Workers' comp in Alaska | Pie Insurance

Alaska workers’ comp 101

In today’s world, it’s important to be protected from any potential medical mishaps or accidents. In Alaska, there are plenty of requirements in place to protect your employees and small business.

Workers’ compensation is a no-fault insurance system that protects both you and your employees from any illnesses or injuries sustained on the job. This type of coverage protects you from civil liability meaning an injured worker can’t sue you for work-related injuries if you carry workers’ comp insurance.

All employers in Alaska are required to carry workers’ compensation insurance. Carrying insurance is mandatory under the Alaska Workers’ Compensation Act.

The only case in which you wouldn’t be required by the Alaska Workers’ Compensation Act to carry workers’ comp coverage is if you’re a self-insured employer.

Read on to learn what’s required of you as an Alaskan employer and how to protect your business and employees from any accidents that may occur on the job.

What do Alaska small business owners need to know about workers’ compensation?

According to the Employer’s Guide to the Alaska Workers’ Compensation Act, an employee is defined as an individual who is not an independent contractor and who is employed under a hiring contract. An employee must meet all of the necessary criteria outlined in the Alaska Workers’ Compensation Act to be considered an independent contractor.

Family, friends, and volunteers are not exempt from workers’ compensation coverage. Any person who is employed by an employer and is not legally named as an owner of the business with adequate ownership interest must be insured.

There are also no exemptions for part-time or temporary employees. No matter the number of days or hours worked, all employees must be covered with workers’ comp.

Alaska does not have a state workers’ compensation insurance plan. Unless an employer’s business is approved to maintain self-insurance, businesses are required to purchase workers’ comp insurance. This can be done via private commercial insurance carriers that are specifically authorized to write workers’ comp insurance policies in the state of Alaska.

9 essential facts about workers’ comp insurance in Alaska

1. 1. Employers can be assessed penalties of up to $1,000 per employee for each day they’re uninsured.
   2. Employers will be assessed a mandatory $1,000 per day for violating stop-work orders.
   3. Sole proprietors and partners in Alaska aren’t legally required to carry workers’ comp insurance if they’re the only individuals working for the business. In these cases, sole proprietors can “opt-in” if they’d like to insure themselves.
   4. LLC members and corporate directors and officers are automatically exempt if they obtain a minimum 10% ownership interest in the business. LLC members and corporate directors and officers with less than 10% ownership interest are considered employees and must be insured with workers’ comp.
   5. Employers aren’t allowed to charge employees for any amount of workers’ compensation premiums. It’s a misdemeanor crime to do so.
   6. Employees aren’t allowed to waive their workers’ compensation benefits. Any verbal or written agreements to do so are invalid.
   7. Non-profits aren’t exempt from maintaining workers’ comp coverage.
   8. Executive officers and directors of nonprofits are exempt. Executive officer defined: “the president, vice president, secretary, treasurer or a corporate employee who is responsible for the corporation’s affairs generally, has a close connection with the board of directors and other officers and who is specifically designated as an executive officer by the articles of incorporation or corporation bylaws.”
   9. Employers should read the Employer’s Guide to the Alaska Workers’ Compensation Act for all frequently asked questions regarding workers’ compensation coverage for their Alaska business. This is a resource for protecting employees and maintaining coverage.

Curious about Alaska workers’ comp rates?

Remember, every situation is different. Alaska workers’ compensation laws are subject to change, so be sure to research and speak with a trusted advisor.

Please note that this content is intended for educational purposes only. As laws change regularly, refer to your state legislation or an advisor for specific legal counsel. If you’re a small business owner, learn more about the basics of workers’ comp or check your current rate in 3 minutes.