What is the Division of Insurance's Role with regard to Workers' Compensation?
The DOI has several responsibilities including the authority to approve or disapprove workers' compensation rates, industrial classifications, rating plans and many sorts of policy forms. The DOI runs the assigned risk pool and appointed the Worker's Compensation Rating and Inspection Bureau (WCRIB) to perform most of the day-to-day operations, such as assigning employers to particular servicing carriers. The Division also regulates self insurance groups, (but not self-insured employers) and workers' compensation preferred provider organizations. In certain instances, we hold hearings on rates, classifications, premiums or other matters involving workers' compensation, including loss reserve.
Self-Insurance Groups
Who Must Have Workers' Compensation Insurance?
Under state law, any person or business that employs workers must purchase workers' compensation insurance to cover their employees except (i) individuals employing people to do work on their own homes, (ii) non-profit corporations with no paid staff, and (iii) corporations in which each employee is an officer/director who owns at least 25% of the corporation and each has given up his/her right to workers' compensation benefits in the state.
Sole proprietors and partners in partnerships are able to buy workers' compensation coverage for themselves as well as for their workers. It remains an option for sole proprietors to purchase (less expensive) workers' compensation policies that will cover only their employees.
What Generally are the Benefits?
There are two kinds of benefits available under workers' compensation. The first replaces some or all wages (pre-injury). The second deals with medical and vocational rehabilitation.
Can an Employee Be Fired if they are Injured on the Job?
Many people injured on the job are able to return to work. Professional vocational rehabilitation workers can help assess the job requirements, the accommodations that might be needed temporarily or for the long term and see what can be done to help.
People with disabilities, whether caused by a work accident or otherwise have certain protections under both federal and state laws. Not everyone will be able to return to their former job with their employer, but many can. Others can return to their former employer in a different job. Others may have to find employment elsewhere if they are no longer able to perform their original duties.
Should an employee lose their job because of their disability, which is possible under certain circumstances, and the employer had 20 or more employees most of the time last year, a federal law called COBRA usually provides for continuation of medical benefits for a limited period of time. Employers should provide information about eligibility and costs.
Can an Insurer Cancel a Policy Mid-Term?
An insurer can cancel a policy mid-term for only three reasons: (i) non-payment of premium, (ii) fraud or material misrepresentation or (iii) a substantial increase in the hazard being insured.
If your insurer canceled your coverage mid-term or elected to non-renew at the end of the policy, the Massachusetts Assigned Risk Pool can provide coverage if two carriers turn you down. The WCRIB manages the pool and will assign the risk to one of a number of carriers which will handle the business, charged at the same rate. However, certain premium discounts may not be available. It's important to remember if the policy was cancelled as the result of non-payment of premium, the Pool will not issue a policy until all payments that are due to the former carrier have been paid.
Employers in the Pool that are threatened with a cancellation that they believe is unjustified, such as a classification dispute, have the right to appeal these within ten days of receiving the notice. The appeal should be directed to the Department of Industrial Accidents.
How to Control the Costs of Premiums.
Ultimately, employers pay the costs of losses to carriers plus the costs of the carriers operating. The more employers can do to control or prevent losses, the less expensive their workers' compensation will be. Employers should take an active interest in matters such as safety, the medical management of claims and early return to work for any injured workers. Employers should also contact the WCRIB to verify that the rate being charged by their insurer for their classification is correct for the upcoming year.
For risks in the assigned risk pool and paying over $5,000.00 a year in premium, check with your agent or broker whether they are able to find voluntary coverage for you. If he or she is successful, you may then be eligible to receive a stock or non-stock premium discount.
Finally, employers in the Pool can get up to 15% premium credits for hiring a Qualified Loss Management firm, to help them contain costs. Your agent can provide you with a list of such firms.
How to Dispute an Audit?
Employers who question whether they are being charged an incorrect amount can submit a written request to the WCRIB asking that it review your case as to the correct application of the rating system. Appeals of the WCRIB review can be sent, in writing, to the DOI within you have 30 (thirty) days.
How to Combat Fraudulent Claims?
Allegations of fraud should be reported to the Insurance Fraud Bureau which has the power to investigate these allegations. Experience modifications may be recalculated when paid workers' compensation claims are later determined to be "non-compensable".
Administrative Judges at the DIA also have the power to make such determinations. Third party claim forms may be obtained from any DIA office.