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The Workers’ compensation is a system of no-fault insurance that provides monetary compensation and medical benefits to employees (or their survivors) for work-related injuries, diseases and deaths. Workers’ compensation is governed by state law.
The Pennsylvania Workers’ Compensation Act (WCA) imposes certain obligations on employers in the state. The Pennsylvania Department of Labor and Industry (PDLI) enforces the WCA and monitors employers’ for compliance.
Workers’ Compensation Coverage Requirements
Under the WCA, almost every employer in Pennsylvania is required to obtain workers’ compensation coverage for its employees. To satisfy this requirement, an employer may either purchase workers’ compensation insurance or obtain approval to self-insure.
The requirement to maintain workers’ compensation coverage is mandatory for any employer that employs at least one employee who:
- Could be injured or develop a work-related disease in Pennsylvania;
- Could be injured outside the state if the employment is principally localized in Pennsylvania; or
- Could be injured outside the state, while under a contract of hire made in Pennsylvania, if the employment is:
- Not principally localized in any state;
- Principally localized in a state whose workers’ compensation laws do not apply; or
- Outside the United States and Canada.
An employers must have workers’ compensation coverage unless every one of its workers is excluded from the WCA’s definition of an employee.
To satisfy the coverage requirement, employers must obtain either:
- A workers’ compensation insurance policy from a private insurance company licensed to do business in the state;
- A workers’ compensation insurance policy from the State Workers’ Insurance Fund; or
- The PDLI’s authorization to self-insure (either individually or as part of a group).
A self-insured employer uses its own assets, rather than an insurance policy, to insure against its obligations under the WCA. Employers may also self-insure as a members of a certified group, which is restricted to businesses of a similar nature.
Any employer wishing to self-insure (or insure itself with a group of other employers) must obtain authorization from the PDLI. This involves submitting audited financial statements along with an application and fee. Self-insured employers are also required to:
- Set aside funds to pay workers’ compensation claims;
- Post security for future claims;
- Maintain an accident and illness prevention program; and
- File program reports with their self-insurance renewal applications each year.
Coverage Notice Requirements
Under the WCA, all employers (including those that are self-insured) must display a poster to notify employees of their workers’ compensation coverage at their primary places of business. The notice must contain the name, address and telephone number of the insurer or other appropriate party to contact regarding workers’ compensation claims.
Employers must also give each employee a copy of a brochure that explains employees’ rights and responsibilities under the WCA. Employers must provide the brochure at the time of hiring a new employee or to existing employees within 30 days of receiving the brochure.
Recordkeeping and Reporting Requirements
Employers must keep a record of every work-related injury or disease of which they have knowledge or about which they receive notice from an employee. This record must be kept available for inspection by the PDLI at all times. In addition, employers must immediately report all work-related conditions to their insurance carriers or, if self-insured, to the person responsible for management of the employer’s compensation program.
If a work-related condition results in an employee’s disability from work beyond the date of injury, the employer must file a report with the PDLI and provide a copy to the insurance carrier:
- Within 48 hours for an injury resulting in death; or
- Within seven days for any other condition.
Employers must also file annual reports of any compensation paid to employees. These reports are due to the PDLI by April 15 each year.
Claim Handling Requirements
In addition to the reporting requirements, an employer must do the following after receiving notice or having knowledge of an employee’s work-related condition:
- Promptly investigate to determine compensability;
- Provide the employee with a clearly written notification of the employee’s rights and duties regarding medical treatment coverage under the PWCA;
- Pay all medical bills for the work-related condition within 30 days of receipt; and
- Pay compensation to the employee within 21 days.
For more information on Pennsylvania’s workers’ compensation requirements for employers, visit the PDLI website or contact your The Safegard Group, Inc. representative.