The Rhode Island workers’ compensation system is a form of no-fault insurance that pays the medical expenses and lost wages of employees injured at work. Every employer in the state with one or more employees is required to carry workers’ compensation insurance.
The employer buys an insurance policy to cover accidents to employees in the workplace. The employer’s insurance company pays claims that are covered under the employer’s insurance policy.
The policy and coverage, unlike general liability or automobile insurance, is defined by the workers’ compensation statute in Rhode Island. Every state has free reign to create its own workers’ compensation system, and states vary by the amount that they pay in benefits and medical fee schedules.
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Rhode Island brought its workers’ comp system more in line with other states in 1992, when lawmakers changed the law here to require every business with at least one employee to carry workers’ compensation insurance. Before that, businesses with three or more employees were required to provide the coverage.
“The one thing that was blatant was the fact that Rhode Island only required businesses with three or more employees to have coverage. Now, Rhode Island is more in line with the rest of the nation,” said Jeff Johnson, vice president of community relations for the Beacon Mutual Insurance Co., which provides workers’ compensation insurance for about 85 percent of all workers in Rhode Island.
Rhode Island businesses with sole proprietors, partners and certain real estate, agricultural and domestic service employees are not covered by the state’s system. Police, firefighters, longshoremen and harbor workers and federal employees are covered under federal workers’ compensation or other programs. Municipal employees are only covered if the municipality has chosen to be covered. Independent contractors are not covered.
Unlike systems in other states, businesses in Rhode Island are not allowed to insure their own employees without being certified by the state.
“Many employers say, ‘I just want to self-insure. I’ll pay my workers’ comp claims.’ Well, you’re not allowed to do that. You’d have to get certified to be a self-insured employer. And that’s really reserved for larger employers – the state looks at their financials and loss histories, and their ability to pay claims. And even then, self-insurers need to post surety and take out an excess insurance policy,” said Matthew P. Carey, assistant director of the Rhode Island Division of Workers’ Compensation.
About 50 firms in Rhode Island are currently self-insured, down from more than 160 businesses that were self-insured a decade ago, said Carey.
The state’s division of workers’ compensation monitors the workers’ compensation system, ensuring that appropriate documents are filed to protect injured workers and employers, that claims are paid correctly and that all required employers have insurance coverage.
The division also compiles information about injuries and costs, provides educational services and carries out fraud prevention. The state’s John E. Donley Rehabilitation Center provides physical and vocational rehabilitation services for injured workers. A special state Workers’ Compensation Court handles legal disputes. The state Department of Business Regulation regulates the rates and licenses of insurers who write workers’ compensation insurance.
The Rhode Island Medical Advisory Board provides oversight and guidance for medical treatment of workers’ compensation injuries. The board has been a great success since it was launched in 1992, said Carey, and other states have since instituted their own medical advisory boards and modeled them after Rhode Island’s.
“The medical advisory board is a group of doctors and medical professionals. They put together protocols for treating different injuries. It’s a way for payers to gauge if something unusual is being done. It’s a way to check that treatment is being done correctly and prevent excessive treatments,” Carey said.
Businesses or workers with problems or questions about workers’ compensation
can call the Rhode Island Division of Workers’ Compensation Education Unit at
(401) 462-8125.
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