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Tax & Incentive Profile
Workers’ compensation provides benefits to injured employees for accidents or occupational diseases arising out of, and in the course of, their employment. Compensation coverage is available through private insurance carriers licensed by the state, but self-insurance is allowed in both states with approval from the states’ Division of Workers’ Compensation.
Costs vary for individual businesses and are dependent upon type of employment (occupational risk), estimated annual remuneration, and the company’s loss experience.
INFORMATION FOR BOTH KANSAS AND MISSOURI IS PRESENTED BELOW.
Employers with a gross annual payroll estimated to be more than $20,000 are subject to the provisions of the Workers’ Compensation Act. Employers may secure workers’ compensation insurance for their employees by 1) obtaining insurance from authorized private insurance companies, 2) becoming self-insured, or 3) becoming a member of a qualified group-funded workers’ compensation insurance pool.
A new rating structure in effect since 1995 allows workers’ compensation insurance coverage to be provided by private insurance companies on a competitive basis. Premiums are determined by applying the rate for a specific occupation, per $100 of payroll, to the annual wage per employee.
Temporary total and permanent partial payments to injured workers are based on two-thirds of a worker’s gross weekly wage, not to exceed $546 per week. Benefits are also available in the cases of permanent total disability or for surviving spouse, dependents and heirs of an employee whose injury resulted in death. Workers' compensation premium rates in Kansas are ninth lowest in the nation.
The state’s administrative costs for workers’ compensation and maintenance of the Workers’ Compensation Fund balance are funded by assessments on the paid losses of insurance companies, group pools, and the self-insured. The most recent assessment rate for administrative costs was 2.79% and the assessment for the Workers’ Compensation Fund was assessed at 0.75%. These rates are set annually based on the previous calendar year’s paid losses and the amounts required for administration and adequate Fund balance.
The Kansas Department of Labor is on the web at http://www.dol.ks.gov
All businesses with five or more employees (excluding agricultural or domestic labor) must provide workers’ compensation insurance to protect their workers in case of job-related injury, illness, or death. Construction employers with one or more employees must provide workers’ compensation insurance.
Companies can offer this protection through a private insurance carrier or they can become self-insured. Premium rates vary depending on the risks associated with special occupations and on the employer’s loss (or injury) experience. Beginning in 1994, insurance rates are set by each insurance company on a competitive basis and employers have the opportunity to shop around for the lowest rates.
As in most states, the premium rates apply to an employee’s total annual salary. The maximum weekly benefit for temporary total disability payments are up to two-thirds of his or her average weekly wage. Additional payments are required if the employee has a permanent impairment or cannot return to work. If the injury results in death, benefits are paid to the employee’s surviving dependents. Missouri’s maximum weekly benefit is $853.08 effective until June 30, 2014.
An additional employer cost related to workers’ compensation is a premium tax to finance the expenses of the Missouri Division of Workers’ Compensation (up to 2%) and a premium surcharge to finance the Second Injury Fund. Both of these charges may be suspended or reduced depending on the amount needed for the administrative costs of the Division or the amount needed to maintain the proper balance of the Fund. In calendar year 2013, the administrative tax is 1.0 percent, the administrative surcharge is 1.0 percent and the Second Injury Fund surcharge is assessed at 3.0%.
To aid in shopping among insurers, the state has set up a toll-free number for employers (888.200.1697). Information on companies with the lowest rates as well as the high, medium, and low rates for any particular class code is faxed back or mailed to the employer shopping for coverage. Additionally, employers can use the web version of the hotline, which provides the insurance rates for all carriers.
The Missouri Divison of Workers' Compensation is on the web at http://www.dolir.mo.gov/wc/
DEFINING THE GREATER KC METRO AREA
Kansas City is a Missouri/Kansas bi-state metropolitan area. All statistical references made to Kansas City Metropolitan Statistical Area (MSA) include the counties of Bates, Caldwell, Cass, Clay, Clinton, Jackson, Lafayette, Platte and Ray in Missouri, and Franklin, Johnson, Leavenworth, Linn, Miami and Wyandotte counties in Kansas. The greater Kansas City area also includes the adjoining Lawrence, KS, St. Joseph, MO, and Topeka, KS MSAs, as well as the Atchison, KS, Chillicothe, MO, Ottawa, KS, and Warrensburg, MO areas.