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Colorado Workers’ Compensation Insurance
The state of Colorado requires most business owners to provide workers’ compensation coverage to their employees.
This gives injured employees the funds they need to cover medical expenses for work-related accidents, and compensates them for disability, lost wages, and more.
Keep reading to learn more about Colorado workers’ compensation laws and how to get affordable insurance coverage.
Is Workers’ Comp Required in Colorado?
Any Colorado business with one or more employees, whether they work full-time or part-time, is required to carry workers’ comp.
The 1915 Colorado Workers’ Compensation Act established this as a requirement for most businesses in the state.
But there are some businesses and workers who may qualify for exemptions, including:
- Independent contractors
- Sole proprietors
- Corporate officers
- Limited liability companies
- Real estate employees with commission-based work
- Railroad workers covered by federal law
- Domestic work if the job occupies under 40 hours or under 5 days per week
- Maintenance or repair work that costs less than $2,000 per calendar year
How Does Workers’ Compensation Insurance Work in Colorado?
Workers’ comp in Colorado works similarly to the way it does in other states. When an employee gets injured at work, they can file a claim to receive compensation for medical care, lost wages, and other related expenses. This is overseen by the Colorado Division of Workers’ Compensation.
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What Workers’ Comp Covers
Workers’ comp covers a range of work-related injuries and illnesses, such as:
- A fracture or tear from slipping and falling in a restaurant
- A back strain from heavy lifting at a warehouse
- A concussion from a construction site accident
- An occupational disease like carpal tunnel, caused by repetitive typing in an office job
In addition to light injuries that simply require one or two doctor’s visits, comp also covers more serious cases that may result in disability or death. Coverage can provide financial compensation for things like:
- Lost wages
- Medical treatment
- Physical therapy
- Chiropractic visits
- Hospital stays
- Prescriptions
- Surgery
- Equipment (such as crutches or a wheelchair)
- Retraining
- Disability benefits
- Death benefits (including funeral expenses and lost income) paid to the employee’s dependents
Colorado Workers’ Compensation Benefits
Depending on the severity of their illness or injury, injured workers may be able to receive certain benefits through workers’ comp. This includes money for lost wages, lasting disability, and death.
Once an employee recovers as much as they can (this is known as maximum medical improvement or MMI), their medical provider will assign them an impairment rating, or a percentage that shows how much the injury has permanently affected them. Based on this rating, the insurance company decides whether the worker will receive disability benefits in the future and, if so, how much.
For example, a construction worker who injures his back and never recovers his full range of movement, making it hard for him to continue working in construction, may be able to receive disability benefits for years.
How much an employee receives and for how long also depends on whether their disability is temporary or permanent, and whether it is partial or total. Here’s the breakdown for disability benefit payments:
- Temporary total disability (TTD) means the employee is completely unable to work at all for the moment, but will eventually recover enough to return to their former job. Payout is two-thirds of an employee’s average weekly wage up to the state’s max, paid every two weeks.
- Temporary partial disability (TPD) means the employee is temporarily limited in what they can do; they may be able to take a different job or continue working at their current job in a limited capacity until recovering fully. Payout is the employee’s current pay subtracted from their wages before the injury.
- Permanent partial disability (PPD) means the employee is permanently limited in what they can do, and will likely have to return to a different job. Payout is calculated based on the doctor’s impairment rating.
- Permanent total disability (PTD) means the employee is completely unable to work and will likely never recover enough to return to any job. Payout is two-thirds of an employee’s average weekly wage up to the state’s max, paid every two weeks over their lifetime.
How Can Businesses Save Money on Workers’ Comp?
Workers’ comp tends to be expensive because it’s charged upfront for the entire year, based on a business’s estimated payroll. To make matters worse, insurance carriers will sometimes charge heavy premiums, and if your estimated and actual payroll don’t match up at the end of the year, you’ll be charged high audit fees to make up the difference.
At Hourly, we solve those problems to improve cash flow and make workers’ comp more affordable. Instead of upfront payments, we offer pay-as-you-go pricing based on your actual payroll, and we calculate your payroll numbers in real time for 99% accuracy, eliminating audit fees and other unnecessary expenses.
FAQs
How much does workers’ comp insurance pay in Colorado?
Workers’ comp payments in Colorado vary based on the extent of an employee’s injuries. If an employee has to miss work to recover, they’ll typically receive two-thirds of their average weekly wage up to the state’s max for as many weeks as they’re absent.
What is the maximum payout for workers’ comp in Colorado?
In 2023, the maximum rate for Colorado workers’ comp is $1,293.25 per week, if the employee has an average weekly wage of $1,939.88.
That’s two-thirds of a worker’s average weekly wage up to the state max.
The maximum combined cap for total temporary disability and permanent partial disability is $238,596.43.
The maximum death benefit paid to dependents is $1,293.25 per week, plus $13,153.53 for funeral and burial expenses.
How long can you be on workers’ comp in Colorado?
Benefits usually end when an employee is able to return to their job and make the same amount they were making before the injury. Of course, that doesn’t always happen. If a worker is permanently disabled, they may be able to receive benefits for the rest of their life.
How do you file a workers’ compensation claim in Colorado?
According to the Colorado Department of Labor and Employment (CDLE), an employer must file a First Report of Injury (FROI) with the Division of Workers’ Compensation (DWOC) within 10 days of the date of injury, if an employee’s injury or illness causes one or more of the following:
- More than three days or shifts of missed work
- Permanent disability
- Death
Employers can file this form online via the CDLE website.
To file a claim for benefits, an employee must:
- Report the incident to their employer (often via human resources) in writing within 10 days of the date of injury
- File a claim within two years of the date of injury by filling out the Workers’ Claim for Compensation (WC15) and submitting it to the Division of Workers’ Compensation
Affordable Workers’ Compensation Insurance in Colorado
As a small business, managing workers’ comp can be stressful. Hourly is here to simplify the coverage process and help you protect your employees without breaking the bank.
With pay-as-you-go pricing based on actual, real-time payroll figures, we help businesses like yours boost their cash flow and say buh-bye to those nasty audit surprises.
Talk to your insurance agent today to see how you can get started.
