An Act To Amend the Assessment Process and Funding of the Maine Workers' Compensation Board
Maine Legislature, Session 125, LD 1285
Committee: Labor, Commerce, Research and Economic Development
Sponsors: PRESCOTT, BURNS, CUSHING, DOW, HAMPER, WINTLE
Amends: 39-A MRSA §154, 39-A MRSA §324, 39-A MRSA §361

Legislative Document 
No. 1285 
H.P. 944 
House of Representatives, March 23, 2011 
An Act To Amend the Assessment Process and Funding of the 
Maine Workers' Compensation Board 
Reference to the Committee on Labor, Commerce, Research and Economic Development 
suggested and ordered printed. 
HEATHER J.R. PRIEST 
Clerk 
Presented by Representative PRESCOTT of Topsham. 
Cosponsored by Representatives: BURNS of Whiting, CUSHING of Hampden, DOW of 
Waldoboro, HAMPER of Oxford, WINTLE of Garland. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  39-A MRSA §154, as amended by PL 2009, c. 109, §1 and affected by §2, 
is further amended to read: 
§154.  Assessment on workers' compensation insurers and self-insured employers 
The Workers' Compensation Board Administrative Fund is established to accomplish 
the purposes of this Act.  An assessment must be levied on workers' compensation 
insurers and self-insured employers in accordance with this section.  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 paid to the Bureau of Insurance for deposit by 
the bureau to the General Fund. 
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. 
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. 
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 an assessment determined pursuant to this section for the purpose of 
providing partial support and maintenance of the board. 
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. 
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. 
C.    For each fiscal year, the initial assessment percentage must be determined by the 
board Superintendent of Insurance 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 Superintendent of Insurance 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 
Superintendent of Insurance may adjust the assessment percentage at any time to 
secure collection on an annual basis of the assessment amount established in 
subsection 6, 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. 
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 Superintendent of Insurance 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. 
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. 
5.  Amounts of premiums and losses; distribution of assessment.  The Bureau of 
Insurance shall provide to the board publish 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 Superintendent of Insurance shall 
determine a date prior to the required assessment to establish the distribution. 
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-
fiscal year or more than $11,200,000 beginning in the 2011-12 any 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 in the following fiscal year.  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. 
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. 
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. 
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. 
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 under Title 24-A, 
section 12-A. 
8-A.  General Fund request.  The Workers' Compensation Board shall submit its 
proposed budget to the Commissioner of Administrative and Financial Services for 
inclusion in the General Fund appropriation bill provided for in Title 5, section 1581. 
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. 
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. 
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. 
Sec. 2.  39-A MRSA §324, sub-§2, ¶A, as amended by PL 2007, c. 265, §1, is 
further amended to read: 
A.  Except as otherwise provided by section 205, if an employer or insurance carrier 
fails to pay compensation as provided in this section, the board may assess against the 
employer or insurance carrier a fine of up to $200 for each day of noncompliance.  If 
the board finds that the employer or insurance carrier was prevented from complying 
with this section because of circumstances beyond its control, a fine may not be 
assessed. 
(1)  The fine for each day of noncompliance must be divided as follows:  Of each 
day's fine amount, the first $50 is paid to the employee to whom compensation is 
due and the remainder must be paid to the board and be credited to the Workers' 
Compensation Board Administrative Fund submitted to the Treasurer of State for 
deposit into the General Fund. 
(2)  If a fine is assessed against any employer or insurance carrier under this 
subsection on petition by an employee, the employer or insurance carrier shall 
pay reasonable costs and attorney's fees related to the fine, as determined by the 
board, to the employee. 
(3)  Fines assessed under this subsection may be enforced by the Superior Court 
in the same manner as provided in section 323. 
Sec. 3.  39-A MRSA §361, as repealed and replaced by PL 2007, c. 26, §1, is 
amended to read: 
§361.  Payment to the General Fund; enforcement 
1.  Payment.  All penalties assessed under this Act, unless otherwise provided by 
law, are payable to the Workers' Compensation Board Administrative Fund, unless 
otherwise provided by law.  Upon certification by the board that certain amounts in the 
Workers' Compensation Board Administrative Fund attributable to penalties assessed 
pursuant to this Act are not required to support the activities of the board, the Treasurer of 
State shall transfer funds in the amount certified by the board to for deposit into the 
General Fund. 
2.  Enforcement and collection.  All penalties assessed under this Act are 
enforceable by the Superior Court under section 323. 
A.   The Attorney General shall prosecute any action necessary to recover penalties 
payable to the Workers' Compensation Board Administrative Fund, Employment 
Rehabilitation Fund or General Fund, or the board may retain private counsel for that 
purpose. 
B.   If a person fails to pay a penalty assessed under this Act that is payable to the 
Workers' Compensation Board Administrative Fund, Employment Rehabilitation 
Fund or General Fund and enforcement by the Superior Court is necessary: 
(1)  That person shall pay the costs of prosecuting the action in Superior Court, 
including reasonable attorney's fees; and 
(2)  If the failure to pay was without due cause, any penalty assessed on that 
person under this Act must be doubled. 
SUMMARY 
This bill amends the laws governing the Workers' Compensation Board as follows. 
1.  Under current law, the Workers' Compensation Board determines an assessment to 
be levied on insurers that write workers' compensation insurance in the State for deposit 
in a dedicated fund to support and maintain the Workers' Compensation Board.  This bill 
instead directs that the Superintendent of Insurance determine the assessment and that the 
funds be credited to the General Fund. 
2.  It limits the assessments levied to $10,000,000 in any fiscal year. 
3.  It directs the Workers' Compensation Board to submit its proposed budget to the 
Commissioner of Administrative and Financial Services for inclusion in the General Fund 
appropriation bill provided for in the Maine Revised Statutes, Title 5, section 1581.