How does workers' comp work in Iowa?

It is very important for all employers to know the correct rules and regulations regarding Workers' Compensation Insurance in the state of Iowa. All employers are required to carry coverage, yet many do not know what it covers and how it protects their business. Here we have broken down this coverage in to several topics specific to Iowa.

We do this to help business owners understand workers compensation insurance and arm them with the knowledge to get the best value for their business needs.

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Workers' Comp Rules & Information for Iowa

Who Needs Workers' Comp in Iowa?

In Iowa most businesses that have employees must carry workers' compensation insurance. Under the applicable law certain exceptions listed below apply:

  • Employee that works in agriculture and the employer had a cash payroll of less than $2,500 in the calendar year preceding the injury
  • Employee that work in agriculture and are a family member as defined in the statute (applies to numerous relatives)
  • Domestic and causal employees who earn earn less than $1,500 from the employer during the 12 consecutive months before the injury
  • Persons eligible for compensation under federal law
  • Independent contractors are exempt provided they are actually deemed to be independent for state and federal taxation. If misclassified and later determined to be actual employees the business owner can be liable for the unpaid premiums and any fines or penalties and medical expense incurred by the employee

Does Iowa Allow Workers' Comp Exemptions for Owners?

Sole proprietors, LLC members and partners are not considered to be employees and are excluded from coverage, but may elect to be included. If they choose to be included they must give notice to the insurance carrier by filing a Notice of Election or Rejection of Coverage Form and e-file with the State of Iowa.

Corporate officers limited to President; Vice President, Secretary and Treasurer are included for workers' compensation, but may may choose to be excluded. If they choose to do so they must execute an Iowa Corporate Officer Exclusion Form which must be attached to the policy. In essence, this means that the insured must provide it to the insurance carrier. Iowa requires the Exclusion to be filed on line with the Iowa Division of Workers Compensation. The statue is unclear as to sole proprietors, llc members and partners. In abundance of caution, it is best to file any Notice of Exclusion or Inclusion or Notice of Rejection or Exclusion with the state and the carrier.

What are the Penalties for not Having Workers' Compensation in Iowa?

Both civil penalties and criminal penalties exist in Iowa. Willfully and knowingly failing to carry workers' compensation insurance is a Class D felony which is punishable by up to five years imprisonment and a fine between $750.00 and $7,500.00. Additionally, civil penalties include; any injured employees are given a choice whether they want to proceed in civil court rather than filing a complaint under the state workers' comp laws. The owner is deemed to have a presumption against them for the failure to carry workers' comp insurance and the employee can sue in tort for the full amount of damages which usually amounts to a much higher amount of damages than proceeding under workers compensation laws.

When do I Get an EMR Rating in Iowa?

All businesses start without an experience modification rate. Their effective EMR Rating is 1.00, which is a neutral because it does not increase or decrease premium and makes no adjustment to an insurance carriers workers' comp rates. In Iowa, a business qualifies for an EMR rating when its payroll reaches an amount which generates $7,500.00 in policy premium for the last 2 years or $4500.00 for 2 years or more.

How Long do you Have to Report an Injury at Work in Iowa?

An employee has 90 days to notify their employer of any and all work injuries. If they fail to notify within that time they could be denied benefits by the court. The employer has just 4 days from the time the employee gives notice, or upon actual knowledge of the injury, to file a First Report of Injury. Failure to file the First Report also carries a fine depending on the circumstances. First reports of injuries can typically be filed by phone or online.

How Long can an Employee Remain on Workers' Comp after a claim?

Iowa differs significantly from other states. Employees receive weekly benefits while they are on temporary total disability benefits, temporary partial disability or healing period benefits.

Payments do not end until the employee (1) has returned to work (2) the employee will not reach any significant improvement, or (3) the employee is capable of returning to the same or similar work. If this is contested the employer must give a written 30 day notice that they are filing a claim.

If an employee is totally and permanently disabled they will receive permanent total disability benefits for life at the same rate received under TTD benefits, for life. If an employee is permanently injured but can work in some capacity, you can receive permanent partial disability benefits up to 80% of average wages- subject to a weekly a maximum of $1553.00. If an employee loses a limb or a body part, or a partial loss of use, the Iowa schedule will determine how many weeks he or she may receive benefits.

Iowa Division of Workers' Compensation

1000 East Grand Avenue
Des Moines, IA 50319

Iowa Workforce Development (IWD)

IWD is the state agency working to help improve all aspects of Iowa's workforce. The IWD’s guiding principles are intended to demonstrate a commitment to the state of Iowa, its customers, and its employees.

What is Workers' Compensation?

The basic purpose of the Workers’ Compensation is to provide wage replacement benefits and medical treatment for employees who have been injured or become ill due to a work-related injury or illness. It prevents the employer from bearing the costs of injuries that occur during normal business operations.

How Does Workers' Comp Help my Business?

Your business benefits by not being liable for injuries that occur as a part of normal business operations. This applies whether the injury was the fault of the business or was caused by negligent actions of the employee.

How Does Workers' Comp Help my Employees?

Employees benefit from workers' comp coverage by having lost wages patrtially covered, or paid, while they are hurt or sick and unable to work. It also pays for medical costs they might incur as a result of their sickness or injury.

Iowa is an NCCI State

The state of Iowa uses the National Council on Compensation Insurance (NCCI) to determine rates on insurance class codes. NCCI gathers data, analyzes industry trends, and prepares objective insurance rate and loss cost recommendations. Insurance carriers are able to offer discounts to these recommended rates. It is recommended that employers shop their policy with as many carriers as possible in order to get the best rates for their coverage.

State Insurance Directives Regarding Covid-19

No current rule changes or laws in Iowa.

State Orders Regarding Insurance Claims Related to Coronavirus

No current state orders.

Specialized Programs for Select Industries

We work with our national insurance partners to develop targeted programs with easier underwriting requirements and lower rates. We offer a broad range of business class codes that help streamline the quote process so you get the lowest price for coverage.

Knowing the Iowa workers comp requirements can help lower the cost of coverage.

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Iowa Work Comp Information

Iowa is an NCCI State

The Iowa Division of Workers Compensation oversees insurance in the state. Still, Iowa is under the jurisdiction of National Council on Compensation Insurance (NCCI). This means the NCCI collects statistical data, files annual Workers' Comp Rates, produces experience mod's, and is the Plan Administrator for the Iowa State Fund.

Employers who are unable to find a voluntary workers compensation insurance quote from a private insurance company may apply for State Fund policy through an agency appointed with NCCI. Workers Compensation is one of these agencies.

Let Workers Compensation help your business navigate workers' comp insurance in Iowa.

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Workers' Comp Includes Employers Liability Insurance?

Employers liability insurance is an additional layer of coverage included as part of a workers' compensation insurance policy. Employers Liability is known as Part 2 of the policy. It adds two additional coverages for employers:

Employers Legal Liability and Legal Defense Costs

In today's world, there are a variety of reasons employees and third-parties sue employers for damages. Here a some common types covered by employers liability insurance:

Third Party Lawsuits

Your employee sues another party that may have contributed to the injury, In turn, the third party sues your business.

Consequential Bodily Injury

Another party or individual is injured while providing care for the injured employee.

Dual Capacity Legal Action

An employee files a claim but also attempts to sue the employer for being responsible in other ways outside of the employment relationship.

Loss of Consortium

A spouse sues for damages caused by the loss of companionship or relations.

Employers Liability coverage is not included with coverage in the four monopolistic states. Employers in these states can endorse this coverage onto their General Liability policy. That coverage is commonly known as Stop Gap Coverage.

Workers' Comp Covers IA Employers from Injury Related Expenses & Lawsuits
Employers liability insurance is included under a workers' comp policy in most states.
  • Employers liability coverage is not included in all monopolistic states.
  • All NCCI and most other states' coverage includes employers liability insurance.
Visit NCCI for more resources and information about workers' compensation class codes. Visit United States Department of Labor for more information about government agencies managing workers compensation insurance rates.

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