Employers must provide workers' compensation insurance defined in the Montana Workers' Compensation and Occupational Disease Acts. Insurance may be purchased from insurers that are authorized in Montana, and have workers' compensation included in their authority. Or, the department may grant an employer the ability to self-insure its workers' compensation liabilities if it has the requisite financial ability to pay workers' compensation indemnity and medical benefits.
CHANGES IN MONTANA’S ASSESSMENT RATES
Effective July 1, 2016
MONTANA WORKERS’ COMPENSATION
PREMIUM SURCHARGE RATES
The 2015 Montana legislature passed SB 259 which was signed into law by the Governor on April 29, 2015. This legislation split the prior Workers’ Compensation Administration Fund assessment into two assessment rates:
- The Workers’ Compensation Administration Fund Assessment capped at up to 4% of benefits paid in the preceding year, and
- New Fund and Rate---The Occupational Safety and Health Administration Fund Assessment capped at up to 2% of benefits paid in the preceding year. This assessment will be effective for the FY2017 assessment surcharge.
Remember, the surcharge amount must be stated as a separate cost on the insured employer’s policy or on a separate document submitted to the insured employer. This notification is to help you prepare your billing systems to accommodate this change.
All Plan 2 and Plan 3-(Montana State Fund) carriers writing Workers’ Compensation in Montana need to collect from each policyholder enrolled the workers' compensation regulatory assessment surcharge established by the Department of Labor.
Premium Surcharge rates Effective July 1, 2016 (FY2017)
Administration Fund Premium Surcharge Rate: 0.015592
Stay at Work/Return to Work Fund Premium Surcharge Rate: 0.000000
Subsequent Injury Fund Premium Surcharge Rate: 0.006186
Occupational Safety & Health Administration Fund Premium Surcharge Rate: 0.007156
The surcharge rates will change for each subsequent fiscal year. Rates will be calculated each April and will be effective on July 1.
Each insurer providing workers' compensation insurance shall collect from its policyholders the surcharge amount at the same time and in the same manner that the premium for the coverage is collected. The surcharge collected should be the appropriate percentage of premium remitted to the carrier in that quarter. The surcharge amount must be stated as a separate cost on an insured employer's policy or on a separate document submitted to the insured employer. The administration fund premium surcharge must be identified as the "workers' compensation regulatory assessment surcharge”, the subsequent injury fund premium surcharge must be identified as the “workers’ compensation subsequent injury fund surcharge” and the occupational safety and health premium surcharge must be identified as the “occupational safety and health regulatory assessment surcharge”.
Each insurer shall collect the premium surcharge levied against every employer that it insures. The premium surcharge must be paid whenever the employer pays a premium to the insurer. Terrorism premium should be included in the premium collected. Each insurer shall pay to the department all money collected as a premium surcharge within 20 days of the end of the calendar quarter in which the money was collected. If an insurer fails to timely pay to the department the premium surcharge collected, the department may impose on the insurer administrative fines of $500 for the administration fund, $500 for the occupational safety & health fund and $100 for subsequent injury fund plus interest on the delinquent amount at the annual interest rate of 12%.
Each insurer shall maintain reasonable records showing the total amount of premium surcharge billed to its policyholders and the total amount of premium surcharge actually collected. The premium surcharge must be excluded from the definition of premiums for all purposes.
There will not be a surcharge rate for the Stay-At-Work/Return-To-Work Assistance Fund established in 39-71-1050 for FY2017.
If there is a refund on any policy going forward, insurers may address over-collections or overpayments of premium surcharge in the following manner, outlined in Administrative Rules of Montana (ARM) 24.29.956 (4) b: If a surcharge remittance from an insurer to the department is later determined to include an overpayment, the insurer may deduct the amount overpaid from the next surcharge remittance due from the insurer to the department. The insurer shall maintain records documenting any surcharge amounts refunded to its policyholders.
If you are submitting payment for several companies, please do not deduct negative premium from one company for another company. Please do not report a negative figure for premium and/or surcharge amounts. Make adjustments internally and carry the credit forward on future reports. Report -0- on the surcharge remittal form and submit backup documentation supporting the credit.
You may visit our website at http://erd.dli.mt.gov/workers-comp-regulations/insurance-compliance/work-comp-surcharges.html to review the rates and download the surcharge form for future filings.
If there are any questions about how to report premium and calculate surcharge rates, please contact either Frank Gonzalez firstname.lastname@example.org or Adrianne McLean at email@example.com.
Workers' Compensation Regulation Bureau
Employment Relations Division
PO Box 8011
Helena, MT 59604-8011