DIA Issues Official Policy on Out-of-State Workers' Compensation

Over the last several months, MAIA has participated, as a member of a sub-committee of the WC Bureau, on meeting with representatives of the Department of Industrial Accidents (DIA) and the Patrick Administration's Underground Task Force to review and better understand its rationale and enforcement of its policy on verifying workers' compensation coverage for employers coming in from other states. The purpose of the DIA's policy (below) on Out of State coverage is to make sure that everyone in Massachusetts is covered for workers' compensation and that the proper premium is being paid so that the WC Trust Fund won't have to pay for claims filed that are not covered by a WC policy.

The following is the Department of Industrial Accidents' official policy for Out of State workers' compensation coverage:

"An Out of State workers' compensation policy is acceptable if Massachusetts is specifically listed in Section 3.A of the policy's Information Page.

"If Massachusetts is specifically listed in Section 3.C of the Information Page, the policy is acceptable only if the Insurer (Insurance Carrier) verifies the coverage in Massachusetts. The insurer must forward a statement verifying workers' compensation coverage in Massachusetts to the Office of Investigations. If the insurer fails to meet this requirement a Stop Work Order shall be issued immediately.

"Furthermore, any notation in Section 3.C of the policy's information page that "all states are covered" or "all states are covered except those listed in Item 3.A and the States of: ND OH WA WY" or something similar is acceptable only upon verification of workers' compensation coverage in Massachusetts by the insurer. The insurer must forward a statement verifying workers' compensation coverage in Massachusetts to the Office of Investigations. If the insurer fails to meet this requirement a Stop Work Order shall be issued immediately."

By way of background, in late September of 2008 and then again in May 2009, the DIA began working with the Massachusetts State Police, at the invitation of the State Police, to make sure that drivers of trucks coming into Massachusetts are covered by a WC policy. If the truck is making stops in Massachusetts, the driver is asked to contact the President of the company that he is working for in order to confirm if there is WC coverage and who the insurer is.  The insurer is then contacted to confirm that there is Massachusetts WC coverage, and they ask the company to fax a confirmation to the DIA. If there is no WC coverage, a stop work order is issued and the company has the right to appeal. If there is an appeal, a hearing is held within  14 days, but the truck is allowed to continue on its route. If a truck is stopped and is simply passing through Massachusetts (interstate commerce), the DIA doesn't investigate.

The WC Bureau’s sub-committee had proposed changes to the DIA’s Out of State Coverage policy, but the DIA only agreed to change the word “guarantee” in its policy to “verify”.  The DIA’s policy continues the practice of verifying WC coverage with the carrier whenever Massachusetts (MA) is listed in Item 3C of the WC policy. (The sub-committee had proposed that the DIA automatically accept any policy that showed MA in Item 3C.) The DIA has, however, adopted our proposal to accept, upon verification with the carrier, any policy that has “all states are covered” or similar language in Item 3C. (The DIA’s prior practice was to issue a Stop Work Order immediately.)

If you have questions regarding the DIA’s Out of State Coverage Policy, please contact Dan Foley by phone at 800.972.9312 or 508.634.2900 or by email at [email protected].