Maryland Workers’ Compensation Insurance: Laws, Providers & Rates

Workers’ compensation laws in Maryland require any employer with one or more employees to maintain workers’ compensation insurance. Policies pay the costs associated with employees getting hurt while performing job duties. Maryland business owners pay an average of $1.01 for every $100 of payroll for workers’ compensation insurance.

What Are Maryland Workers’ Compensation Requirements?

Workers’ compensation requirements vary by state. In Maryland, any employer with even a single employee must have a valid workers’ compensation policy prior to the employee starting his first shift.

Maryland state law does provide a few exemptions from this requirement, including:

• Large employers with a net worth equal to or exceeding $10 million who have been approved to self-insure for workers’ comp
• Independent contractors and self-employed individuals other than migrant workers.
• Agricultural office workers
• Tractor-trailer owner-operators

These are general guidelines regarding exemptions. If you feel you are eligible for a workers’ compensation exemption, confirm this with the Maryland Workers’ Compensation Commission.

Where Can I Obtain Workers’ Compensation Insurance in Maryland?

Different workers’ compensation insurance carriers serve multiple types of businesses in various industries better than others. Companies get workers’ compensation from private carriers, including the competitive state fund, Chesapeake Employers’ Insurance Company.

Top Maryland Workers’ Compensation Insurance Carriers

The Hartford

The Hartford has remained one of the top small business insurance providers for years in part because it treats every claim with personalized attention. The Hartford has six additional coverages included in its workers’ compensation policy for free including these additional coverages include stopgap, voluntary compensation, extended filing, and paying for reasonable expenses like paying for a claim-related deposition.

Chesapeake Employers’ Insurance Company

The Maryland Injured Workers’ Insurance Fund, now called the Chesapeake Employers’ Insurance Company, is the largest underwriter for Maryland workers’ compensation insurance. As both a competitive state fund and assigned risk plan, Chesapeake Employers’ Insurance Company guarantees insurability for the toughest risk classifications and companies with a high-loss history.

Erie Insurance

Erie Insurance is a regional insurance carrier that has been serving Maryland businesses for nearly a century. The company is a great fit for a small local business that wants a partner in the community as they grow. With local agents and a company mission of serving the community, Erie Insurance agents truly become part of the team for the small mom-and-pop shop that wants actionable guidance to meet larger goals and objectives.

Travelers Group

Travelers Group is the largest workers’ compensation insurance provider in the nation and the largest provider in Maryland. Travelers Group has a custom ConciergeCLAIM service for workers’ compensation injuries designed to streamline the process of getting everyone back to work quickly. Travelers Group fits best with small businesses providing services to the medical and healthcare industries.

Selective Insurance

Selective Insurance is a large regional commercial and personal insurance carrier and is one of the top workers’ compensation insurance carriers in Maryland. Selective Insurance covers many different industries but is a good choice for education and religious organizations as well as senior care facilities.

Maryland Workers’ Compensation Rates

Workers’ compensation costs are based on a business’s payroll expenses and its employees’ workers’ risk classification. Sometimes, an experience rating based on how long an employer has been in business and its claim history is also used. In Maryland, the average cost of workers’ compensation insurance is $1.01 for every $100 of payroll, according to the most recent data from the National Academy of Social Insurance.

The formula for determining workers’ compensation insurance rates is:

Premium = Classification code rate x Experience modification rating (EMR) x (Payroll / $100)

Workers’ comp class codes, developed by the National Council on Compensation Insurance (NCCI), are four-digit numbers that represent various industries. Each code has a base rate, with riskier industries having higher rates. Take a look at how job classifications change the rate in the table below.

Sample Maryland Workers’ Compensation Rates by Class Code

In addition to class codes, insurers may use an EMR as they calculate workers’ comp premiums. An EMR is a number that represents a business’ claims history. Businesses with more claims than similar companies have a higher EMR, and that increases their costs.

Maryland Workers’ Comp Cost Example

Let’s look at a landscaping company in Baltimore with an owner, one receptionist, and two technicians. The owner can opt out of coverage for himself. The receptionist (class code 8810) has a rating of 7 cents while the landscapers (class code 0042), who have a more dangerous job, are rated at $6.80.

If the receptionist’s payroll is $35,000 annually, and the two landscapers’ payroll total is $90,000, the first calculate the premium like this:

• Receptionist: ($35,000 / $100) x 7 cents = $24.50
• Landscapers: ($90,000 / $100) x $6.80 = $6,120

The estimated premium before factoring in claims history combines these two portions for a total of $6,144.50. Factoring in an EMR, however, can raise or lower that total.

Maryland Workers’ Comp Audit Requirements

Insurers have to use a payroll estimate to charge their initial premium because payroll varies based on a number of employment conditions. As a result, workers’ compensation policies are typically audited at the end of the term, approximately two months before the policy is set to renew. The premium audit confirms the actual payroll and may result in a refund or a bill for the extra premium. Most insurers also use the information from the audit to determine rates for the next policy period.

What Maryland Workers’ Compensation Insurance Covers

Maryland workers’ comp covers all reasonable costs associated with an employee getting hurt on the job. Key coverage components of Maryland workers’ comp policies include:

• Medical expenses: This starts emergency response costs associated with the work injury and continues through any surgery, hospital stay, physical therapy, medical device, or prosthetic required to treat the injury.
• Vocational benefits: Vocational rehabilitation services are covered, including training for up to 24 months if the employee cannot return to the same job after their injury.
• Partial disability payments: For a temporary partial disability, employees earn up to 50% of the difference between their average weekly wage and their earning capacity while disabled. Permanent partial disability benefits vary based on the number of weeks awarded for the injury.
• Total disability payments: Employees with either permanent or temporary total disabilities receive two-thirds of their average weekly wage. The amount can’t exceed the state’s average weekly wage. Temporary total disability benefits don’t kick in for three days, which are paid retroactively if the disability lasts more than 14 days.
• Beneficiary expenses: Financially dependent surviving family members of an employee who dies from a workplace injury receive weekly benefits up to two-thirds of the injured worker’s average weekly wage. This amount is reduced in correlation to the amount the worker contributed to the family’s total income.
• Funeral expenses: Up to $7,000 in reasonable funeral expenses will be paid to beneficiaries for injured workers who died from their injuries

What Maryland Workers’ Compensation Insurance Doesn’t Cover

Maryland is very specific in the language of its workers’ compensation insurance law. The law states that an injury is compensable if it arises “out of and in the course of employment.” This means that being “on the job” and getting hurt doesn’t result automatically in an approved workers’ compensation claim.

Additionally, Maryland workers’ compensation does not cover injuries resulting from intentional harm or criminal activity. An employee injured while willfully disregarding safety protocol or horsing around may not be eligible for workers’ compensation insurance benefits.

Maryland Workers’ Compensation Coverage Example

Bill is a plumber for a Parkville plumbing company. While cutting a new pipe, Bill’s saw slips, and he cuts himself severely on his leg. He is taken to the emergency room to get 15 stitches. The doctor advises Bill to let the gash heal for a week before returning to work.

All of Bill’s medical costs are paid for by the workers’ compensation. However, he must wait three days before his partial disability payments kick in. He receives 50% of his average weekly wage since he is unable to return to work while recovering and cannot earn a partial wage. Unfortunately, Bill does not receive compensation for the three-day waiting period because he was only out one week. If he had been unable to work for 14 days, the three-day waiting period would have been covered retroactively.

What Are the Penalties for Not Having Maryland Workers’ Compensation Insurance?

Certain self-employed individuals with no employees don’t have to carry workers’ compensation, and large corporations with assets of $10 million or more can choose to self-insure. Most of the rest of Maryland employers must get coverage or face fines of $250 per day. These fines can go up to $500 per day, and the business can be closed if the owner fails to comply. The fines cannot exceed $10,000, however.

Noncompliant businesses may also be responsible for covering an injured employee’s benefits. If the business is a corporation, its officers and directors may be held personally liable.

How to File a Workers’ Compensation Claim

When a worker gets hurt, the employer must make sure the claim is filed properly and in a timely manner. It is important that both employers and employees follow claim protocol to make sure all rights are reserved by the employee, company, and insurance carrier. The entire process starts with the injured employee seeking medical attention and notifying the employer. Employees must also complete an Employee Claim Form C-1 and file it with the Maryland Workers’ Compensation Commission.

Once notified, the employer needs to file a claim with their insurance company. If an injury causes a worker to miss more than three days, the employer has 10 days to submit a First Report of Injury online with the Maryland Workers’ Compensation Commission. If the employer fails to file a claim, the injured employee has 60 days to file the report for themselves.

Maryland Workers’ Compensation Insurance Deadlines

Some Maryland workers’ compensation insurance claims deadlines include:

• Employee’s report of injury: Employees should notify their employers immediately to protect their benefits. They are also responsible for filing this form with the Workers’ Compensation Commission. The statute of limitations on filing the form is two years.
• Employer’s First report of injury: Employers must submit this form to the Workers’ Compensation Commission and their insurance carrier within 10 days of an injury that keeps an employee out of work for three or more days.
• Insurance carrier approval: Insurers must approve or deny a workers’ comp claim within 21 days; the determination must be in writing and must state the benefit amount or why the claim is denied

Maryland Workers’ Comp Resources

• Contact Information
  • Workers’ Compensation Commission
    10 E. Baltimore St.
    Baltimore, MD 21202-1641
    410-864-5100
    info@wcc.state.md.us
• Key Forms
  • Employee Claim Form C-1
  • Employer’s First Report of Injury
• Useful Links
  • FAQs For Employers About MD Workers’ Compensation Law
  • Questions & Answers for Employees
  • Workers’ Compensation Claim Related Agencies

Bottom Line

Even though workers’ compensation insurance is required by Maryland law, it is also a valuable component to building working teams that know employers care about their safety and welfare. Going the extra step to work with insurance providers to train and educate employees on safe work practices reduces claims and improves the work environment for all.

We recommend The Hartford as a small business insurance business partner. It exceeds the expectations of small business owners with policies that provide the right amount of coverage for the right price. You can complete its online application in minutes to get a free, no-obligation workers’ compensation insurance quote.

Visit The Hartford