Building Code Administrators and Inspectors Florida Principle and Practice Licensure Practice Exam

Which statement regarding payment of compensation is correct?

1. An employer/employee agreement for the employee to pay a portion of the premium.

2. An agreement by the employee to waive their right to compensation.

3. The employer may pay the first $2,500 of compensation as a deductible.

4. None of the above.

The correct answer is: The employer may pay the first $2,500 of compensation as a deductible.

The statement that an employer may pay the first $2,500 of compensation as a deductible is accurate in the context of workers' compensation systems in certain situations. This approach can be part of a risk management strategy, where the employer assumes some initial financial responsibility, thereby potentially lowering their overall insurance premiums. By agreeing to pay this initial amount, employers can also carry forward a certain level of control over claims management. This interpretation aligns with common practices in various states, allowing employers flexibility in managing their financial exposure to workplace injuries while still complying with statutory requirements for employee compensation coverage. Essentially, the structure supports a partnership between employers and employees in ensuring that workers receive the necessary compensation while also allowing the employer to manage costs effectively.