Workers Compensation Insurance provides benefits for employees if there is a work related injury or disease, including:
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Medical treatments
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Disability benefits
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Rehabilitation benefits
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Lost Wages
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Death benefits
In Texas, churches are not legally required to have workers’ compensation insurance, but it’s strongly recommended to protect both the church and its employees.
What if I don’t provide workers’ compensation?
If you don’t provide workers’ compensation coverage, you lose the legal protection against most lawsuits. This means an injured employee can sue you over a workplace injury or illness. Also, if you’re sued, you can’t argue in court that:
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The employee’s negligence caused the injury.
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Another employee’s negligence caused the injury.
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The injured employee knew about the danger and accepted it.
What are the benefits of providing workers’ compensation?
Providing this coverage for your employees carries three essential benefits:
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Protection For Your Employees: A work related injury or illness can be minor or it can be quite serious and having a workers’ compensation policy in place can help you provide financial support and care for your employees when they may need it most.
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Protection For The Church: When an employee is provided workers’ compensation coverage, they typically forfeit the right to sue the employer over an injury.
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Protection Health Insurance May Not Provide: Typically a standard health insurance policy will exclude coverage for work-related injuries and illnesses.
How are Workers’ Compensation premiums calculated?
Workers’ Compensation premiums are calculated based on a few different factors, including:
Payroll
Your payroll records are the basis of premium calculation, including allowances such as utilities, housing, or education.
Employee classification
Different types of jobs come with different levels of risk, and jobs with a higher risk of injury or illness will have a higher premium. While there can be varying types of employee classifications, within a church, they typically fall to these three.
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Clerical Office Employees (administrative and clerical personnel performing general office duties)
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Church: Professional Employees (clergy and paid nursery workers)
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Church: All Other Employees (maintenance or janitorial)
Experience Modification Factor (if applicable)
This is a factor used to determine workers’ compensation premium, reflecting your actual losses against expected losses for your industry. It’s a multiplier that either increases or decreases based on your loss history based on claims information for the past four years, excluding the most recent policy year. Generally the modifier only applies to workers’ compensation premiums of $5,000 or more annually. The National Council on Compensation Insurance (NCCI) is private national corporation that is used to collect workers’ compensation data and calculate the experience modification factor. Texas has some rule exceptions to NCCI’s general criteria, but follows the primary calculation criteria.
What Else Do I Need To Know About Workers’ Compensation?
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Networks
Not every carrier will offer this as an option, but some will offer in-network care or out-of-network care. Those supportive of in-network care will cite vetted providers specializing in work-related injuries and potentially lower claims costs and faster employee recovery times. For this, in-network care will typically be offered at a lower cost, sometimes as much as 12%. For the in-network option, there are however, employee acknowledgments that should be obtained about the employee’s understanding of being in-network. Out-of-network employees are not required to use network providers.
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Volunteers
In Texas, volunteers are generally not covered by workers’ compensation.
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Alternative Policies
“Alternative” accident and health policies covering employees both on and off the job provide some medical coverage, but they do not count as Workers´ Compensation under Texas law. This means you lose your legal protection against lawsuits, and an injured employee could sue you for damages resulting from a work-related injury. Alternative policies have dollar and time limits. If an injured employee’s care expenses exceed the limit, you might have to pay the rest of the cost.
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Foreign Travel/Mission Trip
The key factor in whether workers’ compensation would extend to a staff person is if the mission trip (foreign travel) is considered a work-related activity by the church. If the pastor (most often the pastor – it might be difficult to suggest this would apply to other employees), is acting within the scope of their employment and the mission trip is a legitimate part of their duties, then a workers’ compensation claim is more likely to be valid.
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Contractors
Generally, a contractor is not considered an employee for workers’ compensation insurance if they are deemed an independent contractor, meaning they have control over their work and are not under the direct supervision of the church.
Conclusion
Workers Compensation insurance is an essential coverage for properly protecting your team. If you do not currently have this coverage, contact your insurance advisor or click here for a quote.
