Most Maryland businesses with employees are required to pay for workers' compensation insurance (WC or workers' comp insurance). The insurance provides compensation to employees who suffer work-related injuries. Here are some basic facts that you need to know about workers' comp insurance in Maryland as a business owner and employer.
In almost all cases, if your Maryland business has just one employee, you're required to carry workers' compensation insurance. An exception applies for agricultural employers with less than three employees or an annual payroll not greater than $15,000. Business owners, such as sole proprietors or partners in partnerships, also don't need to be covered by WC insurance.
The Maryland Workers' Compensation Commission (WCC) is the primary state agency that handles workers' comp claims. Most of the law for WC insurance is contained in Maryland's Workers' Compensation Act (Title 9 of the Maryland Code). In addition to the Act, there are also administrative rules that cover workers' compensation in Maryland (Title 14, Subtitle 09 of the Code of Maryland Regulations).
In Maryland, workers' compensation insurance is available through private insurance companies. If your business is unable to obtain coverage through a private insurer, you can get coverage through the Chesapeake Employers Insurance Company (CEIWC), which is the state's WC insurer of last resort. There is also an option to self-insure, but this may not be advisable for smaller businesses, in part because it requires that a lot of money be set aside to cover potential claims.
An injured employee should report his or her injury to you immediately. In addition, the employee is responsible for filing Form C-1, Employee Claim Form, through the WCC's online filing system. You, the employer, are required to file Form SF-1, Employer's First Report of Injury (FROI), with your workers' comp insurance carrier and the WCC. You can get the form through the WCC's online filing system. You file the form within 10 days of being notified, orally or in writing, of the injury or accident.
You also should forward employee medical bills to your insurer for payment. If you are not contesting the claim, you or your insurer must start paying benefits within 21 days.
Beyond these initial steps, there are subsequent steps to the WC claims process, not covered here. The WCC has a helpful flowchart you can consult for further information.
After a claim is filed, you will receive a copy of a Form C-30 (claim form) and a Form C-40 from the WCC. Form C-40 will contain a consideration date. You must file so-called contesting issues (or, simply, issues) prior to the consideration date. This triggers the claim dispute process.
Initially, disputed claims are handled through hearings conducted by the WCC. If you are not happy with the WCC's decision, you can appeal to a local circuit court within 30 days of the WCC's decision. From there, you can also appeal to the state's Court of Special Appeals.
If you don't carry workers' compensation insurance you may be subject to a fine of up to $10,000. In the case of corporations, individual corporate officers may be directly liable to the state for fines. Some of the penalties and fines are contained in Subtitle 11 of Maryland's Workers' Compensation Act.
There are many other workers' compensation requirements for Maryland employers, such as putting up posters about workers' compensation coverage where employees can see them. The Nolo website has a section devoted to workers' compensation. In addition, the Maryland Workers' Compensation Commission website also contains many useful resources.