Workers’ compensation (comp) insurance in Massachusetts is designed to protect both the employer and the employee alike. In 2015, according to the Massachusetts Survey of Occupational Injuries and Illnesses Report, 79,800 non-fatal workplace injuries and illnesses occurred in both the public and private sectors. While Massachusetts is continually below the national average for workers comp insurance claims and the state has seen a consistent decline of roughly 30,000 injuries and illnesses annually compared to 2004 to 2007 figures, the law is clear that most employers in the state are required to provide their employees with workers’ comp.

Workers’ Compensation in Massachusetts

Workers’ compensation in Massachusetts is somewhat different to many other states. It is also important to note that the workers’ compensation record-keeping process is unique to that of OSHA. If you have at least one employee, you are required by the Commonwealth to provide workers comp insurance. By providing such compensation and benefits to employees, such employees waive the right to sue the company or partners for liability if an injury or illness is to occur. Of course, the employer must provide adequate benefits in a timely manner or they could face penalties and prosecution.

Some exceptions to providing comp insurance do exists such as business partnerships in a LLC or a LLP, corporate officers, independent contractors, as well as an unincorporated sole proprietorship. And, any other type of employer does not require workers’ comp insurance if an employee is one of the following: Door-to-door salespeople, part-time domestic workers who works 15 hours of less, professional athletes, seamen, cab drivers, and real estate agents. All of those individuals previously mentioned are not considered employees and do not require workers’ compensation insurance. Keep in mind that it is possible to provide workers’ compensation to these individuals, it simply is not required by law.

This type of insurance will cover the medical bills of an employee who is injured at work or becomes ill due to the working environment or job. The insurance will also cover rehabilitation and a portion of lost wages if an employee must miss work or become transferred to a new position as a direct result of the injury or illness. Preexisting conditions are not covered by workers’ compensation insurance unless the condition is greatly exacerbated by the job or environment. Keep in mind that hearing loss and partial disability are also covered by workers’ comp.

The Department of Industrial Accidents

The Massachusetts workers’ compensation system is managed by the Department of Industrial Accidents (DIA). This division acts as the court system when cases of wrongdoing are filed by either the employer or the employee. This department also provides assistance to insurance companies and attorneys to ensure everyone is fairly and justly represented throughout the claims process. Employees can file a claim against an employee if they believe the illness or injury was the result of a preexisting condition, just as an employee can file against an employer for not providing timely and adequate benefits coverage.

The DIA will act as an intermediary mediator throughout the four possible levels of the dispute resolution processes and procedures. These individuals will examine each case and determine whether or not payments should be terminated or whether or not additional benefits should be awarded to the employee. And, they will also determine whether or not a business should be fined or even closed if proper workers’ compensation insurance has not been provided to all eligible employees from the beginning. Roughly 12,000 cases a year are administered by the DIA. The department is also responsible for the collection of fees and fines.

Insurance Providers

The vast majority of employers in Massachusetts use commercial workers’ compensation insurance carriers. With this type of insurance, you pay a fee based on the risk codes and wages of all your employees and, in turn, they provide financial assistance when necessary and reasonable to the injured party. It is also possible to become self-insured, however this is a bit more complicated.

Self-insurance requires a minimum of 300 employees and $750,000 as a standard premium each year. To qualify, you must apply with the Office of Self Insurance and verify that you have enough capital to cover all self-insurance related expenses such as third party administer, attorney, bond, a solid credit rating, and the most current annual report.

Direct Costs

The commonwealth of Massachusetts has been working to reduce workers’ comp premiums for the past few years. From 2015 to 2016, the premium rate decreased from 5.8 percent to 5.75 percent. And, in 2017, the rate decreased again from 5.75 to 5.6 percent. This is a tremendous savings for smaller employers.

Premiums are estimated at roughly $0.76 per $100 of an employee’s payroll. This figure will vary based on the risk value assigned to a company, industry, or position. If you have riskier jobs such as construction employees or individuals who work with hazardous materials, you are likely to have higher rates that a video game design company.

Disciplinary Measures for the Uninsured Employer

If you do not provide adequate workers comp insurance you could face criminal or civil charges. You could even become subject to a mandatory shutdown of operations by the DIA. Civil fines could be as much as $250 per day. If criminal charges have been assigned to your organization, you could be fined $1,500 and a year of imprisonment. And, if your organization is charged with civil or criminal penalties pertaining to inadequate workers’ compensation insurance or the misclassification of employee codes to reduce premiums, you will not be permitted to bid or work on any state or government contract for up to three years.

Additional Information

If you require additional information, be sure to contact one of the following:

  • Department of Industrial Accidents
  • Office of Investigations
  • Office of Vocational Rehabilitation
  • Workers’ Compensation Unit
  • Office of Self Insurance
  • US Office of Workers’ Compensation Program

When you properly follow Massachusetts, law regarding workers’ comp insurance, you will save money in the long term, improve employee morale and productivity, and improve the image of your brand with consumers and business partners alike.