Massachusetts Workers’ Compensation Reviewing Board Determines Whether Excess Insurance Carrier Or Trust Fund Pays for Total and Permanent Benefits

As an injured Massachusetts worker, you want to ensure that all your benefits get paid by the entity or entities responsible for paying them. The Reviewing Board decision published this month, John Pastore v. Polaroid Corp., Inc. (Bd. Nos. 004718-89, 029283-13, 012201-13), dissects an agreement between a self-insured employer and an excess insurance carrier regarding the § 34A benefits and § 34B cost of living adjustments (COLA) of an injured employee. The worker in this case was injured in an industrial accident in 1983. His employer was a licensed self-insurer, obligated to follow the statutory requirements that come with being its own workers’ compensation insurance carrier. These included purchasing extra insurance as back up to help meet their workers’ compensation obligations through a “reinsurer.”

After the injury, the employer agreed to accept the claim and pay the weekly benefit, eventually agreeing to pay for the permanent and total incapacity (§ 34A) benefits at around $297.85 a week. The reinsurance company had a $250,000 policy, which the employer tried to utilize. The reinsurer initially denied the claim, since the employer voluntarily placed the employee on the § 34A benefits. Eventually, the employer and the re-insurer agreed to a settlement of $155,000 to reimburse the employer’s obligation to the injured worker. Neither the employee nor the Dept. of Industrial Accidents was made aware that this settlement occurred in 1998. Both became aware of this agreement after the employer’s bankruptcy action and exhaustion of bond set aside for benefits payment. The employee then filed suit for payment to resume.

At the hearing, the Administrative Law Judge (ALJ) held that the employee was now “uninsured” and that the Workers’ Compensation Trust Fund (WCTF) was obligated to pay the benefits. The WCTF, on appeal, disagreed with the assessment, arguing that the reinsurer was the entity obligated to pay the benefits to the injured employee. The Reviewing Board agreed, reversing the prior decision and directing the re-insurer to pay the benefits. In its analysis, the Board first pointed out that the WCTF was not created until after the worker was injured, and the injured worker would not be considered to be “uninsured” because the employer was a self-insurer. The Board then pointed out the difference between standard insurance agreements for settlement and the obligations of workers’ compensation insurers under Massachusetts law. Self-insurers are regulated by the Department of Industrial Accidents, rather than the Commissioner of Insurance. Workers’ compensation insurers are all beholden to the intent of the Workers’ Compensation Act, which was designed to protect injured workers. The Board found that the agreement reached between the now-bankrupt employer and the re-insurer was valid and that the re-insurer was responsible for both the § 34A and the COLA benefits.

The Massachusetts workers’ compensation attorneys at the Law Office of James K. Meehan understand that your family and you depend on workers’ compensation benefits, and any break in benefits can be devastating. Our firm will aggressively pursue all of the benefits you are entitled to receive. For a consultation, contact our office at 508.822.6600.

More Blog Posts:

Massachusetts Appeals Court Reviews Medical Malpractice Notice, Massachusetts Injury Lawyers Blog, August 4, 2016
Massachusetts Appeals Court Reverses Premises Liability Case In Favor of Injured Customer, Massachusetts Injury Lawyers Blog, July 20, 2016