Workers' Compensation Coverage Quiz

How does the state statute affect premium computation for self-insured employers?

• It increases premiums by 20%

• It authorizes experience and deductible credits

• It eliminates all premiums

• It requires a flat rate for all employers

Answer explanation

The state statute allows self-insured employers to benefit from experience and deductible credits, which can lower their overall costs, rather than increasing premiums or eliminating them.

What does the state do after the Trust Fund pays benefits for an insolvent employer?

• Seeks reimbursement from the errant employer

• Takes over the employer's operations

• Closes the employer's business

• Provides additional funds to the employer

Answer explanation

After the Trust Fund pays benefits for an insolvent employer, the state seeks reimbursement from the errant employer to recover the costs incurred, rather than taking over operations or providing additional funds.

What does the Massachusetts Workers’ Compensation Trust Fund do?

• Provides loans to insolvent employers

• Pays WC benefits when an employer fails to provide coverage

• Offers discounts on WC premiums

• Administers self-insurance programs

Answer explanation

The Massachusetts Workers’ Compensation Trust Fund pays WC benefits when an employer fails to provide coverage, ensuring that injured workers receive necessary support even if their employer is not insured.

What is an example of a company that might self-insure its WC liabilities?

• A small local bakery

• A new startup

• A multinational corporation

• A single-person consultancy

Answer explanation

A multinational corporation has the financial resources and risk management strategies to self-insure its workers' compensation liabilities, unlike smaller businesses that may not have the same capacity.

What happens if an employer's WC carrier becomes insolvent?

• The employer must pay all claims out of pocket

• The Trust Fund pays benefits and seeks reimbursement

• The employees receive no benefits

• The state takes over the employer's business

Answer explanation

If an employer's WC carrier becomes insolvent, the Trust Fund steps in to pay benefits to employees and will seek reimbursement from the employer. This ensures that employees still receive their entitled benefits.

What does the term 'first-dollar loss costs' refer to in self-insurance?

• The initial costs covered by the insurer

• The costs covered by employees

• The costs covered by the employer from the first dollar

• The costs covered by the state

Answer explanation

The term 'first-dollar loss costs' refers to the expenses that the employer must cover from the very first dollar, without any deductible. This means the employer is responsible for all initial costs incurred.

Which section of the R.L. c. 152 covers the Assigned Risk Plan?

• § 25A–U

• § 65A–D, G–M, O

• § 65

• § 53A(5)

Answer explanation

The Assigned Risk Plan is specifically covered under § 65A–D, G–M, O of R.L. c. 152, making this the correct choice. Other sections do not pertain to the Assigned Risk Plan.

What is a requirement for an employer to be part of a large-deductible program?

• Having a small workforce

• Being a non-profit

• Being a new business

• Retaining a portion of the risk

Answer explanation

To be part of a large-deductible program, an employer must retain a portion of the risk. This means they agree to cover some of the costs before insurance kicks in, which is essential for such programs.

Which section of the R.L. c. 152 discusses differences in premium computation?

• § 65

• § 65A–D, G–M, O

• § 53A(5)

• § 25A–U

Answer explanation

§ 53A(5) specifically addresses differences in premium computation, making it the correct choice. The other sections do not pertain to this topic.

What is the purpose of the state's assigned risk plan?

• To eliminate the need for self-insurance

• To offer discounts on WC premiums for large employers

• To ensure employers unable to obtain voluntary WC coverage can secure statutory benefits

• To provide voluntary WC coverage to all employers

Answer explanation

The state's assigned risk plan is designed to ensure that employers who cannot obtain voluntary workers' compensation (WC) coverage can still secure the statutory benefits required by law.