Demystifying Workers' Comp in Georgia

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Layne Davlin

September 3, 2008

Launching your own business is scary enough without all of the applicable state and federal HR rules and regulations. Just as a small business really starts to grow, business owners are hit with a new burden: mandatory workers' comp coverage. In this brief article, I hope to demystify workers comp in Georgia: Who needs it, how to get it, what it will cost, and how to handle claims.

Who Needs It?
According to Georgia's State Board of Workers' Compensation, every business (individual, corporation, association, firm, etc) that regularly employees three or more people, part or full-time, must provide workers' compensation insurance. Exempt or contract employees count in this equation, so make sure to include them in your numbers.

How Do I Get It?
You can acquire workers' comp insurance through several different channels. The most traditional avenue is through your general insurance agency. You can contact several insurance companies by phone or online and ask for quotes on their workers' comp coverage. To do this, you will need to know how much your company earns, the number of employees you have, what duties each employee performs, and how much is paid to employees each year. Every insurance company needs this information to determine a quote for your worker's compensation policy.

You can also look to other sources such as Professional Employer Organizations (PEO), Administrative Service Organizations (ASO), or even some traditional payroll services. Each of these services provides an outsourced solution to handle workers' comp and payroll services - eliminating year end audits and prepayments of workers' comp premiums.

Additionally, if you belong to a professional association such as your local chamber or a group affiliated with your specific field (example: North American Printers Association), ask your representative about workers' comp insurance. He/she may be able to give you the name of an insurance company that provides coverage to many of the group's members. By going through this channel, you might be able to qualify for a discounted rate.

Compare all the quotes you receive to decide which workers' comp policy is right for you. Most of the quotes should be in the same general range. If there is one that is significantly lower than the others, carefully evaluate that provider before choosing to work with them.

What Will It Cost?
A number of factors go into determining the annual premium your insurance carrier will charge. These include your industry classification, your company's past history of work related injuries (known as your experience modification or EMOD), your payroll, any
special underwriting adjustments such as use of a certified health care organization, and any special group or dividend programs you may be eligible for.

How Do I Handle a Claim?
Immediately upon knowledge of injury, an employer must complete form WC-1 (Employers First Report of Injury or Occupational Disease) with its insurer. Your insurance agent will process the claim and guide you on how to respond.

As an employer, you also have a number of options to choose from for the medical care of your employees. Go over these options thoroughly and carefully with your insurer to choose the right option for your employees' needs.

Summary
Finding the right workers' comp insurance does not have to be intimidating. Finding an insurer with a representative you trust is very important. Take the time to ask lots of questions and pay attention to the level of service you receive in the quoting process. This is often a good indicator of the responsiveness and quality of service you will receive once your policy is signed.

Layne Davlin is the founder and CEO of Lawrenceville, Georgia-based NetPEO, an HR outsourcing brokerage firm that provides complimentary services to small and mid-sized companies nationwide, matching them with the HR service provider that best suits their needs. Over the last two decades, Mr. Davlin has worked in several sales and senior management positions within both private and publicly traded HR companies.

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