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Workers Compensation Insurance

The Division of Insurance (DOI) has broad authority to regulate insurance companies who write workers' compensation insurance. However, the Division does not oversee relationships between insurance companies and individual injured workers. Disputes over claims for benefits by employees, health care providers or others, are handled by the Department of Industrial Accidents. 

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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. We also run the assigned risk pool, although we have 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. In certain instances we hold hearings on rates, classifications, premiums or other matters involving workers' compensation, including loss reserve.

Who Has to Have Workers' Compensation Insurance?

Any person or business that employs workers must purchase workers' compensation insurance 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.

There are two kinds of benefits available under workers' compensation. The first replaces some or all of an employee's pre-injury wage. The second deals with their medical and vocational rehabilitation.

People with disabilities, whether caused by a work accident or otherwise have certain protections under both federal and state laws. 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. 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. Depending on the duties of the job, a few may have to find employment elsewhere. 

Should an employee lose their job because of a 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 employees with information about eligibility and costs.

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. Those choosing to incorporate now have the option to waive all their rights to coverage under the workers' compensation laws if they own 25% of the corporation. 

Can an Insurer Cancel My Policy in 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 at the end of the policy, your agent can apply to the Massachusetts Assigned Risk Pool for coverage if two carriers turn you down. The WCRIB, who manages the pool, will then assign you to one of a number of carriers which will handle your business just as if it were covering your losses itself and you will be charged at the same rate. However, certain premium discounts might not be available to you. It's important to remember, though, that if your cancellation was the result of non-payment of premium, the Pool will not issue a policy until you have made all payments that are due to your former carrier. 

Employers in the Pool that are threatened with a cancellation that they believe is unjustified 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 Can I Dispute an Audit?

If you believe that you are being charged an incorrect amount, you can submit a written request to the WCRIB asking that it review your case as to the correct application of the rating system. If you disagree with the WCRIB's finding, you have 30 (thirty) days to appeal in writing to us. 

Can I do Anything to Control the Costs of My Premiums?

If you are paying more than $500.00 in annual premiums, then your costs, at least to some extent, will be a function of your losses. If you can get your losses down, your premiums will come down. It is very important for you to take an active interest in matters such as safety, the medical management of claims and early return to work for any injured workers. If you are in the assigned risk pool, and are paying over $5,000.00 a year in premium, the odds are that your agent or broker may be 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.

Ultimately, employers pay the costs of losses to carriers plus the costs of the carriers operating. The more employers do to control or prevent losses, the less expensive workers' compensation will be for all employers. 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.

You can also contract the WCRIB to verify that the rate that your insurer is charging for your classification is correct for the upcoming year. 

What if I Believe an Employee Filed a Fraudulent Claim?

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 "noncompensable".

Administrative Judges at the DIA also have the power to make such determinations. Third party claim forms may be obtained from any DIA office.

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