Workers’ Compensation in Connecticut: Who Must Carry It
If you have employees in Connecticut, the law almost certainly requires you to carry workers’ compensation; here is who must carry it and the exceptions.
This article is general information about how insurance usually works in Connecticut. Your policy’s own wording decides what it covers. Ask us about yours.
Short Answer
A sole proprietor must accept the Act to be treated as an employer, while officers, LLC members and partners may elect to be excluded. The Insurance Department sets rates each year, and the approved rate for a classification is applied per $100 of payroll. Anyone pulling a building permit must first show proof of workers’ compensation for employees working on the site.
Who Must Carry It
- Employers in general.
- With few exceptions, every Connecticut employer must carry it.
- Sole proprietors.
- A sole proprietor must accept the Workers’ Compensation Act to be treated as an employer for insurance purposes.
- Officers, LLC members and partners.
- These individuals may elect to be excluded from the Act.
- Out of state employers.
- These employers must cover their employees who work in Connecticut.
What the Policy Does
Workers’ compensation typically covers an employee’s medical expenses, rehabilitation costs and at least some part of lost wages, and pays a funeral benefit if an employee is killed on the job. In exchange for state mandated benefits, injured employees generally may not sue their employer.
How the Premium Is Set
- Who sets the rates.
- The Connecticut Insurance Department, not the Workers’ Compensation Commission, sets workers’ compensation rates each year, in consultation with NCCI.
- Classification and payroll.
- Employers are grouped by business classification, and the approved rate for a classification is applied per $100 of payroll, so a roofing rate is higher than a clerical rate.
- Experience.
- An experience modification, or mod, compares your own payroll and loss records, usually the latest three years, with those of similar employers, and it can raise, lower or leave the premium unchanged.
- Premium audits.
- Questions about premium audits go to the Insurance Department, not the Commission.
Building Permits
Anyone pulling a building permit must first show proof of workers’ compensation for employees working on the site. The certificate must be workers’ compensation insurance, not liability or disability. An owner or sole proprietor who will not act as general contractor files Form 7A instead.
Verifying Coverage
The Commission offers a Coverage Verification Service to check an employer’s coverage.
Frequently Asked Questions
Who must carry workers’ compensation in Connecticut?
With few exceptions, every Connecticut employer must carry it.
Does a sole proprietor need workers’ compensation?
A sole proprietor must accept the Workers’ Compensation Act to be treated as an employer for insurance purposes.
Can LLC members and partners opt out?
Corporate officers, LLC members and partners may elect to be excluded from the Act.
Who sets workers’ compensation rates in Connecticut?
The Insurance Department sets them each year, in consultation with NCCI.
Do out of state employers need Connecticut coverage?
Yes. They must cover their employees who work in Connecticut.
Sources
- Connecticut Workers’ Compensation Commission, About workers’ compensation insurance
- Connecticut Workers’ Compensation Commission, Directions for Forms 7A, 7B, 7C
- National Association of Insurance Commissioners, Workers’ Compensation Insurance
- National Council on Compensation Insurance, ABCs of Experience Rating