An employee of an insurance company in Maine was injured when she slipped and fell on the icy stairs of her office building. She injured her knee and aggravated a preexisting back injury. The catch? The employee was on her lunch break, and her employer was unsure if she qualified for workers’ compensation benefits. The employer cited the “going and coming rule,” which states that injuries sustained off premises while an employee is going to or from work are not compensable.
According to the Maine Supreme Judicial Court, the employee was eligible for workers’ compensation benefits. Why? The stairs were considered the building’s “common area,” the injury occurred on the employer’s premises, and the accident arose while the employee was acting in the course of her employment—simply returning from a lunch break. The court ruled that she was entitled to benefits because the activity that led to the injury was an insubstantial deviation from her normal employment, didn’t violate any rules, and was not reckless.
Despite the dispute in this case, most employers recognize that they are obligated to help their employees pay for medical expenses if they are injured at work. Workers’ compensation insurance, which is required for most employers in Maine, helps injured workers pay for medical bills and lost wages due to work-related injuries and illnesses.
Maine workers’ compensation insurance provides benefits for occupational injuries or diseases suffered by an employee, regardless of who is at fault. Workers’ compensation insurance in Maine is the exclusive remedy for the coverage of work-related injuries and illnesses.
Maine law requires almost all public and private employers to have workers’ compensation coverage. Employers are defined as “private employers, the State, counties cities, towns, water districts, other quasi-public corporations, municipal school committees, and design professionals.” The Maine Workers’ Compensation Board may impose penalties for failure to have the legally required coverage, and failure to have coverage does not relieve employers of their responsibility for paying for worker injuries or illnesses.
Employers that do not have Maine workmans’ compensation coverage can be sued by their employees for work-related injuries. These employers may also be guilty of a Class D crime, and be subject to civil penalties and revocation or suspension of their corporate charter or certain other licenses.
Employers in Maine are required to have workers’ compensation insurance. Certain types of employers are exempt from this rule, including:
Maine workmans’ compensation insurance provides benefits for work-related injuries and illnesses. The following benefits are provided:
Over 300 insurance companies are authorized to sell workers’ compensation insurance in Maine. Costs and services vary from company to company, and insurance companies may specialize in certain types of risk and offer competitive pricing.
First-time business owners, small businesses, some high-risk businesses, and those with poor claims histories might have trouble obtaining Maine workers’ compensation insurance from private insurance companies. In these cases, employers may obtain coverage through Maine Employers’ Mutual Insurance Company, which is is a private company and helps the Maine workmans’ compensation rates remain competitive.
Employers may also self-insure on their own or with a group of similar businesses.
In Maine, workers’ compensation rates are competitive for employers with a good loss history (no or very few losses, implement and maintain safety programs).
The National Council on Compensation Insurance (NCCI) assigns classification codes to every occupation. Each classification code is assigned a base rate for workers’ compensation insurance. High-hazard occupations have higher rates than low-hazard occupations.
Maine workmans’ compensation premiums are based on how many employees you have, your total payroll, your industry classification code, and your history of accidents and workers’ compensation claims. Your annual payroll at the beginning of the policy period is divided by 100, and then multiplied by the base rate for your class code.
The auto shop above may have employees in more than one classification. All of its applicable classifications and related premiums are combined to determine the full Maine workmans’ comp insurance premium.
Maine workers’ compensation rates are higher than the national average. Rates are approved by the Maine Bureau of Insurance and the Maine Workers’ Compensation Board. Insurance companies may offer discounts and credits on policies that qualify.
The NCCI assigns a low rate and a high rate to each Maine class code. Base rates vary by class code and the insurance company’s underwriting standards.
Here are some sample base rates (rate per $100 of employer payroll) as of April 1, 2015.
An employer’s history of accidents and claims over time is expressed through an experience rating of its workers’ compensation insurance policy. Experience rating helps employers with safe workplaces receive lower rates as they build claims history.
An experience modification factor, or experience mod, is an additional factor that may be applied to your workers’ compensation premium calculation. It increases or decreases your workers’ compensation premium for a given year.
Your mod is a numerical representation of your actual losses compared to expected losses for your industry (plumbers are compared to plumbers, restaurant workers to restaurant workers, etc.).
Maine employers may qualify for experience rating if they reach:
If your workmans’ comp policy is experience rated, your premiums are determined with the following formula:
Your mod represents a debit or credit that is applied to your workers’ compensation premium, as follows:
Consider these examples of how experience rating affects Maine workers’ compensation premiums:
Because most businesses cannot control their industry classification or how risky their employees’ jobs are, experience rating is essential to controlling your workers’ compensation rates. By keeping claims and related costs low, you can control your mod, which will have an impact on what you pay for Maine workmans’ compensation insurance.
Looking for Maine workers’ compensation insurance? You need the help of a trusted advisor, like an independent insurance agent.
The examples in this article are simplified, and Maine workers’ compensation insurance is quite complex. An independent insurance agent can help you learn more about Maine’s workers’ compensation laws, to make sure you purchase the right policy to protect your business and your employees. And an independent agent can help you get quotes from multiple insurance companies so you can be sure you are getting the best rates.
Start your search for a local Trusted Choice agent now.