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Workers’ Compensation for Out-of-State Public Entity Employees

  

With some public entities planning to retain their remote work policies even after the pandemic, one previously rare working arrangement is being considered more often: public entity employees working from an entirely different state. This situation can generate some unique issues for both public entities and pools — particularly when it comes to workers’ compensation coverage.

Most pools offering workers’ compensation coverage do so only in their own state, both as a matter of historical need and because of regulatory or statutory restrictions. Each state also has its own statutory workers’ compensation benefits and requirements, including in some cases mandatory workers’ compensation programs that don’t allow insurance from other sources.

Given these factors, your pool may not be in a position to offer coverage for public entity employees in other states, even if they are employed by one of your member entities. As a result, you may need to help your members identify alternative coverage solutions. 

For example, one AGRiP member pool has helped its member entities enroll out-of-state employees into the state’s assigned risk program. Another pool advises its members about (a) how temporary out-of-state assignments impact currently provided workers’ compensation coverage and (b) related impacts of requiring out-of-state remote employees to return to their “home” state on a regular basis. Others are still investigating solutions, recognizing that, while the demand for such coverage may be limited, so too are the options.

The challenges associated with out-of-state workers go beyond workers’ compensation coverage. Pools are also advising member public entities on issues like:

  • Whether the entity’s payroll provider can accommodate multi-state payments and which state’s payroll taxes will apply
  • Disability, sick and unpaid leave policies (which are typically based on state law)
  • Unemployment eligibility for out-of-state workers
  • The impact on an employee’s state retirement benefits if working in another state
  • Health care options (network benefits) for employees working in other states
  • Updating travel reimbursement policies for out-of-state employees traveling back to the home state for meetings 
  • Other changes to the public entity’s business practices such as core hours, employee availability for meetings, etc.

If your pool is exploring workers’ compensation or other solutions for public entity employees working out-of-state, or if you have related input, please let us know so we can continue to share information among pools.

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Ann Gergen is AGRiP’s executive director and a former pool administrator. She has worked closely with and for pools, public entities, reinsurers and related service providers throughout her career.

Published June 8, 2021.

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