iaiabc annual convention 2010 border wars: the fight over coverage for out of state temporary...

IAIABC Annual Convention 2010

Border Wars: The Fight Over Coverage For Out of State Temporary Workers

Border Wars: Out of State Coverage for Temporary Workers

What are the issues?3A vs. 3C coverage – what does this mean?Temporary/Incidental workers“Operations” within a stateNational database to report all coverage?States need confirmation of coverage and

Carriers need reporting standards


PART THREE OTHER STATES INSURANCE A. How This Insurance Applies

1.This other states insurance applies only if one or more states are shown in Item 3.C. of the Information Page.

2. If you begin work in any one of those states after the effective date of this policy and are not insured or are not self-insured for such work, all provisions of the policy will apply as though that state were listed in Item 3.A. of the Information Page.

3. We will reimburse you for the benefits required by the workers compensation law of that state if we are not permitted to pay the benefits directly to persons entitled to them.

4. If you have work on the effective date of this policy in any state not listed in Item 3.A. of the Information Page, coverage will not be afforded for that state unless we are notified within thirty days.

B. Notice Tell us at once if you begin work in any state listed in Item 3.C. of the Information Page.


What do Regulators want/need?1. Employers to provide coverage for the protection of

its workers2. Certification/Confirmation that State is a “covered

State” under any given policy.3. Is the employer complying with statutory

requirements and contractual obligations with the Carrier?

4. Protection of the State Trust Fund or Uninsured Employer Fund.


What are my Border States doing?1. Reciprocity Agreements in place?

2. Compliance with those agreements?

3. Level playing field for in state employers vs out of state employers.


According to Dictionary.com, the definition of Temporary is “that which is to last for a limited time, as a statute, or one which is limited in its operation for a particular period of time after its enactment. The opposite of perpetual.

According to Dictionary.com, the definition of Incidental is “happening as an occasional event, without regularity, casual, not of prime concerns, as in an incidental occurrence.

What does this mean?All of the states have a definition of their own to define “temporary” or

“incidental” workers.

Some have Reciprocity Agreements; others require certification and some have both reciprocity and certification requirements.


State Statutory Provisions Dealing With Out-of-State Employers Who Have Employees Temporarily Within A State’s Boundaries

States with Reciprocity Requirements

Workers Temporarily in the State Excluded if:

If the employer’s home state provides for reciprocal treatment of this state’s employees and employers.

CAMTGA (Construction only) NV, ME, OH, MD, SD, MS, UT

Some either in addition to, or in place of, a reciprocity provision specifically authorize the state workers compensation agency to enter into reciprocal agreements with other states. ID, ME, MN(?), MT and NM.

A number either in combination with a reciprocity provision or as a stand alone provision require the out-of-state employer who has an out-of-state employee filing a claim to obtain a certificate from the workers compensation agency of its home state certifying that the employer has workers compensation insurance that provides coverage for injuries occurring in the state of injury. Many of these provisions also specify that the obtaining of such a certification constitutes the appointment of the state of injury W.C. agency head or the Secretary of State to be that employer’s agent for service of process in the state of injury. States having certificate provisions include: CA, DE, ID, KY, ME, MD, MT, NV, PA, UT.

Some of the states that require the filing of a certificate in lieu of having 3A coverage in their state specifically provide that the 3C insurer is deemed to be authorized to write in their state for the purposes of handling the claim. A few provide a temporary authorization for self-insured out-of-state employers who provide proof of their financial ability to self-insure. The states that deem are: DE, ID, KY, PA.



States with Both Reciprocity and Certification Requirements

States having both the reciprocity and certification provisions are: CA, ME, MD, MT, NV and UT. Examples attached are CA, MD, and MS.

States Providing Special Treatment for Contractors

States having special treatment for contractors include: FL, GA, IL, MT, NM, NVFlorida and Illinois differ from the others in that they reference things like state class codes, rating rules

and manuals and treatment of payrolls.

States With Broad Language Requiring Coverage A

In addition to New York, states with broad language requiring Coverage A include New Hampshire and Iowa. Although Iowa further has jurisdictional language using “necessary minimum contacts”. New Mexico requires 3A coverage for contractors, but also seems to have a broad test if the employer has three or more employees working in the state even on a temporary basis. The Iowa and New Hampshire provisions are attached.

Interesting Provisions Not Previously Discussed

There are states that have provisions which may be of some interest which are discussed below. There also are a number of state provisions dealing with situations in which a worker may claim in more than one state that address whether claims may be filed in more than one jurisdiction, benefit levels, and exclusive remedy which will not be discussed because of our focus on coverage of workers temporarily in a state.

Border Wars: Out of State Coverage for Temporary WorkersState Statutory Provisions Dealing With Out-of-State Employers Who Have

Employees Temporarily Within A State’s Boundaries

Administrative Feasibility States

Arizona, Hawaii and Vermont have similar language that provides: if a worker hired outside of the state is injured while engaged in his employer’s business, and is entitled to compensation for the injury under the law of the state of hire, he may enforce against his employer his rights in this state, if they are such that they can reasonably be determined and dealt with by this workers compensation agency and the courts of this state.

States Having Statutory Tests

Maine has the most detailed statutory test. It provides that an employee employed in another state and his employer are exempt while the employee is temporarily in Maine doing work for his employer if:

1. the employee is not a resident of Maine and was not hired in Maine;2. the employer does not have a permanent place of business in Maine; and3. the employee’s presence in Maine for conducting employment activities doesn’t exceed any of the following periods:

a. five consecutive daysb. ten days in a 30 day periodc. thirty days in any 360 day period; and

The employer has furnished workers’ compensation coverage under the workers compensation law of the other state so as to cover the employee’s employment while working in Maine; and the other state has reciprocal provisions. The Maine provision is attached.

Connecticut states that employee does not include any person not a resident who is injured in the state in the course of employment unless he works for an employer having a place of employment or business facility in Connecticut at which the employee spends at least 50 percent of employment time or who works for an employer pursuant to an employment contract to be performed primarily in Connecticut.



Other Unique Provisions:

The District of Columbia provides if the employee and employer are nonresidents of the District and the contract of hire was entered into in another jurisdiction, they are exempt when the employee is temporarily or intermittently in the District doing work for the employer if the employer has workers compensation coverage in the other jurisdiction so as to cover the employee’s employment while in D.C.

Hawaii provides that any employer whose principal place of business is outside of Hawaii shall prior to commencement of employment within the state shall register with the director the employer’s name, approximate total wages to be paid, and dates of employment activity within the state. In addition, the employer shall file a prescribed notice of insurance.


What is happening in Massachusetts? Per the MA website, Out of State employers do not need to

buy a policy strictly for MA if the existing policy lists MA in Section 3.A of the policy’s Information Page. If MA is listed in 3.C, the policy is acceptable only if the Insurer verifies the coverage in MA. Furthermore, any notation in 3.C that “all states are covered” of “all states are covered except those listed in 3.A and the States of ND, OH, WA and WY” or something similar is acceptable only upon verification of coverage by the Insurer.


What is happening in Massachusetts? Stopping truckers at the border? “Sweeps” of Construction sites Turning away convention attendees? Casing the airports and train states? MA investigation process – some history Form 154


What are the goals for MA and others?1. Employers to provide coverage for the protection of

its workers2. Certification/Confirmation that State is a “covered

State” under any given policy.3. Is the employer complying with statutory

requirements and contractual obligations with the Carrier?



Sound familiar….. What do Regulators want/need?

1. Employers to provide coverage for the protection of its workers

2. Certification/Confirmation that State is a “covered State” under any given policy.

3. Is the employer complying with statutory requirements and contractual obligations with the Carrier?



Discussion with Ray Marchand, Chief Investigator with the Workers’ Compensation Board of the Commonwealth of MA

Form 154 revisited

Working together to bring employers into compliance


Other States struggling with the issues New York – public projects require coverage or certificate of

insurance. Do carriers uphold 3C coverage? Wisconsin does not recognize 3C coverage – defines

“operations” as $500 of payroll/calendar quarter or more than 3 people at any one time.

Pennsylvania – Ohio employer with PA resident employee working in PA and OH fund does not recognize the PA worker so PA Uninsured employer fund must pay.

Idaho – requires out of state employers to add ID under a 3A policy. Existing reciprocity agreements with border states are now exempting reciprocity for construction industry. No cross border workers without coverage in the state.

How many other States are struggling with this issue?


Is there a better way to present coverage? Why do we refer to it as 3A vs. 3C? Is there any coverage difference? Any workers’ claims not covered?


This is not just an insurance issue – how are self-insured employers impacted?

Are 3A/3C covered employers the real problem? Where do we go from here?

Define “temporary” worker? Revamp reciprocity agreements? National database for reporting all coverage?

Next Steps?

iaiabc annual convention 2010 border wars: the fight over coverage for out of state temporary...

Documents

state coverage

state temporary workers

covered state

state employers vs

employers home state

border states

state trust fund

state national database