3.3 Indiana Workers' Compensation Insurance

Who Must Carry Coverage

Under Indiana Code 22-3-2-2, workers' compensation is required for every employer with one or more employees. Indiana's one-employee trigger is stricter than states (such as several southern states) that exempt employers below three or four employees.

Covered Workers

• Full-time, part-time, and seasonal employees
• Minors (even if illegally employed)
• Corporate officers and executives (generally included)
• Out-of-state workers with an Indiana employment relationship

Default Exemptions (May Elect In)

Independent contractor test: A worker is not automatically a contractor because a company says so. Indiana applies common-law right-to-control factors; in construction, a contractor must file a Certificate of Exemption with the Worker's Compensation Board and the Department of Revenue. Misclassifying employees to dodge premium is a frequent enforcement target.

How Coverage Is Obtained

Exam Tip: The trigger is one employee, and the workers' compensation system, not the BMV, governs. Confusing the auto BMV requirements with the employment-based comp requirement is a common error.

Benefits Provided (No-Fault)

Benefits flow regardless of who caused the injury, as long as it arose out of and in the course of employment.

Medical

• All reasonable, necessary treatment — no deductible or copay to the worker.
• The employer/insurer directs medical care in Indiana (chooses the treating physician); a worker who refuses authorized care may forfeit benefits.

Disability (Indemnity)

There is typically a 7-day waiting period before TTD begins, and it is paid retroactively if disability exceeds 21 days. Indiana caps the AWW used for calculations under a statutory schedule that adjusts periodically.

Death

• Reasonable burial/funeral allowance.
• Weekly benefits to dependents based on the deceased's AWW for a statutory number of weeks.

Exclusive Remedy Doctrine

Workers' compensation is the exclusive remedy for covered workplace injuries. The injured worker gives up the right to sue the employer for negligence; in return the employer guarantees prompt, no-fault benefits. The shield is forfeited if the employer failed to carry required coverage — then the worker may both claim benefits and sue at common law, and the employer loses defenses like comparative fault.

Penalties for Non-Compliance

Posting & Statute of Limitations

Employers must post a notice stating that coverage is in force, naming the insurer with address and phone, and explaining how to report injuries. Workers generally have two years from the date of injury (or from the last TTD payment in continuing cases) to file a claim with the Worker's Compensation Board.

Exam Tip: Remember the layered penalty — criminal misdemeanor plus civil penalties up to $10,000 plus loss of the exclusive-remedy shield. Failing to insure exposes the employer on every front.

The Worker's Compensation Board & Claims Flow

Indiana's system is administered by the Worker's Compensation Board of Indiana, not the Department of Insurance. The Board resolves disputes, approves settlements, and oversees self-insurers. A claim typically moves through these stages:

1. Injury reported to the employer promptly (the worker should notify within 30 days to avoid disputes).
2. Employer files a First Report of Injury with its carrier and the Board.
3. Medical care begins with the employer-directed physician.
4. Indemnity (wage) benefits start after the waiting period if the worker is disabled.
5. Dispute resolution — if the worker and insurer disagree on benefits or impairment rating, either side files an Application for Adjustment of Claim with the Board, which holds a hearing before a single member, with appeal to the full Board.

Coordinating with Other Coverages

Workers' compensation is primary for work injuries; group health plans exclude occupational injuries. An injured worker generally cannot pick health insurance over comp for a workplace injury. If a third party (not the employer) caused the injury — say a defective machine — the worker may pursue a liability suit against that party, and the comp insurer holds a subrogation lien to be repaid from any recovery.

Premium Basis and Experience Modification

Comp premiums are built on payroll by job classification code (set through the ICRB) times a rate per $100 of payroll. A loss-heavy employer earns an experience modification factor (mod) above 1.0 that raises premium; a safe employer earns a mod below 1.0. This ties safety performance directly to cost — a recurring exam theme linking risk management to premium.

Why the Exclusive Remedy Matters

Without coverage, the trade-off collapses: the worker keeps the right to sue and may claim statutory benefits, and the employer cannot raise the usual common-law defenses. That is why the financial and legal stakes of going bare are so severe in Indiana.