Most Montana businesses with employees are required to pay for workers' compensation insurance (WC or workers' comp insurance). The insurance provides compensation to employees who suffer work-related injuries. Here are some basic facts that you need to know about workers' comp insurance in Montana as a business owner and employer.
In most cases, if your Montana business has just one employee, you're required to carry workers' compensation insurance. Montana's Workers' Compensation Act does have a list of roughly two dozen narrow exceptions. A few of the most important exceptions are:
For the full list of exempt employment, check Section 39-71-401 of the Montana Workers' Compensation Act.
Both the Montana Department of Labor & Industry (DLI) and the Montana State Fund play important roles in handling workers' comp claims. Most of the law for WC insurance is contained in Montana's Workers' Compensation Act (Title 39, Chapter 71 of the Montana Code). In addition to the Act, there are also administrative rules that cover workers' compensation in Montana.
In Montana, workers' compensation insurance is available through private insurance companies. If your business is unable to obtain coverage through a private insurer, you can get coverage through the Montana State Fund. There is also an option to self-insure, but this may not be advisable for smaller businesses, in part because it requires that a lot of money be set aside to cover potential claims.
The injured employee must notify you of the injury within 30 days. The notice must include the time and place where the injury occurred and describe the injury. The employee may give you a signed First Report of Injury (FROI) form. As the employer, you or your insurer also are required to complete a FROI form; this may mean completing the employer or insurer section of the FROI provided by the employee. You must complete and file the FROI within six days of getting notice of the injury. File your FROI with the DLI.
The injured employee can choose a doctor for initial treatment. However, your insurer subsequently may choose a different doctor for the employee.
Beyond the initial filing of a FROI, there are subsequent steps to the WC claims process, not covered here.
Your insurer will make a decision about a workers' comp claim within 30 days. If your insurer denies the claim, the employee may choose to contact the DLI to dispute the denial. This will trigger a dispute resolution process. Most disputes first must be handled through DLI mediation, which is a process where an independent mediator tries to work with the employer and employee to reach an agreement. Mediation is informal and confidential.
If mediation doesn't work, you can move on to the state's workers' compensation court for a more formal hearing. Beyond that, you can appeal to the Montana Supreme Court.
If you don't carry workers' compensation insurance you may be required to pay a penalty equal to double what you would have paid in worker's comp insurance premiums with a minimum penalty of $200. You may also be subject to other penalties, costs, fees, and interest, and the state may choose to impose a lien on your business. Many of the penalty rules are contained in Part 5 of Montana's Workers' Compensation Act.
There are many other workers' compensation requirements for Montana employers that are not covered here, such as putting up posters about workers' compensation coverage where employees can see them. For more information, see the Nolo website section on workers' compensation and the Montana Department of Labor & Industry website.