Workers’ Comp Rates for Home Health Care Workers 2024
In 2024, the typical workers’ comp rate for a home health care worker making $13.80/hour is $42 a month, or $1.77 per $100 of payroll, plus additional taxes and fees. Workers' compensation insurance for home health care workers provides coverage for work-related injuries and illnesses.
Your exact premium will depend on your state, payroll size, and claims history. In this article, we’ll guide you through calculating your premium and provide tips on how to get the lowest rates.
What are Workers' Comp Premiums for Home Health Care based on?
Here are the factors that influence your premium:
Your Industry
The cost of workers’ comp insurance varies by industry based on the level of risk in your type of work.
The National Council on Compensation Insurance (NCCI) categorizes every job and its level of risk. Each job type or industry is given a 4 digit unique class code, like a barcode, so others can easily reference it.
For home health care, the common code is 8835, though some states like Pennsylvania use different codes. For more details, see our guide on workers’ comp class codes for home health care.
Industries that are prone to higher instances of work-related injuries—like construction or manufacturing—tend to have higher workers' comp rates compared to those with lower risk profiles, such as office-based businesses.
Here's how home health care rates stack up against rates in other industries:
Workers’ Compensation Rates by Industry
Your Payroll
Workers' comp premiums are calculated according to payroll, usually expressed as a rate per $100 of payroll. Higher payrolls mean higher premiums because there is a higher potential for injury.
Your Claims History
Your claims history is another important factor in determining your workers' comp premium. If your home health care agency has a history of injuries and accidents, your premiums could be higher due to increased medical expenses.
However, if you're new to the industry, you won't have a claims history, and it won't be considered until you have a few years of records. Keep in mind that reducing claims can lower your premiums over time.
How are Workers' Comp Premiums for Home Health Care Workers calculated?
Use this formula to estimate your premium:
Payroll divided by 100 x rate = Premium
Calculate Payroll
Determine the total amount of money paid to your employees throughout the year. Make sure to include all your employees in your total payroll figures.
Divide the payroll figure by 100 to obtain the Payroll Per $100. This is how much insurance you have to pay for every $100 of payroll.
If you don’t know the annual payroll, take the hourly rate of each employee and multiply it by the hours they work per week and weeks they work per year to get the estimated annual payroll.
Find the Rates
Find the industry Rate for your state. Use the national average for Class Code 8835 ($1.77) or refer to specific state rates listed below.
Workers’ Comp Rates for Home Health Care by State per $100 of Payroll
- Alabama: $2.18
- Arkansas: $0.88
- Connecticut: $1.99
- Florida: $1.53
- Georgia: $1.73
- Louisiana: $1.42
- Massachusetts: 2.12
- Maine: $1.77
- Maryland: $1.40
- Mississippi: $1.93
- Missouri: $2.43
- North Carolina: $1.51
- Pennsylvania: $2.37
- Rhode Island: $2.86
- Tennessee: $1.56
- Virginia: $1.31
Apply the Formula
Apply the formula separately for each class code, then combine the results for the total premium.
Example Calculation:
Suppose you own a home health care agency in North Carolina with 50 part-time aides and 2 clerical workers.
This staff needs to be protected by a Home Health Care Workers’ Compensation Insurance policy that you as the employer pay for and provide. Let’s consult the formula and follow it to figure out your premium.
Payroll divided by 100 x rate = Premium
Step 1: Calculate Payroll
Calculate the yearly payroll for each employee.
- Aides' Payroll: The aides are making $14 an hour. They usually work 30 hours a week. Multiply the hours by the weeks and get $21,840.
Then multiply by all the employees in this category. 50 aides x $21,840 each = $1,092,000
- Clerical Workers' Payroll: The clerical workers are making $19.50 an hour. They usually work 40 hours a week. Multiply the hours by the weeks and get $40,642.
Then multiply by all the employees in this category. 2 workers x $40,642 each = $81,284
Step 2: Find the Rates
Based on what type of work each employee does, figure out which class code they belong in and what the rate is for your state.
- The Aides would be in class code 8835 with North Carolina’s rate of $1.77.
- The Clerical employees would be classified as 8810 with North Carolina’s rate of $0.09.
Step 3: Apply the Formula
This is how it all comes together. We have to do each class code separately. Let’s start with the aides first.
- Aides Premium Calculation: $1,092,000 (payroll) ÷ 100 x $1.77 (rate) = $19,328
- Clerical Workers' Premium Calculation: $81,284 (payroll) ÷ 100 x $0.09 (rate) = $73
Combined Total Premium: $19,328 + $73 = $19,401 (excluding additional taxes and fees).
Remember that the actual premium may vary depending on factors such as your agency's experience modification number, specific state regulations, and any discounts provided by your insurance carrier.
Annual Cost of Workers' Comp for 8835 Home Health Aides
To get a sense of what workers’ comp will cost you per aide, here is the average premium for a part-time aide (30 hours a week) by state.
2024 Annual Home Health Care Workers' Comp Costs Per Employee
Does it matter where I buy a Policy?
When searching for workers' compensation insurance for your home health care agency, you might wonder if the choice of provider really matters. The answer is yes, it does matter, and it's about more than just finding the cheapest option.
As an agency owner, you need a policy that offers the right coverage for your business. More importantly, you need a reliable company that will support your employees if they get injured and need to make a claim, helping them recover and return to work.
Here are some key factors to consider when selecting an insurance provider:
Reputation
Choose a provider with a strong reputation for efficiently handling workers' comp claims. This ensures your employees get the necessary support in case of an injury.
Financial Strength
Select a company with solid financial stability to ensure they can pay out claims when they happen.
Customer Service
Reliable customer service is essential when dealing with insurance claims. Look for a company that is responsive and helpful in addressing any issues.
Industry Expertise
Insurance providers with experience in the health care sector are better equipped to offer appropriate coverage and manage claims specific to your industry.
Benefits of Workers' Comp
- Medical Expenses: Covers all medical costs for work-related injuries or illnesses
- Lost Wages: Compensates employees for lost income during recovery
- Death Benefits: Provides financial support for the family in case of an employee's death due to work-related incidents
- Lawsuit Protection: Shields your business from legal actions related to work injuries
Strategies to lower Workers' Comp Premiums
Implement a Safety Program
A quick way to reduce your workers' comp premium is by implementing a safety program in your agency. If you tell your insurance company that you’ve implemented a safety program, they are likely to give you a discount.
Some key components of a safety program for home health care workers are:
- Pre-Inspection of Homes: Ensure the environment is safe and not cluttered. Avoiding homes of hoarders can significantly reduce the risk of accidents.
- Proper Training in Lifting: Provide thorough training for home health aides and nurses on correct lifting techniques to prevent injuries.
- Checking MVRs (Motor Vehicle Records): If there’s a driving exposure, ensure employees have clean driving records with no more than two moving violations.
- Combative Patient Training: Equip your staff with the skills to handle combative patients safely and effectively.
Ask about Premium Discounts
Some companies offer credits for maintaining a safe work environment or having a strong claims history. Be proactive and ask if your agency is eligible for these discounts.
Reduce Claims
Lowering your agency’s claims history (experience modification rate or ExMod) is another way to reduce workers' comp rates. This is more of a long-term strategy but well worth it. By effectively managing and preventing incidents among your workers, you can lower your ExMod and save on premium costs.
Get an accurate Estimate
Do you want a more precise estimate of workers' comp costs for your home health care business? Use our online quoter.
Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.
Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.
