What are the legal requirements for workers’ comp in Iowa?

Iowa employees are covered by the Iowa workers’ compensation law under most employment relationships. Correspondingly, most business owners required by law to purchase workers’ compensation liability insurance. A procedure exists that permits employers to apply to the Iowa Insurance Commissioner to become certified to self-insured rather than purchase insurance.

Criminal and civil penalties can be imposed on Iowa business owners who violate the mandatory insurance law. Employers who operate without workers’ comp insurance illegally lose the exclusive remedy protection of the workers’ compensation law and are liable to the employee for the full measure of damages available under tort law if an injured employee sues the employer in court.

Sole proprietors, partners in a partnership, and members of a limited liability company that have a status other than of an employee and are not covered by Iowa workers’ compensation law. However, they may, elect to be covered by purchasing insurance that expressly covers them. Persons who are bona fide independent contractors are not employees. However, a contract that designates a person to be an independent contractor does not make the person an independent contractor if the person functions as an employee. 85.18 IA Code.

Iowa law contains a number of exemptions that make specified employees and their employers exempt from workers’ compensation coverage (85.1 IA Code). Persons eligible to receive compensation under federal law are exempt. In general, limited exemptions exist for persons employed in agriculture or by a relative. Limited exemptions exist when the employment is casual and is not performed for purposes of the employer’s trade or business or if the employee’s services are performed in or about the employer’s dwelling. Some of the exemptions apply only if the employee’s earnings from the employer are less than $1,500 annually. Business owners may elect to cover some classes of exempt employees by purchasing an insurance policy the specifically includes those employees. Specific guidance on exemptions and electing coverage can be obtained from a Workers’ Compensation Compliance Administrator.

What types of injuries are covered with workers’ comp insurance in Iowa?

Iowa state law determines what types of injuries are covered by workers’ comp insurance, but there are general guidelines that can help you understand what typically qualifies for a workers’ comp claim.

These include:

• No intentional self-harm, harm that results from drug or alcohol use, or fighting. 
• Must fall within the “course and scope” of employment. If you get into a fender bender on your way home from work after you’ve clocked out for the day, that’s unlikely to qualify.  
• Long-term occupational injuries, including back strain from repetitive motion. When you think of work-related injuries, you probably think of one-time events — but damage can occur over a long period of time. As long as the injury or illness is clearly associated with the employee’s work responsibilities, it may be eligible.