Georgia's Made Whole Law: Protection For Uninsured 1099 Workers

does ga made whole law apply to uninsured 1099 worker

The made whole doctrine in Georgia provides that, Where the insurer or the insured must go unpaid to some extent, the loss should be borne by the insurer, since the insurer has already been paid a premium for assuming this risk and would have been obligated to pay medical expenses regardless of its insured’s negligence and regardless of whether a culpable third party could have been found.

In Georgia, the made whole doctrine is codified in the context of payments for medical expenses or disability benefits, prohibiting subrogation by an insurer against a tortfeasor to recover medical expenses or disability payments paid to or on behalf of an insured.

In the context of workers' compensation, Georgia's Workers' Compensation Act defines the responsibility of the employer to provide prompt medical and disability benefits for injuries sustained on the job by workers, resulting in partial or total incapacity or death. In return, the employer is shielded from tort liability for these injuries.

Every employer, individual, firm, association, or corporation, regularly employing three or more persons, part-time or full time, shall provide workers’ compensation insurance coverage.

In Georgia, a 1099 worker is not considered a true employee by the Internal Revenue Service (IRS). Some states also do not consider 1099 workers actual employees of the company.

If you are an employer that has 1099 employees, you might be wondering whether you should offer health insurance to these workers. While you are not legally required to do so, you do have the option to provide benefits if you choose.

If you are considering self-employed health insurance, there are a few factors to consider.

Characteristics Values
--- ---
Does the "made whole" law apply to uninsured 1099 workers? No
Does the "made whole" law apply to insured 1099 workers? Yes
Does the "made whole" law apply to insured W-2 workers? Yes
Does the "made whole" law apply to uninsured W-2 workers? No
Does the "made whole" law apply to workers' compensation? Yes

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The made whole doctrine in Georgia and how it applies to uninsured 1099 workers

The "made whole" doctrine in Georgia is a legal rule that states an injured plaintiff must receive compensation for all losses before any third parties can seek reimbursement for what they have covered. This is codified in Georgia law O.C.G.A. § 33-24-56.1, which applies to all health insurers, disability plans, PPOs, HMOs, healthcare providers, or lost wage providers.

The "made whole" doctrine is especially valuable in Georgia because it is codified in law, unlike in many other states. This means that insurance companies cannot seek reimbursement from a plaintiff's recovery unless the injured party has been fully compensated for their losses.

The doctrine protects the rights of injured individuals whose losses exceed what initial payments from insurers or other sources covered. It prevents third parties like insurance companies from prioritising their reimbursement over the plaintiff's right to be fully made whole first.

However, this does not apply to all health insurance. The majority of health insurance in the US is provided by private employers, and the majority of those plans are regulated by Federal law, known as the Employee Retirement Income and Security Act (ERISA). In these cases, state law does not apply.

In the case of an uninsured 1099 worker, the "made whole" doctrine would not apply if their insurance was provided by their employer and was regulated by ERISA. If their insurance was not provided by their employer, and was instead a "multiple-employer plan", then state law would apply, and the "made whole" doctrine would be relevant.

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The made whole doctrine in Georgia and how it applies to insured 1099 workers

The made whole doctrine in Georgia is a legal rule that states an injured plaintiff must receive compensation for all losses before any third parties can seek reimbursement for what they have covered. This includes all losses before health insurers can seek repayment of what they have already covered. The doctrine applies to all health insurers, disability plans, PPOs, HMOs, healthcare providers, or lost wage providers that provide insurance to a group or individual in the state.

The made whole doctrine protects the rights of injured individuals whose losses exceed what initial payments from insurers or other sources covered. It prevents third parties like insurance companies from prioritising their reimbursement over the plaintiff's right to be fully made whole first.

In the context of payments for medical expenses or disability benefits, Georgia has prohibited subrogation by an insurer against a tortfeasor to recover medical expenses or disability payments paid to or on behalf of an insured.

The made whole doctrine does not apply to a commercial property insurance contract that expressly authorises an insurer to pursue its subrogation rights after compensating the insured for damage to its property.

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The difference between 1099 and standard employees

A 1099 worker is a self-employed individual who provides services to a company under a contract. They are also known as independent contractors, freelancers, or consultants. They are responsible for paying their own taxes and are not entitled to the same benefits as standard employees. 1099 workers are usually hired for a specific project or a limited amount of time.

On the other hand, standard employees, also known as W-2 employees, are hired by a business under an employment agreement. The business withholds taxes from their wages, provides training, and may offer benefits such as health insurance, retirement plans, and paid time off. Standard employees often work full-time or part-time hours and receive a standard range of benefits.

The main distinction between 1099 and standard employees lies in their employment status and the tax forms they are required to fill. 1099 workers receive a 1099-MISC form, which reports their earnings for the year, while standard employees receive a W-2 form that details their wages and taxes withheld.

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The importance of health insurance for 1099 employees

Health insurance is important for 1099 employees, who are independent contractors, for several reasons. Firstly, it provides financial protection against unexpected medical expenses, including doctor visits, hospital stays, surgeries, and prescription medications. Without insurance, individuals may face significant out-of-pocket costs, which can lead to financial strain or even bankruptcy. Secondly, health insurance ensures access to necessary healthcare services and treatments. With coverage in place, 1099 employees can seek timely medical care, preventive screenings, and treatments for chronic conditions, helping them maintain their health and well-being. Thirdly, health insurance often covers preventive services, such as annual check-ups, vaccinations, and screenings for conditions like cancer and diabetes. These preventive measures can help detect health issues early, leading to better health outcomes and reduced healthcare costs over time. Lastly, health insurance provides peace of mind, knowing that you and your family are protected against unforeseen medical emergencies or illnesses. It eliminates the worry of being unable to afford necessary medical care and allows individuals to focus on their work and personal lives without the stress of healthcare costs.

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The rules and requirements for offering benefits to 1099 employees

While 1099 workers are not considered "true employees" by the Internal Revenue Service (IRS), businesses are increasingly relying on them to meet their operational needs. As such, businesses may want to offer 1099 workers benefits to attract and retain top talent. However, there are no legal requirements for businesses to provide benefits to 1099 workers.

If a business chooses to offer benefits to 1099 workers, there are specific rules that both the employer and contractor must follow. Firstly, the contractor may need to declare any employer contributions to their benefits as taxable income. Secondly, employers may offer contractors access to the same group plan as employees, regardless of who pays the premiums. Lastly, employers are not required to pay any portion of the premiums for contractors.

  • Health insurance, dental and vision coverage
  • Access to retirement savings plans
  • Educational resources
  • Travel and corporate discounts
  • Voluntary worker-paid benefits

Frequently asked questions

The "made whole" doctrine provides that, "Where the insurer or the insured must go unpaid to some extent, the loss should be borne by the insurer, since the insurer has already been paid a premium for assuming this risk and would have been obligated to pay medical expenses regardless of its insured’s negligence and regardless of whether a culpable third party could have been found."

Workers' compensation is an accident insurance program paid by your employer which may provide you with medical, rehabilitation and income benefits if you are injured on the job. These benefits are provided to help you return to work. It also provides benefits to your dependents if you die as a result of a job-related injury.

The term "1099 employee" usually refers to workers that are self-employed or operate as independent contractors. They are not considered true employees by the Internal Revenue Service (IRS). Some states also do not consider 1099 workers actual employees to the company.

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