The Massachusetts Workers’ Compensation system includes two distinct statutory safety nets designed to ensure benefit continuity for injured workers: the Massachusetts Insurers Insolvency Fund (Insolvency Fund) and the Workers’ Compensation Trust Fund (Trust Fund). In cases involving uninsured employers and insolvent insurers, disputes may arise over which fund must assume responsibility for ongoing benefit payments. A recent decision by a Massachusetts court addresses this complex statutory overlap and clarifies the obligations of the Trust Fund when an insurer is declared insolvent after benefits have already been paid. If you were hurt while working, it is important to understand your rights, and you should talk to a Massachusetts workers’ compensation attorney.
Factual Background and Procedural History
It is reported that the plaintiff, a statutory insolvency fund responsible for claims arising from insolvent insurers, made benefit payments to injured workers whose employers were later revealed to be uninsured at the time of injury. These payments were made after the plaintiff stepped in following insurer insolvencies and sought reimbursement from the Workers’ Compensation Trust Fund under G.L. c. 152, § 65(2)(e), which authorizes the Fund to reimburse insurers for claims involving uninsured employers.
It is alleged that the Trust Fund denied the reimbursement requests on the basis that the Insolvency Fund does not meet the statutory definition of an “insurer” entitled to recover under § 65(2)(e). The Trust Fund contended that the Legislature intended the reimbursement provision to apply only to active insurers that voluntarily pay benefits, not to a fund acting in the capacity of a failed insurer’s successor. The plaintiff filed suit in the Superior Court, seeking declaratory relief to compel reimbursement. The trial court ruled in favor of the Trust Fund, and the plaintiff appealed. Continue reading →