Massachusetts Injury Lawyers Blog
Massachusetts’ Workers’ Compensation law is complex. As such, it is not surprising that the entities involved in issuing workers’ compensation insurance and benefits will often disagree over their rights and obligations and will seek intervention from the courts. For example, in a recent Massachusetts ruling, the court discussed the process of determining if an insurer can recover cost of living benefits from the Workers’ Compensation Trust Fund. If you suffered wounds while working, it is in your best interest to meet with a Massachusetts Workers’ Compensation lawyer to discuss your rights.
Factual and Procedural History
It is alleged that the plaintiff was an insurance company that issued workers’ compensation policies in Massachusetts and later went into liquidation. The company sought reimbursement for cost of living adjustments (COLA) made to individuals receiving workers’ compensation benefits. Under Massachusetts law, employers fund these COLA increases through annual assessments collected by insurers and then reimbursed by the Workers’ Compensation Trust Fund. The plaintiff faced financial issues, leading to the cessation of new policy issuance and a run-off period to manage existing policies. The company was placed into liquidation. During the run-off, the company stopped accumulating assessments from employers but continued paying benefits, including COLA.
Reportedly, the Massachusetts Insurers Insolvency Fund (MIIF) paid outstanding claims from the company’s insolvency fund, later seeking reimbursement from the estate in New Hampshire. After the insolvency bond proceeds were exhausted, the MIIF became an unsecured creditor. Eventually, former company principals sought administrative reimbursement for COLA payments during the run-off and liquidation periods. An administrative judge ruled the company lacked standing for reimbursement, a decision partly upheld and partly reversed by the reviewing board of the Department of Industrial Accidents (DIA).
Cost of Living Reimbursements
The court reviewed whether the insurance company had standing to seek COLA reimbursement for two periods: the run-off period and post-liquidation. It agreed with the judge and the board that the company lost standing upon liquidation in 2003. The company’s argument that it had a property interest in the depleted insolvency bond was invalidated as the bond fund’s proceeds were exhausted, and any potential reimbursement would not replenish it.
During the run-off period, the company’s claim for reimbursement was contingent on collecting and transmitting assessments from employers, which it failed to do. The board emphasized that the collection of assessments was integral to the reimbursement process under the “pay as you go” workers’ compensation scheme.
The court deferred to the board’s expertise and statutory interpretation, affirming that non-contributors to the assessment fund could not claim reimbursement. Consequently, the court upheld the board’s rulings, denying the company’s entitlement to COLA reimbursements for both the run-off and liquidation periods.
Consult with a Proficient Massachusetts Workers’ Compensation Attorney
Individuals injured at work are entitled to apply for workers’ compensation benefits, but employers may often dispute the work-related cause of an injury to avoid paying claims. If you were injured while working, it is beneficial to consult with an attorney to discuss your options. Attorney James K. Meehan is a proficient Massachusetts workers’ compensation lawyer who can clarify your rights and support you in seeking the optimal legal outcome for your case. You can contact Attorney Meehan at 508-822-6600 or via our accessible online contact form to arrange a confidential meeting.