§154. Dedicated fund; assessment on workers' compensation insurers and self-insured employers






The Workers' Compensation Board Administrative Fund is established to accomplish the
purposes of this Act. All income generated pursuant to this section must be recorded
on the books of the State in a separate account and deposited with the Treasurer of
State and be credited to the Workers' Compensation Board Administrative Fund. [1991, c. 885, Pt. A, §8 (NEW); 1991, c. 885, Pt. A, §§9-11 (AFF).]








1. Use of fund. 
All money credited to the Workers' Compensation Board Administrative Fund must be
used to support the activities of the board and for no other purpose. Any balance
remaining continues from year to year as a fund available for the purposes set out
in this section and for no other purpose.


[
1991, c. 885, Pt. A, §8 (NEW);
1991, c. 885, Pt. A, §§9-11 (AFF)
.]








2. Expenditures. 
Expenditures from the Workers' Compensation Board Administrative Fund are subject
to legislative approval and allocation in the same manner as appropriations are made
from the General Fund. The joint standing committee of the Legislature having jurisdiction
over appropriations and financial affairs shall approve the allocation.


[
1991, c. 885, Pt. A, §8 (NEW);
1991, c. 885, Pt. A, §§9-11 (AFF)
.]








3. Assessment on workers' compensation insurance. 
The following provisions apply regarding the Workers' Compensation Board assessment
on workers' compensation insurance.





A. Every insurance company or association that writes workers' compensation insurance
in the State and that does business or collects premiums or assessments in the State,
including newly licensed insurance companies and associations, shall pay to the board
the assessment determined pursuant to this section for the purpose of providing partial
support and maintenance of the board. [1995, c. 59, §1 (AMD).]










B. The assessment must be stated as a percentage of each employer's premium base.
In determining the assessment percentage, consideration must be given to the balance
in the Workers' Compensation Board Administrative Fund. [1995, c. 59, §1 (AMD).]










B-1. An employer's premium base for assessment purposes is defined as payroll times the
filed manual rate applicable to the employer times the employer's current experience
modification factor, if applicable. The calculation may not include any deductible
credit, other than credits for the $1,000 and $5,000 indemnity deductibles and the
$250 and $500 medical deductibles established pursuant to Title 24-A, sections 2385
and 2385-A. For policies written using retrospective rating, the premium base must
be calculated in accordance with this paragraph regardless of the actual retrospective
premium calculation.


The employer's premium base is subject to the final audit requirements of the Bureau
of Insurance Rule, Chapter 470. If the audit results in a change in premium base,
the amount of the assessment must be adjusted accordingly. [1995, c. 59, §1 (NEW).]










C. For each fiscal year, the initial assessment percentage must be determined by the
board by May 1st of the prior fiscal year. Insurance companies or associations must
begin collecting the initial assessment from all employers on July 1st of each year.
In establishing the assessment percentage, the board shall estimate the expected premium
base for the upcoming fiscal year based on the returns filed under paragraph D and
anticipated trends in the insurance marketplace. The board shall consult with the
Bureau of Insurance and other knowledgeable sources to help determine the trends.
The board may adjust the assessment percentage at any time but shall provide written
notice to the affected companies and associations at least 45 days prior to the effective
date of the adjustment. The board may not adjust the assessment percentage more than
3 times in a fiscal year. The adjusted assessment percentage must be applied prospectively
on policies with an effective date on or after the effective date of the adjustment. [1995, c. 59, §1 (AMD).]










D. Every insurance company or association subject to the assessment imposed by this
section with an estimated annual payment of $50,000 or more based on previous assessment
returns may make payments quarterly. Each insurance company or association electing
quarterly payments must on or before the last day of each January, each April, the
25th day of each June and the last day of each October file with the board on forms
prescribed by the board a return for the quarter ending the last day of the preceding
month, except the month of June, which is for the quarter ending June 30th and remit
payment of the assessment based upon the results for the quarter reported. A final
reconciled annual return must be filed on or before September 15th covering the prior
fiscal year in which the previous assessment was levied. The final return must be
certified by the company's or association's chief financial officer. Insurance companies
or associations with an annual assessment estimate of under $50,000 shall pay the
assessment on or before June 1st and shall also file a quarterly and an annual return
on forms prescribed by the board. Affiliated insurers may aggregate their collection
volume in order to meet the $50,000 assessment threshold as long as the affiliation
is consistent with the standards defined in Title 24-A, section 222. Those qualifying
insurance companies or associations that opt to consolidate their quarterly payments
and reports may do so only if each individually licensed company or association is
individually reported within each consolidated return. [1995, c. 59, §1 (AMD).]







[
1995, c. 59, §1 (AMD)
.]








4. Assessment on self-insured employers. 
Every self-insured employer approved pursuant to section 403 shall, for the purpose
of providing partial support and maintenance of the board, pay an assessment on aggregate
benefits paid by each member pursuant to section 404, subsection 4. This assessment
must be a dollar amount.


[
1995, c. 59, §2 (AMD)
.]








5. Amounts of premiums and losses; distribution of assessment. 
The Bureau of Insurance shall provide to the board the amounts of gross direct workers'
compensation premiums written by each insurance carrier and the amounts of aggregate
benefits paid by each self-insurer and group self-insurer on or before April 1st of
each year. Beginning with the assessment for the fiscal year beginning July 1, 1995
and thereafter, the total assessment must be distributed between insurance companies
or associations and self-insured employers in direct proportion to the pro rata share
of disabling cases attributable to each group for the most recent calendar year for
which data is available. This distribution of the assessment must be determined on
a basis consistent with the information reported by the Department of Labor, Bureau
of Labor Standards, Research and Statistics Division in its annual Characteristics
of Work-Related Injuries and Illnesses in Maine publication, provided that any segment
of the market identified as "not-insured" be excluded from the calculation of proportionate
shares. In consultation with the Director of Labor Standards, the board shall determine
a date prior to the required assessment to establish the distribution.


[
1995, c. 59, §3 (AMD)
.]








6. Assessment.  
Assessments levied under this section are subject to the following.





A. The assessments levied under this section may not be designed to produce more than $10,000,000 beginning in the 2008-09 fiscal year, more than $10,400,000 beginning
in the 2009-10 fiscal year, more than $10,800,000 beginning in the 2010-11 fiscal
year or more than $11,200,000 beginning in the 2011-12 fiscal year. Assessments collected
that exceed the applicable limit by a margin of more than 10% must be used to reduce the assessment that is paid by insured employers pursuant to subsection 3. Any amount collected above the board's allocated budget and within the 10% margin
must be used to create a reserve of up to 1/4 of the board's annual budget. [2009, c. 109, §1 (AMD); 2009, c. 109, §2 (AFF).]











B. The board, by a majority vote of its membership, may use its reserve to assist in
funding its Personal Services account expenditures and All Other account expenditures
and to help defray the costs incurred by the board pursuant to this Act including
administrative expenses, consulting fees and all other reasonable costs incurred to
administer this Act. The board shall notify the chairs and members of the joint standing
committee of the Legislature having jurisdiction over labor matters whenever the board
receives approval from the State Budget Officer and the Governor to use reserve funds
to increase its allotment above the allocation authorized by the Legislature. Any
collected amounts or savings above the allowed reserve must be used to reduce the
assessment for the following fiscal year. [2007, c. 240, Pt. LL, §1 (NEW).]










C. The board shall determine the assessments prior to May 1st annually and shall assess
each insurance company or association and self-insured employer its pro rata share
for expenditures during the fiscal year beginning the immediately following July 1st.
Each self-insured employer shall pay the assessment on or before the immediately following
June 1st. Each insurance company or association shall pay the assessment in accordance
with subsection 3. [2007, c. 240, Pt. LL, §1 (NEW).]







[
2009, c. 109, §1 (AMD);
2009, c. 109, §2 (AFF)
.]








7. Insurance company or association collections. 
Insurance companies or associations shall bill and collect assessments under this
section on insured employers. The assessments must be separately stated amounts on
all premium notices and may not be reported as premiums for any tax or regulatory
purpose or for the purpose of any other law. All collected payments must be submitted
to the board with the next quarterly payment. The Bureau of Insurance shall report
to the board all newly authorized workers' compensation carriers in order to facilitate
notification to the new carrier of its obligations under this section.


[
1995, c. 59, §5 (AMD)
.]








8. Violations. 
Any insurance company, association or self-insured employer subject to this section
that willfully fails to pay an assessment in accordance with this section commits
a civil violation for which a forfeiture of not more than $500 may be adjudged for
each day following the due date for which payment is not made.


[
1991, c. 885, Pt. A, §8 (NEW);
1991, c. 885, Pt. A, §§9-11 (AFF)
.]








9. Deposit of funds; investment. 
All revenues derived from assessments levied against insurance companies, associations
and self-insured employers described in this section must be reported and paid to
the Treasurer of State and credited to the Workers' Compensation Board Administrative
Fund. The Treasurer of State may invest the funds in accordance with state law.
All interest must be paid to the fund.


[
1991, c. 885, Pt. A, §8 (NEW);
1991, c. 885, Pt. A, §§9-11 (AFF)
.]








10. Deposit of funds in Workers' Compensation Board Administrative Fund. 
The Treasurer of State shall deposit in the Workers' Compensation Board Administrative
Fund funds collected pursuant to section 152, subsection 14.


[
1993, c. 145, §5 (NEW)
.]








11. Assessment errors. 




[
1995, c. 59, §6 (RP)
.]








12. Audit. 
In consultation with the Bureau of Insurance, the board may audit all returns and
investigate any issues relevant to the collection and payment of any assessment under
this section.


[
1995, c. 59, §7 (NEW)
.]





SECTION HISTORY

1991, c. 885, §A8 (NEW).
1991, c. 885, §§A9-11 (AFF).
1993, c. 145, §§4,5 (AMD).
1993, c. 619, §§2,3 (AMD).
1995, c. 59, §§1-7 (AMD).
1997, c. 486, §5 (AMD).
1999, c. 359, §1 (AMD).
2001, c. 393, §1 (AMD).
2001, c. 692, §1 (AMD).
2003, c. 93, §1 (AMD).
2003, c. 425, §2 (AMD).
2007, c. 240, Pt. LL, §1 (AMD).
2009, c. 109, §1 (AMD).
2009, c. 109, §2 (AFF).