[CA] [CA] When does a company need to get work comp insurance?
When does a mental health group practice need to get workers’ comp insurance?
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A mental health group practice must obtain workers’ compensation insurance if it employs individuals who are considered employees under California law.
According to California Labor Code Section 3700, every employer must secure the payment of workers’ compensation benefits by either purchasing third-party insurance or obtaining a certificate of consent to self-insure from the Director of Industrial Relations (Denny’s Inc. v. Workers’ Comp. Appeals Bd., 104 Cal.App.4th 1433 (2003)).
This requirement applies to all employers, including mental health group practices, regardless of the nature of their business.
Definition of Employee
Under California law, an employee is defined broadly to include any person in service of an employer under any appointment or contract of hire (State Farm Fire and Cas. Co. v. W.C.A.B., 16 Cal.4th 1187 (1997)). This includes individuals working in mental health group practices. Therefore, if your practice hires anyone to perform duties related to the practice, it must secure workers’ compensation insurance for them.
Self-Insurance Option
A practice may self-insure if it demonstrates the financial ability to pay compensation that may become due to employees. Self-insured employers must obtain a certificate of consent to self-insure from the Director of Industrial Relations and comply with all applicable regulations (California Ins. Guarantee Assn. v. San Diego County Schools Risk Management, 41 Cal.App.5th 640 (2019)).
Special Considerations for Group Practices
If your practice operates as part of a larger entity or in conjunction with other employers, ensure that workers’ compensation coverage extends to all employees. Some entities may need excess coverage depending on structure.
Exemptions
Certain limited exemptions apply (for example, referral agencies meeting statutory requirements), but they generally do not apply to mental health practices.
Summary:
A mental health group practice in California must obtain workers’ compensation insurance once it employs anyone classified as an employee. This can be achieved through either purchasing a policy or self-insuring if qualified.
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Full Conversation
When does a mental health group practice need to get workers’ comp insurance?
I understand the importance of ensuring proper insurance coverage for your mental health group practice. Are you currently operating in a specific state or region?
CA, and I’m the only person seeing clients. I’ll have a new W-2 employee this month.
How many employees, including yourself, are currently working at the mental health group practice?
I am a clinician, but I am not on payroll.
Is there anything else the employment lawyer should know before I connect you? Rest assured they’ll be able to help with workers’ comp insurance.
No
Greetings, my name is Esquire Champ.
A mental health group practice must obtain workers’ compensation insurance if it employs individuals who are considered employees under California law.
According to California Labor Code Section 3700, every employer must secure the payment of workers’ compensation benefits by either purchasing third-party insurance or obtaining a certificate of consent to self-insure from the Director of Industrial Relations (Denny’s Inc. v. Workers’ Comp. Appeals Bd., 104 Cal.App.4th 1433 (2003)).
This requirement applies to all employers, including mental health group practices, regardless of the nature of their business.
Definition of Employee
Under California law, an employee is defined broadly to include any person in service of an employer under any appointment or contract of hire (State Farm Fire and Cas. Co. v. W.C.A.B., 16 Cal.4th 1187 (1997)). This includes individuals working in mental health group practices. Therefore, if your practice hires anyone to perform duties related to the practice, it must secure workers’ compensation insurance for them.
Self-Insurance Option
A practice may self-insure if it demonstrates the financial ability to pay compensation that may become due to employees. Self-insured employers must obtain a certificate of consent to self-insure from the Director of Industrial Relations and comply with all applicable regulations (California Ins. Guarantee Assn. v. San Diego County Schools Risk Management, 41 Cal.App.5th 640 (2019)).
Special Considerations for Group Practices
If your practice operates as part of a larger entity or in conjunction with other employers, ensure that workers’ compensation coverage extends to all employees. Some entities may need excess coverage depending on structure.
Exemptions
Certain limited exemptions apply (for example, referral agencies meeting statutory requirements), but they generally do not apply to mental health practices.
Summary:
A mental health group practice in California must obtain workers’ compensation insurance once it employs anyone classified as an employee. This can be achieved through either purchasing a policy or self-insuring if qualified.
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