Employer Frequently Asked Questions
Insurance Coverage Requirements / Issues
What is workers’ compensation?
If an employee is injured by accident or occupational disease arising out of and in the course of their employment, they may be entitled to workers’ compensation benefits. Workers’ compensation insurance covers the risk of an employee getting injured on the job. Workers’ compensation is different and separate from unemployment compensation, Social Security disability benefits, health and accident insurance, or other disability benefit plans provided by the employer.
The Nebraska Workers’ Compensation Act (the Act) is found at Section (§) 48-101 to § 48-1,118 of the Nebraska Revised Statutes (laws, written as “NEB. REV. STAT.”). It provides the only avenue for employees to obtain benefits from their employer for their work-related injuries.
Who is covered by Nebraska workers’ compensation?
The Act applies to most employees. It does not apply to independent contractors. Most Nebraska employers are required to have workers’ compensation insurance to make sure coverage is in place if employees are injured while working. Exceptions, such as for federal employers, can be found in NEB. REV. STAT. § 48-106.
What workers’ compensation coverage do I need if I am a nonresident employer (an employer based outside of the State of Nebraska) with employees doing business in Nebraska?
Under the workers’ compensation laws of Nebraska, most employers performing work in this state must obtain private insurance coverage to cover the risk of injury to their employees on the job. See the frequently asked question (FAQ) entitled, “Who is covered by Nebraska workers’ compensation?” The Nebraska Workers’ Compensation Act applies to every nonresident employer performing work in the state, for any length of time, who employs one or more employees in the regular trade, business, profession, or vocation of the employer. Workers’ compensation coverage must be obtained from an insurance company licensed to provide workers’ compensation coverage in Nebraska, unless the employer is authorized to self-insure workers’ compensation liability under Nebraska law.
A number of other states provide workers’ compensation coverage through a state fund. Currently, there is no state fund licensed to provide workers’ compensation coverage in Nebraska. Nebraska also has no cooperative agreements to honor workers’ compensation coverage provided by state funds in other states.
The Nebraska Workers Compensation Insurance Plan (NWCIP) provides workers’ compensation and employers’ liability coverage to employers who are unable to secure coverage through the voluntary market.
If you are a nonresident employer who already carries a workers’ compensation policy, you may check with your insurer or the Nebraska Department of Insurance to verify whether the carrier is licensed to provide coverage in Nebraska.
How may an employer comply with the statutory requirement that workers’ compensation coverage be provided?
Under the Nebraska Workers’ Compensation Act, there are only three methods by which employers may fulfill their obligation to secure payment of compensation:
by purchasing a policy of workers’ compensation insurance from a private insurer licensed by the Nebraska Department of Insurance to write workers’ compensation insurance (this includes coverage through the Nebraska Workers Compensation Insurance Plan (NWCIP));
by applying to the Nebraska Workers’ Compensation Court and obtaining the court’s authorization to self-insure; or,
in the case of an employer who is a lessor of one or more commercial motor vehicles leased to a self-insured motor carrier with its principal place of business in Nebraska, by entering into an effective agreement with the self-insured motor carrier that such carrier will pay workers’ compensation benefits to an injured driver. This method will only satisfy the employer’s obligation with respect to drivers. Any obligation with respect to other employees must be satisfied under one of the first two methods.
Do I need to file proof of workers’ compensation coverage with the court?
No. The insurer will notify the court when you purchase a policy of workers’ compensation insurance. After receiving proof of coverage from your insurer, if the court has any questions, you may be asked to confirm details about that coverage.
Is self-insurance an option for employers?
Employers who satisfy certain requirements and have been approved by the court may self-insure. The employer must be a corporation or political subdivision, with a minimum of five years in business under the present organizational structure, have a minimum of 100 employees, a strong financial base, and a positive program for safety. Once approved, a self-insurer must file a surety bond and excess insurance with the court. Any employer not approved by the court must carry a policy of workers’ compensation insurance, or otherwise secure the payment of compensation as required by law.
What are the penalties for an employer's failure to provide workers’ compensation insurance coverage?
Any one or more of the following penalties may be applied:
A civil fine not to exceed $1,000.00 for each violation. Each day of continued failure to secure coverage constitutes a separate violation.
If criminally charged, imprisonment for not more than one year, a $1,000.00 fine, or both.
Employers may be enjoined (prohibited) from doing business in Nebraska until compliance is secured, in addition to the civil fine mentioned above.
Also, an injured employee may sue the employer for damages in district court, and the employer will lose its common law defenses.
How do I determine whether a worker is an independent contractor or an employee?
The Nebraska Workers’ Compensation Act (Act) applies to the State of Nebraska, to every governmental agency created by it, and to every employer in the state employing one or more employees in the regular trade, business, profession, or vocation of the employer. Thus, virtually all employees are covered by the Act, including employees of private industry, state and local government, part-time employees, minors, and employees of charitable organizations. However, employers are not required to provide coverage for independent contractors. At times, there is disagreement on whether a worker is an employee or an independent contractor. While the Act does not define “independent contractor,” case law provides several factors to consider when determining whether a worker is an employee or an independent contractor. This decision is made on a case-by-case basis, and no single factor is determinative. The Nebraska Supreme Court applies a ten-factor test which is summarized in the following downloadable PDF file: Factors considered when determining whether a worker is an independent contractor or an employee.
Are agricultural operations subject to the Nebraska Workers’ Compensation Act?
The status of agricultural operations under the Nebraska Workers’ Compensation Act was changed by LB 210 from the 2003 session of the Nebraska Legislature. Employers engaged in an agricultural operation are exempt from providing workers’ compensation insurance coverage if they employ only related employees. Agricultural employers who employ unrelated employees are also exempt unless in a calendar year they employ 10 or more unrelated, full-time employees, on each working day for 13 calendar weeks (consecutive or not). The act applies to an employer 30 days after the 13th week.
An employer exempt from the act may elect to provide workers’ compensation coverage for its employees. Such election is made by the employer obtaining a workers’ compensation insurance policy from an insurer licensed to write workers’ compensation insurance in Nebraska.
Every exempt employer who does not elect to provide workers’ compensation insurance coverage must give all unrelated employees the following written notice at the time of hiring or at any time more than 30 calendar days prior to the time of injury: “In this employment you will not be covered by the Nebraska Workers’ Compensation Act and you will not be compensated under the act if you are injured on the job or suffer an occupational disease. You should plan accordingly.” The notice must be signed by the unrelated employee and retained by the employer. Failure to provide this notice subjects an employer to liability under the act for any unrelated employee to whom such notice was not given.
The following definitions are included in LB210:
Agricultural operation: The cultivation of land for the production of agricultural crops, fruit, or other horticultural products; or the ownership, keeping, or feeding of animals for the production of livestock or livestock products.
Full-time employee: A person who is employed to work one-half or more of the regularly scheduled hours during each pay period.
Related employee: A spouse of an employer and an employee related to the employer within the third degree by blood or marriage. This includes parents, grandparents, great grandparents, children, grandchildren, great grandchildren, brothers, sisters, uncles, aunts, nephews, nieces, and spouses of the same.
Select the following link for further information: Agricultural Operations and Workers’ Compensation.
How do I verify that workers’ compensation insurance coverage is in place?
To verify workers’ compensation insurance coverage, you may select this link to go to the court’s Nebraska Proof of Coverage Online Look-Up Application. Members of the public may search for workers’ compensation insurance information for a particular employer, on a particular date, through our website. This service is provided free of charge. If you cannot find the information you are looking for, you may contact the court directly from this search app.
Who can I contact with insurance policy questions?
What if I suspect workers’ compensation fraud or unfair claims practices?
When An Injury Occurs
What should an employer do after receiving notice of an on-the-job injury?
The employer should notify its workers’ compensation insurer of the injury or occupational disease. The employer / insurer should file a First Report of Alleged Occupational Injury or Illness with the court within 10 days of the date of the notice of injury. The injured employee is not responsible for filing this report.
Who chooses the doctor for treatment of an employee’s injury?
There are rules about whether the employee or employer chooses the doctor. The employee has the right to select a physician who has maintained the medical records of the employee (or an immediate family member) when the employer notifies the employee of this right. If the employee does not have or does not choose such a physician, then the employer may select the physician. If the employer does not give proper notice to the employee regarding the right of selection, then the restrictions on choosing and changing physicians do not apply and the employee has the right to select any physician. The employee also may select a physician to perform a major surgical operation or in cases involving dismemberment. “Physician” means any person licensed to practice medicine and surgery, osteopathic medicine, chiropractic, podiatry, or dentistry in the State of Nebraska or in the state in which the physician is practicing. More information about Choosing a Doctor for a Work-Related Injury can be found on the court’s website.
May an employer directly pay medical bills for a workers’ compensation claim?
Unless an employer is self-insured, it is not permitted to directly pay for medical treatment required under the Nebraska Workers’ Compensation Act. In essence, this would be an attempt by the employer to self-insure its liability for such treatment without first being approved by the court for self insurance as required in the Act and rules of the court. In addition, the Nebraska legislature has addressed the issue of payment for small medical claims and specifically determined that payment must be made by the insurer, rather than the employer. This is included in 48-146.03, which provides for a medical deductible option for workers’ compensation insurance policies. That section first establishes such a deductible but then states that the insurer shall pay the entire cost of medical benefits for each claim irrespective of the deductible provision. The insurer is then to be reimbursed by the employer for any deductible amounts paid by the insurer.
What is required for an employer / insurer to receive a release from liability?
Under the Act, an employer / insurer is only released from liability (legal obligation to pay workers’ compensation benefits) if the employee and employer / insurer agree to:
(a) file a Lump Sum Settlement Application which is reviewed and approved by the court, or
(b) file a Release of Liability and the court enters an order dismissing the case.
If the employee is not represented by an attorney, the settlement must be reviewed by the court to ensure it is in the best interests of the employee.
What are Second Injury Benefits?
Second injury benefit payments are limited to injuries that occurred before December 1, 1997. To qualify for second injury benefits, an employee must have a prior serious disability documented by the employer through written records when the employee is hired or retained in the employment. If a subsequent injury produces a greater disability than that which would have resulted from the last injury alone, a special trust fund administered by the court will pay for the increased disability and the employer will pay only for the last injury.
May an employer use the services of a managed care plan?
An employer may use the services of a managed care plan that has been certified by the court. However, an employer may not contract directly with a certified managed care plan unless the employer has been approved as a self-insurer by the court. Other employers may use the services of a certified managed care plan that has contracted with the employer’s workers’ compensation insurer or intergovernmental risk management pool. Only a plan that has been certified by the court may be used for workers’ compensation purposes in Nebraska. When a certified managed care plan is used, the employer must give full notice to each covered employee about how to receive services and the rights of the employee under the plan.