Uninsured Employer
Encyclopedia
The Uninsured Employer is a term to identify an employer of workers under circumstances where there is no form of insurance in place to provide certain benefits to those workers. More specifically, it is a term used in workers’ compensation
law to identify an employer who does not have some form of worker’s compensation insurance
or self-insurance coverage in effect at the time of, or during the time of, a claimed injury
.
All States require that employers provide injury benefits coverage to their employees. These benefits are called Workers’ Compensation Insurance Coverage. This kind of coverage is to be distinguished from liability
coverage, which covers the premises and the owner/occupier of the space from claims made by non-employees for injuries on the premises. It is also to be distinguished from health insurance
, which covers only medical bills for non-work incurred conditions.
Protection can be accomplished through a traditional insurance policy for workers’ compensation coverage. Coverage can also be accomplished by way of compliance with various State self-insurance laws (usually reserved for larger employers) requiring substantial bonding and self-funding. For example, public agencies are usually permissibly self-insured.
When the employer has no specific insurance, or arrangement for the provision of workers’ compensation benefits to injured employees, the employer is then referred to as an uninsured employer.
The New York State Workers' Compensation Board's Bureau of Compliance oversees uninsured claims. The Uninsured Employers Fund (UEF) is the funding mechanism for compensation and medical payments to injured employees whose employer was not properly insured at the time of the accident.
with the law.
Workers' compensation
Workers' compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue his or her employer for the tort of negligence...
law to identify an employer who does not have some form of worker’s compensation insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
or self-insurance coverage in effect at the time of, or during the time of, a claimed injury
Injury
-By cause:*Traumatic injury, a body wound or shock produced by sudden physical injury, as from violence or accident*Other injuries from external physical causes, such as radiation injury, burn injury or frostbite*Injury from infection...
.
All States require that employers provide injury benefits coverage to their employees. These benefits are called Workers’ Compensation Insurance Coverage. This kind of coverage is to be distinguished from liability
Liability
A liability can mean something that is a hindrance or puts an individual or group at a disadvantage, or something that someone is responsible for, or something that increases the chance of something occurring ....
coverage, which covers the premises and the owner/occupier of the space from claims made by non-employees for injuries on the premises. It is also to be distinguished from health insurance
Health insurance
Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care expenses among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is...
, which covers only medical bills for non-work incurred conditions.
Protection can be accomplished through a traditional insurance policy for workers’ compensation coverage. Coverage can also be accomplished by way of compliance with various State self-insurance laws (usually reserved for larger employers) requiring substantial bonding and self-funding. For example, public agencies are usually permissibly self-insured.
When the employer has no specific insurance, or arrangement for the provision of workers’ compensation benefits to injured employees, the employer is then referred to as an uninsured employer.
Criminal Law as per State
This status is highly negative one in most States and often deemed a crime under State law. When there are no funds available to cover the benefits, and resulting bills for such benefits, the State usually steps in and provides the funding; hence the State’s interest in making the failure to have coverage both legally and financially painful. Most often this involves complete repayment to the State, fines, penalties, business closure, and the loss of legal defenses. The seriousness of the status by the uninsured employer is often underestimated due to unfamiliarity with the system and the belief that, like automobile uninsured motorist law, a quick settlement can be made by the uninsured for a modest amount to end the process. This is contrary to State law and recent studies in California have shown that for 2009 average claim cost is upwards of $60,000 and continually rising.State based Uninsured Employers Fund
Most often States set aside fund to pay claims to injured workers under certain circumstances. Below are some examples:California Uninsured Employers Fund
Two special funds pay claims to injured workers under certain circumstances.- Claims are paid from the Uninsured Employers Benefits Trust Fund (UEBTF) when illegally uninsured employers fail to pay workers' compensation benefits awarded to their injured employees by the Workers' Compensation Appeals Board.
- The Subsequent Injuries Benefits Trust Fund (SIBTF) is a source of additional compensation to injured workers who already had a disability or impairment at the time of injury. For benefits to be paid from the SIBTF, the combined effect of the injury and the previous disability or impairment must result in a permanent disability of at least 70 percent. The fund enables employers to hire disabled workers without fear of being held liable for the effects of previous disabilities or impairments. SIBTF benefit checks are issued to injured workers by the SIBTF Claims Unit after benefits are awarded by the Workers’ Compensation Appeals Board.
New York Uninsured Employers Fund
- If an employee is hurt when there is no workers' compensation policy in effect and that employee chooses to file a workers' compensation claim, the employer will be liable for the actual cost of medical care and compensation payments, in addition to penalties. If a corporation has failed to secure workers' compensation coverage, the president, secretary and treasurer of a corporation are personally liable for the medical care, compensation payments, penalties and possible criminal prosecution.
The New York State Workers' Compensation Board's Bureau of Compliance oversees uninsured claims. The Uninsured Employers Fund (UEF) is the funding mechanism for compensation and medical payments to injured employees whose employer was not properly insured at the time of the accident.
Risks to an uninsured employer
The risks to an uninsured employer are many, and can threaten the continued existence and viability of the firm. These risks include:- Possibility of business closure
- Large fines imposed by the California Labor Commissioner
- Exposure to civil suits by injured workers
- Criminal conviction and personal fines
- ImpositionImpositionImposition is one of the fundamental steps in the prepress printing process. It consists in the arrangement of the printed product’s pages on the printer’s sheet, in order to obtain faster printing, simplified binding and less waste of paper....
of a 10% surchargeSurchargeA surcharge may mean:*an extra fee added onto another fee or charge** Fuel surcharge, sky freight charges which represents additions due to jet fuel prices.** Bunker adjustment factor, sea freight charges which represents additions due to oil prices....
in addition to the disability claim, plus attorney fees for the worker
Dealing with Problems
When an uninsured employer does face a real problem, such as a prospective fine, prosecution, or employee injury, or is actually sued, there are steps the employer can take to minimize the consequences. Several established law firms, can represent the employer in all administrative actions and appeals, and advice the employer how to proceed. The goal for the uninsured employer is not only to achieve resolution to the immediate problem, but also to protect the assets of the firm, and to reach an accommodation with the regulatory agencies that enables the company to go forward in complianceCompliance
Compliance can mean:*In mechanical science, the inverse of stiffness*Compliance , a patient's adherence to a recommended course of treatment...
with the law.
External links
- HOPKINS v. UNINSURED EMPLOYERS' FUND
- Tennessee Department Of Labor and workforce development Uninsured employers fund
- State of New Jersey Uninsured Employers Fund
- Zachary Sacks, leading California Workers’ Compensation Defense Attorney is listed as a Leader/Influencer for America’s Leading Workers’ Comp Leaders and Influencers
- Montana Uninsured employers fund
- Utah Uninsured employers fund
- Findings Of Fact AND Conclusions Of Law On Debtors' Objection To Claim