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 Laws
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.
The Basics of Maine Workers’ Compensation
Who Is Covered?
Employers in Maine are required to have workers’ compensation insurance. Certain types of employers are exempt from this rule, including:
- Employers with employees who are engaged in agriculture or aquaculture as seasonal or casual laborers
- Employers of six or fewer agricultural or aquacultural laborers
- Domestic servants in a private home
- Sole proprietors without employees are exempt, but may elect to be included; a sole proprietor with employees is required to carry workers' compensation insurance for the employees
- Partners are excluded from coverage, but may elect to be included
- Owners of corporations or LLCs can waive coverage for themselves
- A parent, spouse, or child of a sole proprietor, partner or owner may waive coverage
- Elected or appointed executive officers of charitable, religious, educational or other nonprofit corporations are not covered unless they are specifically included in coverage
- Contractors and subcontractors are excluded from coverage; you must be able to prove that the person you believe to be an independent contractor is not an employee
What Is Covered?
Maine workmans’ compensation insurance provides benefits for work-related injuries and illnesses. The following benefits are provided:
- Weekly wage replacement
- Payment of related medical bills, including prescriptions
- Reimbursement for mileage and related costs
- Vocational rehabilitation
- Partial or total disability
- Death benefits for surviving spouse or dependents
Where Can You Buy It?
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.
How Much Does Maine Workers’ Compensation Insurance Cost?
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.
- Classification Code 8380: Auto Shop
- Base Rate: $3.16
- Employer payroll (example): $100,000
- Premium calculation: $3.16 per $100 of employer payroll (or 3.16% of payroll)
- Estimated annual premium for sample auto shop: $3,160
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 Rate Examples
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.
- 0042 Landscaping: $7.20
- 5183 Plumbing: $4.50
- 5427 Carpentry: $4.95
- 8017 Retail Store: $1.62
- 8810 Clerical: $0.29
- 9082 Restaurant: $1.31
What Is Experience Rating and How Does it Affect Your Premium?
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:
- $9,000 in policy premium generated during the last year or last two years, or
- $4,500 average policy premium generated for more than two years
If your workmans’ comp policy is experience rated, your premiums are determined with the following formula:
- Base Rate X Payroll X Mod = Premium
Your mod represents a debit or credit that is applied to your workers’ compensation premium, as follows:
- All employers start out with a mod of 1.0. Premium is not affected.
- A mod greater than 1.0 means that losses were wore than expected, and premium goes up (a debit mod).
- A mod less than 1.0 means that losses were better than expected, and premium goes down (a credit mod).
Consider these examples of how experience rating affects Maine workers’ compensation premiums:
- Premium: $100,000
- Mod: 0.75 (25% premium credit)
- Premium with mod credit applied: $75,000
- Premium: $100,000
- Mod: 1.0
- Premium is not adjusted
- Premium: $100,000
- Mod: 1.25 (25% premium surcharge/debit)
- Premium with mod debit applied: $125,000
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.
How to Find Maine Workers’ 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.