Alaska Workers’ Compensation

• Is Alaska Workers’ Compensation insurance required?
• How does Alaska Workers’ Comp work?
• How much is Workers’ Compensation in Alaska?
• Who is exempt from Alaska Workers’ Compensation?
• How NEXT helps Alaska small business owners

Is Alaska Workers’ Compensation insurance required?

According to the Alaska Department of Labor and Workforce Development, all businesses in Alaska with employees must have workers’ compensation insurance.

Part-time, temporary, family members and friends who are employees must be included in a business’s workers’ comp coverage.

All contracting businesses must make sure their subcontractors have satisfactory workers’ comp insurance.

Other special provisions require that the following groups are also covered with Alaska workers’ comp:

• High school students in work-study programs
• Volunteer emergency medical technicians
• Special public safety officers appointed by the Commissioner of Public Safety
• Members of state boards and commissions
• Volunteer firefighters
• Individuals engaged in civil defense or in a disaster relief function
• Individual members of the Alaska State Defense Force who have been called into active duty

This state does not accept reciprocity policies from other states to fulfill the requirement for workers’ comp. Alaska businesses must be insured by an in-state policy.

A complete list of employee responsibilities can be found in the Employer’s Guide to the Alaska Workers’ Compensation Act.

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How does Alaska Workers’ Comp work?

Workers’ comp insurance can help pay for a number of costs related to workplace injuries for employees, such as:

• Emergency treatment
• Medical bills
• Lost wages
• Death benefits
• Retraining
• Permanent injury

Four categories of workers’ compensation income benefits are available in Alaska:

1. Temporary partial disability: The employee is unable to earn their full regular wage while recovering, but is still able to work in a different and/or reduced capacity.
2. Temporary total disability: The employee is unable to work for a period of time due to their injury.
3. Permanent partial impairment: The employee sustains a permanent impairment and compensation is determined by a doctor’s impairment rating.
4. Permanent total disability: The employee’s injury limits their ability to perform any type of work on a consistent basis.

Additionally, death benefits apply when an employee dies as a result of a work-related injury or illness. This may include coverage for funeral benefits and monthly payments to a spouse and dependents.

If your business fails or refuses to obtain the proper worker’s compensation insurance, it could be served with a stop work order.

A mandatory penalty of $1,000 per day applies if you violate the stop work order. Additional penalties of $10 to $1,000 per employee per day could be added to that fine.

The statute of limitations extends through the previous six years. That means your business could be penalized for lapses in coverage at any time during those six years.

Your business is at serious financial risk if an employee injury occurs while you’re uninsured. The injured worker can file a claim against you and the Alaska Division of Workers’ Compensation Benefits Guaranty Fund.

If the employer fails to pay, this fund covers the injury-related costs and then aggressively pursues full reimbursement from the responsible employer.

Learn more about workers’ compensation coverage.

How much is Workers’ Compensation in Alaska?

Workers’ compensation costs vary across industries. Factors that influence price include:

• The number of employees and the type of work they do.
• Your total payroll.
• Your insurance claims history.
• The locations where you do business.

Get a free instant quote in about 10 minutes from NEXT to see your workers’ comp insurance costs.

Who is exempt from Alaska Workers’ Comp insurance?

Alaska workers’ compensation coverage requirements do not apply to independent contractors and volunteers.

In addition, some business owners are exempt from having to insure themselves, including:

• Sole proprietors of a sole proprietorship.
• Partners in a partnership.
• Members of a limited liability company (LLC) with a minimum 10% ownership interest.
• Executive officers of municipal, religious and legally registered nonprofits.
• Executive officers of for-profit corporations with a minimum 10% ownership interest.

Even if you work for yourself, you might still want workers’ comp for its protection against lost wages and medical bills after a workplace accident. Your personal healthcare insurance might not cover you.

No specific industries are exempt from Alaska workers’ comp, but some exceptions by occupation include:

• Part-time babysitters
• Non-commercial (domestic) cleaning people
• Harvest help and similar part-time/transient help
• Sports officials for amateur events
• Contract entertainers
• Commercial fishers
• Some taxicab drivers
• A participant in the Alaska temporary assistance program engaged in work
• Professional hockey team players and coaches if they’re covered under a health care insurance plan
• Some real estate license holders
• Transportation network company drivers

How NEXT helps Alaska small business owners

NEXT offers an easy way to get a free workers’ compensation insurance quote, purchase coverage and instantly share a certificate of insurance in about 10 minutes.

NEXT strives to resolve every claim quickly. Learn more about our claims process and how our claims advocates will work with you after an employee injury.

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