The workers’ compensation insurance industry was valued at $56.8 million in 2021. There are many work-related illnesses and injuries that occur. Worker’s comp protects employers and provides care for employees in these situations.
It’s important for businesses to have proper workers’ compensation systems in place. Effective systems can provide funds for medical expenses and wages. It also covers any compensation the employee receives for injuries incurred on the job.
Want to learn more? Keep reading to learn about workers’ compensation. And understand the workers’ compensation board and how to protect your business.
What Is Workers’ Compensation?
Workers’ compensation is liability insurance that companies take out to cover employees. This policy provides medical care and income protection for employees with work-related illnesses and injuries.
Workers’ compensation claims generally cover:
- Medical bills
- Lost wages
- Partial disability compensation
- Permanent disability compensation
When filing workers’ comp claims, companies and employees must meet the requirements of the workers’ compensation board in their state.
Purpose of the Workers’ Compensation Board
The workers’ compensation board is a board of professionals that enforce related laws. Each state in the US has its own set of workers’ comp laws. It’s the board’s duty to ensure employees and employers each understand their rights and responsibilities.
A workers’ compensation board approves claims and offers services to help minimize workplace injuries. Information and services of a workers’ comp board include:
- Mediation services
- Appeals board
- Compliance information
- Law interpretation
- Fee schedules
- Employer programs
Many boards offer advice on issues with claims and guidance on offering treatment to injured employees. Oftentimes, workers’ compensation boards are set up with several focused smaller boards under the main one.
Outsourcing Workers’ Compensation Insurance
Navigating workers’ compensation can be difficult and overwhelming. There are many service providers out there to provide workers’ comp insurance for you.
You can protect your business and minimize risks by working with an outsourced agency. Service providers are experts in workers’ compensation and are there to guide you during difficult situations.
Benefits of outsourcing:
- Reduced liability
- Low deductibles
- Same-day approvals
- Same-day certificates
- Updates information on changing laws
- Payroll and tax filing
There are several types of services you can purchase for your company. The most common are an HRO, ASO, or PEO. Learn more about each below.
Differences in HRO, ASO, and PEO Services
There are a few notable differences in the types of services available for businesses. A human resources outsourcing agency is a company that does all human resources-related functions for another business. Typically, these include:
- Workers’ compensation
- Risk management
- Employee management
- Payroll administration
- Administrative services
Discover what each one means and the benefits of using them below.
Human Resources Outsourcing (HRO)
When you hear the term “HRO,” you are hearing about the overall outsourcing function. This has two types of outsourcing called an ASO or a PEO. When you select this option, you generally pick and choose which aspects of HR the company will manage.
Some types of offerings include:
- Training and development
- Workplace safety
- Tax filing
- Payroll administration
When you work with an HRO, you only pick the services you need.
Benefits of an HRO
An HRO can be a great option for small businesses that only have a few employees. It can also be used for sole proprietors that need help managing risk and workplace safety for themselves.
Administrative Services Organization (ASO)
An ASO is called an administrative services organization. When a company uses an ASO, they are allowing a third party to manage their HR function and administrative services.
The difference is with an ASO, the company is responsible for all tax records. And the business remains the employer of record on paper. This means your company will remain responsible for all employee liabilities.
Benefits of an ASO
ASO’s are beneficial for mid-sized companies with up to 75 employees. Working with an ASO can provide companies with better benefits offerings for their employees and lower the state unemployment tax rate.
Professional Employer Organization (PEO)
A professional employer organization, or PEO, is a company that becomes the employer of record for your business. When forming a partnership with a PEO company, you are gaining an expert that offers several HR functions:
- Risk management
- More insurance options
When working with a PEO, your company adopts the processes of the PEO and they handle your HR and employee management needs. Employers typically lower their HR costs when working with a PEO.
Benefits of a PEO
A major benefit of a PEO is that they are responsible for all employee-related tasks and liabilities. Meaning, if your company gets a workers’ compensation claim filed against them, the PEO would be the one handling the details.
Using a PEO also helps save time for your business. Especially for large or small businesses. Managing HR tasks for just a few people, or a large number of people can take a lot of time away from your day.
Get Started Today
Whether you choose a specific HRO function, an ASO, or a PEO, we have the services your businesses need. Is your company is ready to streamline its HR processes while minimizing risks and liabilities? Then it’s time to partner with an external company!
At National Workman’s Comp Solutions, we will handle everything HR-related for your company. This can range from interacting with the workers’ compensation board to providing employee benefits.
If you’re ready to get started, contact us to get a free, personalized quote.