Massachusetts Revises Workers’ Comp Paperwork Snafu

Bowing to pressure from insurers and agent groups, Massachusetts safety regulators have eased new, workers’ comp paperwork requirements for some out-of-state contractors.

At issue is a form used by inspectors to verify whether a non-Massachusetts company doing business in the Bay State. This summer, the state’s Division of Industrial Accidents began requiring a new form — known as Form 154 — be used to verify workers’ compensation insurance when a business is covered under section 3c of a policy — typically used to cover business that have no physical location in Massachusetts.

The form, however, created a number of headaches for agents, carriers and their clients, several of whom were subject to fines and stop work orders, said Dan Corbin, research director for the Professional Insurance Agents in New Jersey, New York, New Hampshire and Connecticut.

That was in large part because safety regulators originally required the form — which can only be signed by insurance companies — include a 10-day advanced notice of cancellation, which insurers have not procedure for issuing in those cases. The signature line of the form included language that could subject the company signer to perjury charges — an item that also left insurers uncomfortable.

Those two items led to several insurers refusing to sign the form, leaving their insureds subject to fines and their agents in a delicate position.

No more.

Last month, Massachusetts agreed to drop those two items, after several agents’ groups in border states complained that the form was unnecessarily subjecting clients to needless paperwork requirements.

Filling out the original form “would have required a complete introduction of procedures” at insurance companies which “have no system in place to give notice,” Corbin said. “Carriers could not sign it and it led to situations where businesses had legitimate coverage in Massachusetts but could not technically verify it.”

Corbin said the changes were welcome, and should ease concerns by carriers.

Warren Rupar, president of the Independent Insurance Agents of Connecticut, said the revised rules will eliminate much of the verification problem for agents who have clients doing business in the Bay State.

“There is no need for this form since (a workers’ comp) policy includes any other state coverage,” he said. “The original ideas was very burdensome. There is still another step to go through but the fact that it’s now only required when (Massachusetts) requests it. That’s certainly not as bad.”

As far as agents helping their customers clear that hurdle, Rupar said agents should “make sure they talk with customers and let them know that if they are doing business in Massachusetts, they may have to fill out this form.”