Hawaii workers’ compensation insurance
Hawaii law requires every business with employees to carry workers’ compensation insurance. This policy provides medical benefits for employees who are injured on the job.
Who needs workers’ compensation insurance in Hawaii?
Each state has different workers’ compensation laws, and in Hawaii, workers’ compensation insurance is mandatory for all businesses that have employees.
This applies to all types of employees, including full-time, part-time, permanent, and temporary.
However, Hawaii’s requirements for workers’ compensation have a number of exceptions. Certain business owners and executives are not required to carry this coverage, including:
- Sole proprietors and independent contractors
- Business partners
- Any corporate officer who owns at least 50% of the business
Limited liability company (LLC) members are also exempt from workers’ comp as long as they are not considered a business entity, and would stand to receive at least 50% of the LLC’s value if the firm were liquidated or sold.
Even when it's not required, most individuals should still consider carrying workers' compensation coverage, as many personal health insurance plans exclude coverage for work-related injuries.
Are any employees exempt from workers' comp coverage?
While a variety of business owners and officers are exempt from workers’ comp coverage in many states, there are also certain employees in Hawaii who are exempt, including:
- Voluntary or unpaid workers for a religious establishment, school, or nonprofit organization
- Students that are working for a school, university, or college club in exchange for room, board, or tuition
- Authorized priests, rabbis, or ministers
- Domestic workers who make less than $225 over a three-month span
- Anyone providing domestic services to public welfare recipients
- Some 25% stockholders, and all 50% stockholders
- Real estate salespersons and brokers who are compensated entirely by commission
Given the potentially high cost of medical bills from a work-related injury, some employers may opt to voluntarily cover excluded employees.
How much does workers' compensation insurance cost in Hawaii?
Estimated employer costs for workers’ compensation in Hawaii are $1.62 per $100 of covered wages [PDF].
Your workers' comp insurance cost is calculated based on a few factors, including:
- Payroll
- Location
- Number of employees
- Industry and risk factors
- Coverage limits
- Claims history
How do you buy workers' compensation insurance in Hawaii?
Hawaii business owners can compare quotes and purchase a policy from private insurance companies. TechInsurance offers this service with our online insurance marketplace. If they are not qualified to purchase through those means, they can instead buy it from the state’s workers’ compensation insurer, the Hawaii Employers’ Mutual Insurance Company (HEMIC).
Eligible employers can also choose to self-insure their workers’ compensation claims. This means that they’ll cover their own health care and rehabilitation expenses rather than submit them to an insurance company.
How does workers’ comp insurance work in Hawaii?
Workers' compensation insurance covers the cost of medical treatment of an injured employee when they are injured on the job. It will also provide disability benefits while the injured worker recovers.
A workers’ comp insurance policy will usually include employer's liability insurance, which can help cover legal expenses if an employee blames their employer for an injury. However, most workers' compensation policies include an exclusive remedy provision, which prohibits an employee from suing their employer if they accept workers' compensation benefits.
Workers' comp benefits can cover:
- The cost of all medical care related to the injury
- Permanent partial disability benefits
- Permanent total disability benefits
- Temporary total disability benefits
- Death benefits
- Vocational rehabilitation services
- Disfigurement benefits
For example, if a software developer is diagnosed with carpal tunnel syndrome due to keyboard overuse, your workers' comp policy would pay for their medical bills, including long-term medication and physical therapy.
Or, if an employee at your IT consulting firm trips in the office stairwell and suffers a concussion, then your workers' comp policy would pay for their ambulance ride and emergency room visit.
What are the penalties for not having workers’ comp insurance in Hawaii?
If any employer is in violation of the Hawaii workers’ compensation law, they could receive fines and penalties of up to $100 per employee per day that they did not have coverage.
Any company that does not provide workers’ compensation protection also leave themselves open to an employee lawsuit to recover the benefits that should have been paid to them.
Workers’ comp settlements in Hawaii
In Hawaii, any employees who become sick or suffer an injury on the job may agree to a workers’ compensation settlement. A settlement resolves a workers’ compensation claim fully and permanently through a voluntary agreement between the employee and the employer. This agreement will then close the work case in return for the worker receiving a lump-sum payment.
Every Hawaii workers’ compensation settlement must be approved by the Disability Compensation Division (DCD).
Workers’ compensation statute of limitations in Hawaii
According to the Hawaiian statute of limitations, a workers’ compensation claim must be made within two years from the date at which an injury becomes apparent, and five years from the date the accident caused the injury.
It’s the employee’s responsibility to notify the employer following the injury so that the employer has the opportunity to resolve the issue or take any necessary steps to remediate the situation.
