The Workers' Compensation Special Fund (hereinafter, "the Special Fund") and the Workers' Compensation Trust Fund (hereinafter, "the Trust Fund") were established to fund the operating expenses for the Massachusetts Department of Industrial Accidents (DIA) and to pay or reimburse certain compensation to employees and insurance companies specifically outlined in § 65. Both the Special Fund and the Trust Fund are funded by revenues generated from assessments levied on all insured employers subject to MGL c. 152.
According to the statute, insurance companies shall bill and collect assessments on insured employers. Such assessments shall be separately stated amounts on premium notices, and shall not be reported as premiums for any tax or regulatory purposes under Chapters sixty-three, one hundred and seventy-five, or any other law. Assessment rates for insured employers shall apply to standard premiums for policy years beginning on or after July first following the determination of such rates.
As noted above, on an annual basis, assessment rates are determined using the procedures outlined in MGL c. 152, § 65(4). This process occurs in the April to June timeframe and the assessment rate change, if applicable, is communicated to the insurance companies. The DIA uses the Workers' Compensation Rating and Inspection Bureau of Massachusetts to communicate the assessment rate changes, via Circular Letter, which is issued in July. The assessment rate changes are to be applied to the policies effective July 1 of that year and thereafter or until notification of new rates are issued the following year.
All insurance companies in the Commonwealth of Massachusetts that are licensed to write workers' compensation insurance must report and remit all collected assessments to the DIA on a quarterly basis. Currently, to assist companies in complying with this regulation, the DIA mails a blank assessment form. The blank forms are mailed the first week in January, April, July and October. Insurance companies are requested to complete the forms and remit the assessment to the Commonwealth within thirty (30) days, otherwise a 5% penalty is assessable.
All insurance companies are expected to be familiar with the insurance laws of each state, in which they operate; and the DIA anticipates that this communication as well as this website will provide an informational tool to help insurance companies understand their obligations.