An Employer's Guide to Workers Comp Exemptions

A small business owner is sitting at a table holding a pen, reviewing his company's worker's comp documents

Understanding Workers' Compensation Exemptions

Many entrepreneurs don't realize what a significant liability it can be to run a business until they're already well in the thick of it. There is risk from virtually all angles. If yours is the type of organization that interacts with members of the public, a customer could slip and fall. If you perform a service on behalf of others, they might say those services caused some type of damage. The list goes on.

Because of all this, business liability insurance is often one of the biggest expenses most companies have. A major chunk of that is workers compensation insurance - although workers comp exemptions could ease a bit of that burden, provided you approach things from the right angle.

What is Workers Compensation Insurance?

If yours is a business that hires and maintains employees, you need to have workers compensation insurance. This is a type of insurance that is required by law (in all states except Texas) that provides financial coverage for employees who are injured or become sick while performing their duties.

Who Qualifies for Workers' Compensation Exemptions?

The answer to this question depends on the specific type of workers' compensation exemption in question. Often, companies seek exemptions to avoid providing insurance for independent contractors, who are typically not considered employees under workers' compensation laws. In some states, business owners, partners, and corporate officers may also qualify for exemptions, especially if they have a certain level of ownership or control over the company. However, the criteria and process for obtaining an exemption can vary widely by state, industry, and the nature of the work being performed.

Workers' Compensation Exemptions in Georgia

In the state of Georgia specifically, you need to regularly employ three or more people to be required to have workers compensation insurance. While corporate officers and LLC members in the state are automatically included in this, it is possible to apply for an exemption. However, only five officers or members can be exempt from coverage at any one time.

How to Apply for a Workers' Compensation Exemption

Applying for a workers compensation exemption is something that can be done using Form WC-10. The state of Georgia also offers a free online tool that you can use to verify your organization's current workers compensation insurance coverage. You can search for your business by name or by using the FEIN - whichever you prefer.

When filling out the form, you'll need to provide a few key pieces of information. This includes information about the employee in question, and a description of the type of company you operate. You'll need to provide not only proof that you own the business, but proof that all relevant licenses are up-to-date, too.

A man is sitting at a desk filling out workers' compensation exemption paperwork

If necessary, you'll also need to provide contact information for your company's workers compensation insurance carrier. Note that this is needed if you do offer workers compensation insurance to some employees, but not to all of them. If you're trying to avoid the requirement to provide this level of coverage altogether, you wouldn't necessarily have this information.

You'll also have to pay an appropriate application fee. Once everything is filled out and submitted, your application will either be approved or denied. Assuming that the application is approved, you'll get a certificate that will act as proof moving forward.

Benefits of Workers' Compensation Exemptions

The major benefit of applying for workers compensation exemptions is one of cost-savings. Not having to pay for workers' compensation insurance should dramatically reduce the amount you'll pay for business insurance coverage across the board. The money that you free up can then be funneled back into other areas of the business where it can do the most good.

Risks and Drawbacks of Workers' Compensation Exemptions

Of course, just because you're able to apply for a workers compensation exemption doesn't necessarily mean that it is a good idea.

It's entirely possible that you could apply for one on certain grounds and get approved - only to turn around and get sued by employees who feel their employer is liable for any injuries they sustained while on-the-job.

Yes, it's true that you were granted the exemption - but that doesn't mean you're automatically in the clear forever. At a bare minimum, you'll have to pay money to litigate that lawsuit, even if you do come out victorious in court. That can be a huge financial burden - not to mention a massive time commitment - that you might not be able to afford to deal with.

The other downside comes by way of a scenario where you're applying for a workers compensation exemption as a sole proprietor. Keep in mind that whatever health insurance you get won't automatically cover you for any workplace injuries. You might have to pay out of pocket for any necessary medical care. You think you're saving money now by avoiding workers compensation insurance premiums, but you could easily be paying far more once all medical coverage is considered.

Secure Your Coverage: Get Workers' Compensation Insurance with BIS Benefits

A man is sitting at a desk using a calculator and calculating the cost of the coverage he's gained for his business and employees

At BIS Benefits, we understand that different factors always impact the amount that you'll pay for workers compensation insurance. These can include but are certainly not limited to job risk, claims history, business and payroll size, and more.

More than anything, we want to help make sure that you're paying for the exact type of coverage you need - the kind that will protect you in the event that a claim is filed and that won't cost an exorbitant amount of money when one isn't. That's why we take the time to get to know as much about your business, and your personal goals, as possible.

Only then will we be able to make sure that you have the correct coverage for the most cost-effective prices possible. At that point, you can worry less about insurance and focus more of your attention on running the most successful business that you can, free from restrictions or compromise.

If workers comp exemption is a topic that you're eager to find out more about, or if you just have any additional questions that you'd like to go over with someone in a bit more detail, please don't hesitate to contact the team at BIS Benefits today.

< Older Post

Newer Post >

What Employee Benefits Do Georgia Workers Want in 2025?

by Drew Holley • 17 January 2025

Key Insights on Employee Benefits for Small Businesses in Georgia Employee benefits play a pivotal role in attracting and retaining talent, particularly for small businesses striving to compete with larger corporations. BIS Benefits has partnered with Mployer Advisor to bring you an exclusive 2025 Employee Benefits Benchmarking Report, tailored specifically for businesses in the South Atlantic region with 25–49 employees. This blog highlights key findings from the report and how they can help you craft a competitive benefits strategy. Want to dive deeper? Download the full 2025 Employee Benefits Benchmarking Report to gain actionable insights and trends tailored for businesses like yours. Key Findings from the 2025 Employee Benefits Benchmarking Report 1. Medical Benefits: Affordability and Trends 76% of employers in the South Atlantic region offer medical benefits, with 63% of employees enrolling. On average, small businesses contribute $580 per month for single coverage and $707 for family coverage —in line with regional benchmarks. High-deductible health plans (HDHPs) with health savings accounts (HSAs) are gaining traction as cost-saving options. What this means for your business: Offering at least one affordable plan option with employer contributions around regional averages helps you stay competitive in the labor market. 2. Supplemental Benefits: A Strategic Edge Dental and vision benefits are offered by over 80% of employers in this cohort, with high employee enrollment rates of 98% and 93%, respectively. Life insurance payouts are commonly structured as multiples of earnings, with the majority of plans offering 1–2x salary coverage. Voluntary benefits such as critical illness and accident insurance are being increasingly adopted to attract talent without significant cost increases. Takeaway: Supplemental benefits can enhance your overall offering without breaking your budget. Highlight these options to potential hires to differentiate your package. 3. Retirement and Financial Benefits: Securing the Future 91% of employers offer defined contribution retirement plans (e.g., 401(k)), with 74% of employees participating. Employer matching contributions average between 4%–6% , a vital component in employee retention. Auto-enrollment and auto-escalation features are becoming standard, simplifying the process for employees and increasing participation. Action Step: Ensure your retirement plan includes competitive matching and user-friendly features like auto-enrollment to boost engagement. 4. Leave and Flexibility: Meeting Modern Expectations Consolidated leave programs (combining sick, vacation, and personal days) are offered by 69% of employers , reflecting a trend toward greater flexibility. Remote work options and flexible schedules are growing in popularity, with 40% of businesses offering work-from-home arrangements . How to stand out: Consider adding or expanding remote work policies and flexible scheduling to meet employee expectations in 2025. Why Download the 2025 Employee Benefits Benchmarking Report? This comprehensive report provides: Regional and national comparisons to help you understand how your benefits stack up. Detailed insights into cost-sharing, plan designs, and employee preferences. Actionable data on emerging trends like HDHPs, flexible leave policies, and wellness programs. The report equips Georgia small businesses with the knowledge needed to craft a competitive benefits package that aligns with employee needs and business goals. Download the Report Today Don’t miss out on the opportunity to gain insights that can transform your benefits strategy in 2025. Download the full report here by entering your email address and receive actionable data to help your business attract and retain top talent.

HDHPs: How High Deductible Health Plans Can Save Money for Employers and Employees

by Drew Holley • 6 January 2025

High Deductible Health Plans (HDHPs) are transforming how employers and employees manage healthcare costs. By offering lower premiums and pairing seamlessly with Health Savings Accounts (HSAs) , HDHPs provide a strategic way to save money while maintaining access to quality healthcare. In this article, we’ll explore how HDHPs work, their benefits for employers and employees, and how to maximize their potential. To learn more about the benefits of HDHPs and related options, visit our Group Benefits page . What Are HDHPs? HDHPs are health insurance plans characterized by higher deductibles and lower monthly premiums. These plans encourage smarter healthcare spending, as individuals must pay for medical expenses out-of-pocket until their deductible is met. A significant advantage of HDHPs is their compatibility with HSAs. HSAs allow employees to save pre-tax dollars for qualified medical expenses, reducing taxable income and providing a long-term financial safety net. Unlike Flexible Spending Accounts (FSAs), HSA funds roll over year after year, making them an ideal savings tool. To better understand the differences between HSAs and FSAs, check out our detailed guides on Health Savings Accounts and Flexible Spending Accounts . The Employer Advantage: Cost Savings and Competitive Benefits Employers benefit significantly from HDHPs because they reduce overall premium costs while providing employees with greater flexibility. These plans can be part of a larger strategy to attract and retain top talent, especially when paired with proper education about HSAs. Offering HDHPs demonstrates a commitment to cost-effective, forward-thinking benefits management. Businesses can tailor these plans to align with workforce needs, ensuring employees feel supported while keeping costs under control. For help designing a comprehensive benefits package, visit our Group Benefits page for insights on tailoring solutions for your team. The Employee Advantage: Affordable and Flexible Coverage For employees, the main draw of HDHPs is their affordability. With lower premiums, employees can save on monthly healthcare costs while taking advantage of HSAs to manage out-of-pocket expenses. HSAs offer employees tax savings, flexibility, and long-term benefits, making them an excellent choice for those planning for future healthcare needs. This is especially valuable for individuals and families who don’t anticipate frequent medical expenses but want to ensure coverage for unexpected costs. Learn how to maximize your savings with our guide to Health Savings Accounts , a vital companion to any HDHP. Key Differences: HSAs vs. FSAs While both HSAs and FSAs offer tax advantages, they differ significantly in how funds are managed. HSAs allow for funds to roll over indefinitely and are owned by the employee, even if they change jobs. FSAs, on the other hand, are subject to the "use it or lose it" rule, meaning unspent funds may be forfeited at the end of the year. Employees using FSAs should familiarize themselves with rollover and grace period options to avoid losing money. To better understand how these accounts compare, check out our Flexible Spending Accounts overview . Industry Trends: HDHPs Are Gaining Momentum HDHPs are increasingly popular across various industries, from technology to manufacturing. Businesses see these plans as a way to manage rising healthcare costs while still offering competitive benefits. As employers look for cost-effective solutions, HDHPs stand out as a forward-thinking option that balances affordability with quality. Pairing HDHPs with educational resources ensures employees feel confident in navigating their healthcare choices. Key Takeaways For Employers: HDHPs lower premium costs while providing flexibility for employees. For Employees: When paired with HSAs, HDHPs offer significant tax advantages and long-term savings opportunities. For Everyone: Understanding the differences between HSAs and FSAs is essential for making informed benefits decisions. Whether you’re an employer or employee, HDHPs can be a game-changer for managing healthcare costs. To explore how these plans fit into your benefits strategy, visit our pages on Group Benefits , Health Savings Accounts , and Flexible Spending Accounts .

Drew Holley and Jessie Couch Discussing HSA and FSA

FSA vs HSA | Which One is Best for your Georgia Employees?

by Drew Holley • 12 December 2024

Use It or Lose It? Demystifying FSAs and HSAs Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are popular options for managing healthcare expenses while enjoying some tax benefits. However, these two accounts differ significantly in how unused funds are handled at the end of the year. This difference can impact your financial planning and overall healthcare strategy. In this article, we'll delve into the "use it or lose it" concept, explore how it applies to FSAs, and compare it with HSAs, highlighting why it's important to understand these rules when making your benefits choices. For more information on HSAs and FSAs, watch the full episode of the BIS Podcast here or below. FSAs and the "Use It or Lose It" Rule FSAs have traditionally been governed by a "use it or lose it" rule. This means that any unspent funds in your account at the end of the year would be forfeited. This requirement made it crucial for employees to accurately estimate their healthcare costs and spend all allocated FSA funds before the year ended. However, since the introduction of the Affordable Care Act (ACA), things have changed. Today, many employers offer more flexibility with FSAs. Thanks to the ACA, employers may now allow employees to carry over a limited amount of unspent funds from one year to the next—originally $500, now adjusted for inflation to about $650. Alternatively, some employers may offer a grace period of up to two and a half months after the end of the plan year to use any remaining funds. It’s important to know what rules apply to your FSA so that you don’t leave any money on the table. To learn more about maximizing your benefits options, check out our guide on employee benefits strategy . HSAs: A Different Story Unlike FSAs, HSAs do not follow the "use it or lose it" rule. Funds contributed to an HSA remain in the account year after year, regardless of whether or not you use them. This is one of the key benefits of an HSA—you can build up savings over time to cover future medical expenses. Plus, the funds in an HSA are portable, meaning you take them with you if you change jobs or retire. This makes HSAs a valuable tool for long-term healthcare planning. If you're considering switching to a High Deductible Health Plan (HDHP) to become eligible for an HSA, it’s important to weigh the pros and cons. For more information about HDHPs and their compatibility with HSAs, check out our Health Savings Account service page . Making the Most of FSAs and HSAs Whether you choose an FSA or an HSA, it’s important to understand how to make the most of these accounts. For FSAs, knowing your employer's specific rules about rollover and grace periods can help you avoid losing funds. For HSAs, the focus should be on maximizing contributions, as the funds will continue to grow tax-free, providing a cushion for future medical needs. Both FSAs and HSAs can be used for a wide range of eligible expenses, including medical, dental, and vision care. If you want a comprehensive overview of your coverage options, our group health insurance page is a great resource. Additionally, if you work in a specialized industry like construction or technology, it's beneficial to explore options that are tailored to your needs. Industries like construction and technology have unique challenges that may impact the type of coverage you choose, including how you use tax-advantaged accounts like FSAs and HSAs. Key Takeaways About FSAs, HSAs, and the "Use It Or Lose It" Rule: FSAs : Historically governed by a "use it or lose it" rule, thanks to the ACA, employers may now allow employees to carry over a limited amount of unspent funds from one year to the next—originally $500, now adjusted for inflation to about $650. Be sure to understand your employer's policies. HSAs : Funds roll over year after year and are portable. HSAs offer significant long-term savings opportunities, particularly for those on HDHPs. Plan Carefully : Knowing how these accounts work can save you money and help you better prepare for healthcare costs now and in the future. To get more insights into how you can make the most of your employee benefits, visit our resources page and discover helpful tools to make informed decisions for yourself and your family.