Self-insurance is an alternative for large companies that have been granted the privilege of paying Workers' Compensation benefits from general company operating funds. Companies with $200,000 or more in an annual premium program frequently investigate the self-insurance approach as a possible coverage alternative.
The premium rates for Workers' Compensation insurance are competitively determined. Insurers use about 500 different rating classifications based on the type of business an employer operates. Since premium rates for a given classification vary widely among insurers, it pays to shop carefully. Insurers also have different merit and experience rating plans, schedule-rating plans, and premium discount tables, which can affect an employer's final premium cost.