2023 Indiana Code › Title 22. Labor and Safety › Article 3. Worker's Compensation System › Chapter 5. Worker's Compensation: Insurance Requirements › 22-3-5-5.5. Deductibles and Co-Insurance

Sec. 5.5. (a) Each insurer entering into or issuing an insurance policy under IC 22-3-2 through IC 22-3-7 may, as a part of the policy or as an optional endorsement to the policy, offer deductibles or co-insurance, or both, that are optional to the insured for benefits under IC 22-3-2 through IC 22-3-7. Each insurer may do the following:
(1) Offer deductibles in multiples of five hundred dollars ($500), up to a maximum of five thousand dollars ($5,000) per compensable claim.
(2) Offer co-insurance for each compensable claim. The following apply to co-insurance provided under this subdivision:
(A) The co-insurance must require the insurer to pay eighty percent (80%) and the insured to pay twenty percent (20%) of the amount of benefits due to an employee for an injury compensable under IC 22-3-2 through IC 22-3-7.
(B) An insured employer may not be required to pay more than four thousand two hundred dollars ($4,200) in co-insurance under this subdivision for each compensable claim.
(b) An insurer shall fully disclose in writing to prospective policyholders the deductibles and co-insurance offered under subsection (a). An insured employer who chooses a deductible under subsection (a):
(1) may choose only one (1) deductible amount; and
(2) is liable for the amount of the deductible for benefits paid for each compensable claim of an employee under IC 22-3-2 through IC 22-3-7.
(c) An insurer shall do the following:
(1) Where a policy provides for a deductible, the insurer shall:
(A) pay all or a part of the deductible amount, whichever is applicable to a compensable claim, to the person or medical service provider entitled to the benefits under IC 22-3-2 through IC 22-3-7; and
(B) seek reimbursement from the employer from the applicable deductible.
(2) Where a policy provides a deductible or co-insurance, the insurance company shall pay the full cost of the claim. The insurance company shall seek reimbursement from the insured employer for its portion of the liability following closing of the claim or when twenty percent (20%) of the benefits paid exceed four thousand two hundred dollars ($4,200).
(d) The payment or nonpayment of a deductible or co-insurance amount by an insured employer to the insurer shall be treated under the policy insuring the liability for worker's compensation in the same manner as payment or nonpayment of premiums is treated.
(e) The premium reduction for deductibles or for co-insurance shall be determined before the application of any experience modifications, premium surcharges, or premium discounts. The applicable premium reduction percentage is the percentage corresponding to the appropriate deductible or co-insurance amount. The premium reduction is obtained by the application of the appropriate reduction percentage, shown under miscellaneous values in the rate pages, to the premium determined before application of any experience or schedule modification, premium discounts, or any retrospective rating plan.
(f) This section does not apply to the following:
(1) An employer that is authorized to self-insure against liability for claims under IC 22-3-2 through IC 22-3-6.
(2) Group self-insurance funds for claims under IC 22-3-2 through IC 22-3-6.
(g) A deductible or co-insurance provided under this section applies against the total of all benefits paid for a compensable claim, including benefits paid under the following:
(1) IC 22-3-3-4.
(2) IC 22-3-3-8 through IC 22-3-3-10.
(3) IC 22-3-3-17.
(4) IC 22-3-3-22.
(h) An employer may not use the employer's election of a deductible or co-insurance under this section or the payment of a deductible or co-insurance under this section in negotiating with the employer's employees on any terms of employment. An employee of an employer that knowingly violates this subsection may file a complaint with the department of labor. The department of labor may impose a civil penalty of not more than one thousand dollars ($1,000) against an employer that knowingly violates this subsection.
(i) This subsection applies to an employee of an employer that has paid a deductible or co-insurance under this section and to the employee's dependents. If an employee or a dependent recovers damages against a third party under IC 22-3-2-13, the insurer shall provide reimbursement to the insured equal to a pro-rata share of the net recovery by the insurer.
As added by P.L.170-1991, SEC.15. Amended by P.L.275-2013, SEC.10.