What to know about workers' compensation in Indiana

Workers’ compensation, which can provide cash and medical care to employees injured on the job, and benefits to survivors in cases of a work-related death, began with a federal program in 1908. It gave benefits to civilian workers whose jobs were hazardous and became the first kind of social insurance established across the United States.

By 1916, the rest of the federal workforce was covered. States meanwhile were enacting their workers’ compensation laws. All but six states and the District of Columbia had them by 1921.

Today, programs exist in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

The details of each program vary by state. Four states—Ohio, North Dakota, Washington and Wyoming—require insurance be obtained through a state-administered fund rather than through a private insurer. Another option is to self-insure for approved businesses. Most states require some businesses to provide coverage and can levy substantial fines for failing to comply. South Dakota and Texas leave the choice to businesses, although Texas makes an exception for construction companies with a government contract.

Simply Business reviewed rules, statistics, and other information about workers’ compensation insurance—including the comprehensive breakdown by the National Federation of Independent Business—to offer a breakdown of what workers’ comp requirements in each state. Rules are subject to updates periodically, so it’s important to stay up-to-date based on your trade and location.

Workers' Compensation in Indiana

Indiana law says all employees must be covered, however, there are some regulations to note. Independent contractors who work in construction need to be certified with the state’s workers’ compensation board. These independent contractors’ injuries are not covered by workers’ comp. Sole proprietors, partners, and those who are part of a limited liability company are excluded but can opt in. For corporate officers, the reverse is true, they are included, but may opt out. Employers without coverage could face fines of up to $10,000. Failing to report an injury could lead to a fine of up to $20,000.

Workers’ Compensation Benefits, Costs, and Coverage, an October 2021 report from the National Academy of Social Insurance, found that total benefits paid to employees rose by 0.4% nationwide from 2015 to 2019. Cash benefits rose by 2%, but medical benefits fell by 1.1%. Standardized benefits fell— cash by 14% and medical benefits by 16.7%—over the same period.

Keep reading to see what workers' compensation looks like for other states in your area.

Workers' Compensation in Illinois

Illinois mandates coverage for virtually all businesses, particularly hazardous occupations such as construction and trucking at a construction site. Sole proprietors may exempt themselves. Also exempt are some immediate family members who live with an employer, relatives of employers who are corporate officers, and relatives who work for an agricultural business that hires fewer than 400 days of labor per quarter during the preceding calendar year. Employers who lack coverage can be fined up to $500 a day, with a $10,000 minimum fine.

Workers' Compensation in Kentucky

Who must provide coverage? Employers with at least one employee. But as in many other states, sole proprietors, partners, and those from a limited liability company are not included in the coverage, though they can decide to cover themselves. Some exceptions: servants in a home with fewer than two full-time workers and farmworkers. Independent contractors must have their own policy to be included in coverage. Employers that fail to provide coverage can be fined up to $1,000 a day for each employee. Kentucky offers a state-administered fund.