Key Takeaways
- Arizona workers' compensation is MANDATORY for most employers - unlike Texas which is voluntary
- Employers must secure coverage through insurance, self-insurance, or a pool
- The Industrial Commission of Arizona (ICA) administers the workers' compensation system
- Workers' compensation is the exclusive remedy for workplace injuries (with limited exceptions)
- Benefits include medical care, temporary disability, permanent disability, and death benefits
Arizona Workers' Compensation Insurance
Arizona requires mandatory workers' compensation insurance for most employers—unlike Texas where it is voluntary.
Mandatory Coverage
Arizona workers' compensation is mandatory for most employers:
Who Must Carry Coverage
| Employer Type | Coverage Required |
|---|---|
| Private employers | Yes - mandatory |
| State/local government | Yes |
| Domestic workers | Some exemptions |
| Agricultural workers | Some exemptions |
| Sole proprietors | Optional for themselves |
| Partners | Optional for themselves |
Exam Tip: Arizona is different from Texas—Arizona REQUIRES workers' compensation for private employers. Texas is the only state where it's voluntary.
Coverage Options
| Option | Description |
|---|---|
| Private Insurance | Purchase from admitted insurer |
| Self-Insurance | With ICA approval (large employers) |
| Workers' Comp Pool | For hard-to-place risks |
| State Compensation Fund | SCF Arizona (competitive market) |
Industrial Commission of Arizona (ICA)
The Industrial Commission of Arizona (ICA) administers workers' compensation:
ICA Functions
- Oversee workers' comp system
- Adjudicate disputed claims
- Approve self-insurance
- Enforce compliance
- Set procedural rules
- Maintain injured worker protections
Claims Division
- Processes claims
- Resolves disputes
- Administrative law judges hear contested cases
- Appeals go to Court of Appeals
Exclusive Remedy
Workers' compensation provides the exclusive remedy for workplace injuries:
What This Means
| Feature | Details |
|---|---|
| No Lawsuits | Employees cannot sue employer for negligence |
| Trade-Off | Guaranteed benefits for giving up right to sue |
| Exceptions | Intentional harm, third-party liability |
| Benefits | Medical, disability, death |
Exceptions to Exclusive Remedy
- Employer intentionally caused injury
- Injury by third party (can sue third party)
- Dual capacity doctrine (limited)
Benefits
Arizona workers' compensation provides these benefits:
Benefit Types
| Benefit | Description |
|---|---|
| Medical Care | All reasonable and necessary treatment |
| Temporary Total Disability (TTD) | 66 2/3% of average monthly wage |
| Temporary Partial Disability | Wage differential benefits |
| Permanent Partial Disability | Based on impairment rating |
| Permanent Total Disability | Ongoing benefits |
| Death Benefits | To dependents |
| Supportive Care | For permanent conditions |
Benefit Calculations
- TTD: 66 2/3% of average monthly wage
- Maximum weekly benefit set by ICA annually
- 7-day waiting period for income benefits (retroactive after 14 days)
- Medical benefits have no limit
Penalties for Non-Compliance
Employers who fail to carry required coverage face:
| Penalty | Details |
|---|---|
| Civil Penalty | Up to $10,000 |
| Criminal Penalty | Class 6 felony |
| Personal Liability | Owner personally liable for claims |
| Work Stoppage | ICA can order work stopped |
Exam Tip: Arizona takes workers' comp compliance seriously. Uninsured employers face civil and criminal penalties.
Is workers' compensation insurance mandatory for private employers in Arizona?
Which agency administers Arizona's workers' compensation system?
What is the temporary total disability (TTD) benefit rate in Arizona?