In Arizona, every employer who has one or more employees, whether full-time or part-time, minors, family members or aliens, is required to carry workers compensation insurance. There are some exceptions – sole providers and members of a limited liability company or a limited liability partnership are not required to have workers comp insurance on themselves, but are required to provide workers comp coverage for themselves. Workers comp coverage is not required for independent contractors or a worker whose employment is both casual and not in the usual business of the employer. The only other exception to workers comp coverage is for a domestic servant who works in a home.
Obtaining Coverage
To obtain workers compensation coverage in Arizona, the employer has four options:
- Purchasing a workers compensation insurance policy from an insurance company licensed to do business in Arizona.
- Obtaining approval to self-insure from the Industrial Commission of Arizona.
- Purchasing insurance from the state fund.
- Joining a group of employers who are self-insured.
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Claim Reporting
The employee must report the injury to the employer “forthwith,” but the failure of the employee to report the injury is excusable, if the employee has a valid reason for not reporting the claim timely. The employer is required to report the injury claim to the Industrial Commission of Arizona within 10 days of the claim being made.
Medical Benefits
The employer must provide full medical benefits without time or monetary limitations. The employer can direct the injured employee to a medical provider of the employer’s choice for the initial medical visit. After the first visit to a medical provider, the employee has the choice to continue to treat with the medical provider chosen by the employer, or to select their own medical provider. This does not apply to self-insured employers. If the employer is self-insured, the employer may select the medical provider, except in emergencies.
Temporary Total Disability Benefits
The temporary total disability (TTD) benefits are calculated as two-thirds of the employee’s average monthly wage, with the average monthly wage capped at $3,920.75 for TTD calculation in the calendar year 2011. The Industrial Commission determines the average monthly wage each August for the next calendar year. The maximum weekly TTD benefit in 2011 is $603.19. TTD benefits are paid every two weeks. In addition to the amount paid based on the average monthly wage, there is an additional $25 allowance for dependents added to each biweekly check if the employee has any one or more dependents. The Industrial Commission calculates an annual percentage increase in the TTD benefit, based on changes in the state’s average monthly wage. There is an automatic cost of living increase each January 1, for accidents with a date of injury of January 1, 2010 or later. The minimum TTD benefits are calculated as two-thirds of the employee’s average monthly wage, but there is no statutory minimum amount.
The first seven days of disability (the waiting period) is not paid to the injured employee unless the employee is disabled for more than 14 days. TTD benefits can be paid for as long as the employee remains disabled.
Temporary Partial Disability Benefits:
In Arizona, if the employee is able to return to any type of work, but at a lesser rate of pay then the amount the employee was earning prior to the injury, the employee is entitled to temporary partial disability (TPD) benefits. The TPD benefits are paid at two-thirds of the difference between the pre-injury wage and the post-injury wage.
Permanent Partial Disability Benefits:
Arizona has two types of PPD benefits, scheduled and unscheduled. Scheduled disabilities are for body parts listed in the Arizona law, which includes arm, hand, thumb, fingers, legs, foot, toes, eyes, hearing, teeth, facial disfigurement, and scarring. For PPD, the injured employee receives a percentage of the schedule amount based on the percentage of disability. The PPD is then paid monthly on a percentage of the average monthly wage until the award is paid.
If the employee has an unscheduled disability, the injured employee may receive a percentage of the loss of earning capacity. The claim is referred to the Industrial Commission of Arizona who will review the claimed loss of earning capacity and will decide to what extent the employee will be compensated.
Permanent Total Disability Benefits:
If the employee is determined to be totally disabled as a result of the injury, the employee will continue to receive two-thirds of the average monthly wage for the duration of the disability, even if for life. PTD follows the same dollar caps as TTD.
Death Benefits:
The burial expenses in Arizona are covered for a work-related death up to $5,000. The death benefits for a dependent spouse and children follow the same guidelines as TTD benefits – two-thirds of the average monthly wage – up to a maximum of 500 weeks. There is no dollar maximum for death benefits. The spouse loses the death benefit if the spouse remarries, but receives two years of benefits in a lump sum. Children receive the death benefit until they are 18-years-old, or 22-years-old if enrolled in accredited educational institution.
Vocational Benefits:
Arizona workers compensation law does not require rehabilitation benefits/vocational benefits to be paid for by the workers compensation insurer. The injured employee can apply to the Industrial Commission of Arizona Special Fund for economic assistance with rehabilitation.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information. Contact: [email protected].
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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
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