Massachusetts workers’ compensation laws require any company with even one part-time employee to maintain coverage. This includes business owners when they’re considered employees. Massachusetts employers can expect to pay on average approximately 73 cents per $100 in payroll for workers’ compensation insurance.
If you’re unsure where to start with a workers’ compensation insurance policy, you should know that the experts at CommercialInsurance.NET work with many providers to make sure you get the best policy based on your industry and business profile.
What Are Massachusetts Workers’ Compensation Requirements?
Workers’ compensation requirements vary by state. In Massachusetts, you must provide coverage for your employees, regardless of how many hours they work. That includes you, as the business owner, if you are paid as an employee of the company.
There are a few exceptions to that coverage requirement. For instance, Massachusetts assumes workers are employees unless they fit the criteria of an independent contractor. Other exceptions include :
- Commission-only real estate salespersons
- Commission-only consumer goods salespersons who don’t work in a retail store
- People in interstate or foreign commerce who are covered by federal law
- Taxi drivers who lease their cabs on a fee basis not related to fares
- Professional athletes
- Students working under a school-to-work program
- Corporate officers who own 25% in a corporation and request an exemption
- Domestic employee working less than 16 hours per week
- A sole proprietor or partner unless they opt in
Who Needs Workers’ Compensation Insurance in Massachusetts?
Because almost anyone with an employee must have workers’ compensation insurance, it is important to know how the state defines “employee.” Per Massachusetts code M.G.L. c. 152, §1(4), an employee is considered anyone who works “in the service of another under any contract of hire, express or implied, oral or written.”
This means you don’t necessarily need to have established a W2 employee relationship with someone to be considered their employer and required to provide workers’ compensation insurance. It is irrelevant what industry you work in and how much you pay an employee. If they meet the definition of an employee, you must have a workers’ compensation policy in force.
Where Can I Obtain Workers’ Compensation Insurance in Massachusetts?
Massachusetts is considered a competitive state, meaning you can obtain workers’ compensation insurance from private insurance carriers. This helps prices remain competitive across various industries. For those with high claims histories or who are unable to obtain insurance through a private carrier, the Beacon Mutual Insurance Company is the state’s public option.
Top Workers’ Compensation Insurance Insurers in Massachusetts
CommercialInsurance.net is a business insurance matchmaker that works with more than 200 providers of business insurance. Being a matchmaker allows Commercialinsurance.net to do the heavy lifting for business owners who are shopping for insurance. Its representatives find the right carrier after you complete a simple intake questionnaire. With so many top-rated carriers at their disposal, Commercialinsurance.net can often get insurers’ best possible offers.
The Hartford is one of the largest workers’ compensation insurance carriers in Massachusetts, with more than $34 million in premiums written in 2019. As one of the premier business insurance carriers, The Hartford can handle workers’ compensation and business insurance for the small business owner with ease. Its workers’ compensation policy offers some of the broadest coverage with extended reporting deadlines, voluntary compensation, and coverage for reasonable expenses when assisting in a claim.
Liberty Mutual is another national carrier that writes a lot of workers’ compensation insurance in Massachusetts with more than $27.6 million in premiums in 2019. The company prides itself on more than just helping injured workers get back on their feet again. It assists employers with risk control services to help ensure fewer accidents happen. Both services can be beneficial to your bottom line.
Travelers Insurance underwrites workers’ compensation policies that extend beyond state borders, which is helpful for those working in the marine industry. It had more than $42 million in premium written in 2019 with almost 4% of the market share. One of Travelers selling points is that it has one of the best investigative claims teams around, sniffing out fraud and saving business owners money.
How Much Does Workers’ Compensation Insurance Cost in Massachusetts?
Workers’ comp rates are determined by the Workers’ Compensation Rating and Inspection Bureau of Massachusetts and are based on the company’s industry, payroll, claims history, and insurance carrier. Massachusetts is considered an average costing workers’ comp insurance state, meaning the rates are not the lowest in the nation but not the highest either. Across all industries, Massachusetts businesses pay between 73 cents to 74 cents per $100 of payroll.
Sample Class Codes and Rates
Industry Class Code
5183 Plumbing Contractors
7600 Alarm Installation
8810 Clerical - Office
8829 Nursing Home
As you can see from the chart, the type of work an employee does greatly affects the rate of the workers’ compensation policy. One company may have different classes of employees that must be accounted for.
Massachusetts Workers’ Comp Cost Example
Assume a plumbing company has an owner, two employed plumbers, and an office clerk to handle calls and paperwork. The owner does not opt in as an employee and is thus exempt from the workers’ comp calculation. Each of the plumbers makes $60,000 per year for a combined total of $120,000, and the clerk makes $35,000 per year. The company has had no claims in the prior three years.
To calculate the cost of workers’ comp insurance, use the sample rates from the table above. The rate for the plumbers (class code 5183) is $2.82 per $100 of payroll while the rate for the clerk (class code 8810) is 3 cents per $100 of payroll. In this example, the base premium is $3,384 for the plumbers plus $10.50 for the clerk for a total of $3,394.50.
($120,000/$100 x $2.82) + ($35,000/$100 x 3 cents) = $3,394.50
This rate, however, is just the beginning. The plumbing company might also be subject to an experience modifier rate that represents its claims history, increasing or decreasing the base premium accordingly. Because this company hasn’t had claims in three years, its experience modifier rate is most likely one or lower, so the estimated premium of $3,394.50 should remain the same or possibly go down a bit.
Massachusetts Workers’ Comp Audit Requirements
Workers’ comp policy pricing is based on payroll estimates that are verified for accuracy at the end of the contract term. This is done through a workers’ comp audit that reconciles the estimated premium and the actual premium. Policyholders whose premiums were overestimated see a refund after the audit. Those where the premiums were underestimated owe the difference. Future premiums also are based on the results of the audit.
Audits are required for continued coverage, and refusing to conduct the premium audit can result in policy cancelation and make it difficult to obtain new insurance.
What Does Workers’ Compensation Insurance in Massachusetts Cover?
Workers’ compensation insurance covers employees who are injured or get ill due to work-related duties. Massachusetts workers’ comp benefits include:
- Medical: Covers adequate and reasonable medical care, prescription reimbursement, and travel to and from medical visits
- Temporary total incapacity: Covers 60% of the injured employee’s gross average weekly wage based on the 52 weeks prior to the injury and starting on the sixth day of disability
- Temporary partial incapacity: Covers 75% of an employee’s weekly total temporary benefits if they can work after work-related injury but earn less money
- Permanent and total incapacity: Covers 66% of an employee’s gross average weekly wage if they are totally and permanently unable to do any work after their injury
- Scarring and permanent loss of function and disfigurement: Pays a one-time payment based on the severity and location of the disfigurement or loss of function
- Vocational rehabilitation: Assists injured workers return to meaningful employment
- Survivors’ and dependents’ benefits and burial costs: Covers weekly benefits to the deceased employee’s spouse equal to 66% of the employee’s average weekly wage and burial costs of up to eight times the state’s average weekly wage (SAWW) at the time of death
Injured workers must be disabled for five full or partial calendar days before they can file a temporary or permanent incapacity claim. Workers with injuries that heal in less than five days can file a medical-only claim.
Average weekly wage: Massachusetts workers’ comp law defines this as “an amount equal to one twenty-sixth of the total wages reported for an individual in the two highest quarters of his base period.” Massachusetts also uses the state’s average weekly wage to determine a maximum and minimum weekly compensation rate. In October 2020, Massachusetts set its SAWW at $1,487.78.
Massachusetts Workers’ Compensation Coverage Example
Joe is a roofer working for Mass Top Roofing Co. While pulling roofing material up on a housetop, he falls off a ladder and breaks his leg. His boss immediately calls an ambulance to get Joe medical attention. Later, Joe learns he will be unable to work for six weeks as his leg heals, so his boss files an Employer’s First Report of Injury/Fatality (Form 101) with the Department of Industrial Accidents (DIA). After the five-day waiting period, Joe can collect temporary disability for the six weeks he is unable to work.
Massachusetts Workers’ Compensation and COVID-19
Like most states, workers’ comp in Massachusetts only covers occupational illnesses and injuries, so coverage for COVID-19 is limited to occupations where exposure is “inherent in the employment.” According to information from the Attorney General’s Office, this means employees in some fields, such as healthcare workers, are potentially covered. Others are most likely not covered even if they can show they contacted the disease at work.
What Are the Penalties for Not Having Workers’ Compensation Insurance in Massachusetts?
Massachusetts business owners may face both civil and criminal penalties for not maintaining proper workers’ compensation coverage. The civil penalties start with a $100 per day fine for each day the company does not have workers’ compensation. In addition to the fine, the state issues a stop work order until the business owner obtains insurance and pays the outstanding fines. The DIA can increase the penalty to $250 per day if the employer appeals the stop work order.
Uninsured employers can also face criminal penalties of up to $1,500 and imprisonment of up to one year. Additionally, these employers can be barred from bidding on state or municipal funded contracts for up to three years.
How do I File a Workers’ Compensation Claim in Massachusetts?
There are two types of claims Massachusetts workers can file: medical-only and loss-of-income benefits. Medical-only claims don’t have a waiting period, and the employer must provide necessary resources to aid the employee with the proper medical attention. These claims are reported to the workers’ compensation insurance carrier.
To file a workers’ compensation claim to receive loss-of-income benefits, an employee must be disabled for at least five days; the days do not need to be consecutive. Once the employee notifies the employer of their injuries, the employer has seven days from the fifth day of disability to file Form 101 with the DIA (Sundays and legal holidays excluded). This form requires detailed information, including:
- The exact date of injury or illness
- The type of injury
- What body part was affected
- The first day the employee missed work
- The fifth day the employee missed work
- Contact information for the employee’s doctor
Form 101 must be completed and filed with the DIA electronically. After that, the employer has to make copies for their records, their injured employee, and their workers’ compensation insurance carrier
Massachusetts Workers’ Compensation Deadlines
To ensure that workers’ compensation claims are paid according to the law, employees and employers have certain deadlines they must meet. For example, employees are encouraged to report any injury immediately to their employer, who then files a claim with their insurer (for medical-only claims) or the DIA (for loss-of-income claims).
If the employer doesn’t report the incident within 30 days, the employee can use the Employee’s Claim (Form 110) to report the injury for themselves. Employees have four years from the date they become aware of a connection between their injury or illness and their employment to file a workers’ compensation claim.
However, some employers’ deadlines vary depending on when they learn of their employee’s injury. The most important one is filing Form 101 within seven calendar days after the fifth day of their employee’s disability or within seven calendar days after the employee notified them of the injury. Failing to file Form 101 by the deadline three times in a 12-month period results in $100 fines for each subsequent incident.
There are some exceptions to the time limits for employees giving the employer notice, including:
- Contagious illness that requires quarantine
- Any injury requiring prolonged treatment or surgery
- Any injury that results in a coma
Massachusetts Workers’ Comp Resources
- Contact information:
Department of Industrial Accidents
Lafayette City Center
2 Avenue de Lafayette
Boston, MA 02111-1750
- Key links:
As an employer in Massachusetts, you must maintain the proper workers’ compensation insurance policy or face stiff civil or criminal penalties. It’s in your best interest to protect employees from injuries and illnesses on the job as it creates a better work environment, and employees experience less time off of work.
To get the right workers’ compensation insurance policy, you want to find a company that understands your industry and prices policies in an affordable fashion for your industry. CommercialInsurance.net works with major insurance carriers to shop for the best policy on your behalf. It’s free and easy to get a quote.