The Department of industrial Accidents (DIA) administer three separate budgets which are funded entirely by assessments on workers' compensation policies, fines for various infractions against the Workers' Compensation Act (MGL c. 152) and fees collected by the agency, as follows:
- Assessments - A charge leveled against all companies in Massachusetts on their workers' compensation policy;
- Referral fees - A fee paid by the insurer when a case cannot be resolved at the Conciliation level and is referred up to Dispute Resolution for adjudication. The current referral fee is $839.63, as of October 1, 2016. this fee is 65% of the State Average Weekly wage, which is $1,291.74. (This figure changes every October 1st.);
- Fines - There are three types of fines. first a Stop Work Order Fine is issued to a company without insurance, and it accumulates until they obtain a policy. Second, a late First Report fine is issued to a company if an injury is not reported within the specified time. This amount is $100. Third, a 5% fine is charged when assessments are paid later than 30days of billing.
There are no tax dollars used to fund the Department of Industrial Accidents or any of its activities.
- The Special Fund is the account that funds the operating budget of the DIA and is appropriated from the General Fund by the Legislature.
- The Department of Industrial Accidents reimburses the full amount of its budget appropriation plus fringe benefits and indirect costs from the assessment, fines, and fees collected. Payments are made quarterly. Therefore, the net cost of the General Fund is $ 0.
- The Workers' Compensation Trust Fund is the second fund administered by the DIA. this fund was established to pay workers' compensation benefits to injured workers whose employer failed to carry the appropriate insurance. This fund also reimburses insurers for Cost of Living Adjustments, second injury claims, and latency claims. This fund is not subject to appropriation.
- The Public Trust Fund is utilized to pay Cost of Living Adjustments paid to public employees who are collecting workers' compensation benefits. This fund is not subject to appropriation.
- Money left in the Special Fund at the end of the fiscal year in excess of 35% of the previous year's expenditures is factored in when figuring the assessment rate for the next fiscal year. The Department's actuary performs this calculation.
- The programmed 35% overage is intended for use in a crisis situation where the well-being of the workers' compensation system is at stake, or for a capital expenditure that enhances the system. It is with the approval of eh Workes' Compensation Advisory Council that the Department is allowed to access and use the monies accumulated in the Special Fund.
- These monies have been accessed only once by the DIA. On that occasion, the funds were accessed in order to upgrade the DIA's database and computer networking system. The database being replaced was first installed in 1987.