FAQS

Q. WHAT IS THE ASSIGNED RISK PLAN?

Q. WHO IS ELIGIBLE FOR COVERAGE IN THE PLAN?

Q. WHAT CONSTITUTES A PROPER DECLINATION STATEMENT?

Q. DO MINIMUM PREMIUMS INCLUDE THE EXPENSE CONSTANT?

Q. WHAT IS THE EXPENSE CONSTANT IN THE ASSIGNED RISK PLAN?

Q. ARE PREMIUM DISCOUNTS AVAILABLE?

Q. WHAT IS THE MERIT RATING PLAN?

Q. WHAT DOES IT COST TO INCREASE AN EMPLOYER'S LIABILITY LIMITS?

Q. HOW DO EXPERIENCE MODS AFFECT PREMIUM?

Q. HOW DO I REQUEST A LOSS RUN FOR PLAN POLICIES?

Q. WHAT IS A MCPAP FACTOR AND HOW DOES AN EMPLOYER QUALIFY?

Q. WHY DOES THE EMPLOYER NEED TO REPORT THEIR FEDERAL EMPLOYER ID# (FEIN) AND UNEMPLOYMENT ACCOUNT NUMBER?

Q. ARE WE ABLE TO SELECT OUR SERVICING CARRIER?

Q. HOW DO I DETERMINE INDEPENDENT CONTRACTOR VS EMPLOYEE STATUS IN THE CONSTRUCTION INDUSTRY?

Q. WHAT ABOUT MINNESOTA WORKERS' COMPENSATION BENEFITS PAYABLE OUTSIDE MINNESOTA?

Q. IF PAYING WITH AN AGENT CHECK - WHAT YOU SHOULD KNOW

Q. ARE AGENTS ALLOWED TO ISSUE CERTIFICATES OF INSURANCE IN THE MWCARP?

Q. WHAT IF THE RENEWAL PREMIUM IS NOT RECEIVED BY THE SERVICING CARRIER BY THE EFFECTIVE DATE?

Q. WHAT TYPES OF PAYMENT PLANS ARE AVAILABLE?

Q. WHAT ARE THE GENERAL CANCELLATION AND REINSTATEMENT PROCEDURES?


Q. WHAT IS THE ASSIGNED RISK PLAN?

The Assigned Risk Plan or "the Plan" provides workers' compensation insurance to employers who are unable to obtain coverage in the voluntary market.

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Q. WHO IS ELIGIBLE FOR COVERAGE IN THE PLAN?

Minnesota Assigned Risk coverage is only available to employers who have been declined coverage in the voluntary market by an insurance company who is licensed to write workers' compensation insurance in Minnesota.

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Q. WHAT CONSTITUTES A PROPER DECLINATION STATEMENT?

Declinations must be obtained from insurance companies that are licensed to write workers' compensation insurance in Minnesota. Employers who have had coverage in the voluntary market must be declined coverage by their current/latest insurance company unless a non-renewal or cancellation notice has already been filed with the MWCIA. It is improper for an employer to cancel their existing coverage to voluntarily place their business in the Plan.

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Q. DO MINIMUM PREMIUMS INCLUDE THE EXPENSE CONSTANT?

Yes, minimum premiums in the Assigned Risk Plan include the expense constant but it is important to calculate the employer's actual premium to make sure the minimum premium applies.

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Q. WHAT IS THE EXPENSE CONSTANT IN THE ASSIGNED RISK PLAN?

The Plan charges a $180 expense constant.

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Q. ARE PREMIUM DISCOUNTS AVAILABLE?

No. This program is not available in the Plan.

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Q. WHAT IS THE MERIT RATING PLAN?

The Merit Rating Plan is unique to the Plan. A Plan policyholder may be eligible for a credit or debit depending on their lost time claims. For more information, click here.

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Q. WHAT DOES IT COST TO INCREASE AN EMPLOYER'S LIABILITY LIMITS?

Increased limits of 500/500/500 cost 1% of the unmodified premium subject to a minimum charge of $50. A 1mil/1mil/1million increase costs 5% of the unmodified premium subject to a minimum charge of $150.

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Q. HOW DO EXPERIENCE MODS AFFECT PREMIUM?

Credit factors will decrease an employer's premium and debit factors will increase their premium.

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Q. HOW DO I REQUEST A LOSS RUN FOR PLAN POLICIES?

Loss Runs may be obtained by contacting your servicing carrier.

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Q. WHAT IS A MCPAP FACTOR AND HOW DOES AN EMPLOYER QUALIFY?

The Minnesota Contractors' Premium Adjustment Program (MCPAP) is a special credit-only program that was created for qualifying employers in the construction industry. Eligible employers can receive MCPAP factors that provide up to a 25% maximum credit that is applied after the experience mod when calculating the employer's premium.

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Q. WHY DOES THE EMPLOYER NEED TO REPORT THEIR FEDERAL EMPLOYER ID# (FEIN) AND UNEMPLOYMENT ACCOUNT NUMBER?

These employer identification numbers are required in Minnesota for proof of coverage purposes. It is important that insurance agents collect these two numbers each and every time they complete an application for coverage with the Plan.

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Q. ARE WE ABLE TO SELECT OUR SERVICING CARRIER?

No. Your application will be assigned to a servicing carrier on a random basis.

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Q. HOW DO I DETERMINE INDEPENDENT CONTRACTOR VS EMPLOYEE STATUS IN THE CONSTRUCTION INDUSTRY?

Independent contractors doing commercial or residential building construction or improvements in the public or private sector are employees unless all of the following criteria are met.

Independent contractors doing commercial or residential building construction or improvements in the public or private sector are employees unless all of the following criteria are met.

1. The independent contractor maintains a separate business with the independent contractor's own office, equipment, materials, and other facilities.

2. the independent contractor holds or has applied for a federal employer identification number (FEIN); or has filed business or self-employment income tax returns with the Federal Internal Revenue Service based on that work or service in the previous year;

3. the independent contractor operates under contracts to perform specific services or work for specific amounts of money and under which the independent contractor controls the means of performing the services or work;

4. the independent contractor incurs the main expenses related to the service or work that the independent contractor performs under contract;

5. the independent contractor is responsible for the satisfactory completion of work or services that the independent contractor contract to perform and is liable for a failure to complete the work or service;

6. the independent contractor receives compensation for work or service performed under a contract on a commission or per job or competitive bid basis and not on any other basis;

7. the independent contractor may realize a profit or suffer a loss under contracts to perform work or service;

8. the independent contractor has continuing or recurring business liabilities or obligations; and

9. the success or failure of the independent contractor's business depends on the relationship of business receipts to expenditures.

If all of the above criteria are not met, the independent contractor will be considered an employee and premium will be charged. A statement that all of the above criteria are met is not sufficient. You will need to provide actual documentation that the criteria are met. Policyholders may contact the company servicing their policy for an early evaluation as to whether the above criteria are satisfied; otherwise, the evaluation will be done at audit following policy expiration.

MERIT RATING PLAN
NON-EXPERIENCE RATED EMPLOYERS
Non-experience rated employers will receive a credit or debit depending on:
1. The number of years they have been insured with the Assigned Risk Plan, and 2. The number of lost time claims they have had within the applicable rating period.

Depending on the above criteria, the following credits/debits will apply:
A. Non-experience rated employers who have been insured with the Assigned Risk Plan for the last three consecutive years will be subject to the following schedule based on lost time claims during the applicable rating period:
0 lost time claims - 33% credit
1 lost time claim - no creditor debit
2 or more lost time claims - 10% debit

B. Non-experience rated employers who have not been insured with the Assigned Risk Plan for the last three consecutive years will be subject to the following schedule based on lost time claims during the applicable rating period: 0 lost time claims - 10% credit
1 lost time claim - no creditor debit
2 or more lost time claims - 10% debit

EXPERIENCE RATED EMPLOYERS
Will not be subject to Merit Rating

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Q. WHAT ABOUT MINNESOTA WORKERS' COMPENSATION BENEFITS PAYABLE OUTSIDE MINNESOTA?

 

WARNING NOTICE:

REGARDING WORKERS’ COMPENSATION BENEFITS PAYABLE
OUTSIDE OF MINNESOTA

Workers’ compensation insurance policies issued by the Minnesota Workers’ Compensation Assigned Risk Plan DO NOT provide coverage for workers’ compensation benefits to injured employees which you are obligated to provide under the workers’ compensation laws of any other state.

This policy only covers lawful claims for workers’ compensation benefits allowed under Minnesota law. This policy DOES NOT provide coverage for your workers’ compensation liability to injured employees that work outside of Minnesota, and who are not entitled to receive benefits under Minnesota’s workers’ compensation law.

This policy also DOES NOT cover your workers’ compensation liability under another state’s workers’ compensation law if your injured employee elects to receive benefits under that other state’s workers’ compensation law in lieu of receiving workers’ compensation benefits payable under Minnesota law.

This policy DOES provide coverage under Minnesota’s workers’ compensation law for benefits to your injured employees who regularly perform their primary duties of employment within Minnesota but who are injured outside of this state, as required by Minn. Stat. §176.041, subd. 2-4 (2009).

Coverage for out of state employees can be complicated. If you do business outside Minnesota, employ persons that perform work outside Minnesota or have any question regarding what benefits are provided to your employees by Minnesota’s workers’ compensation law, you should consult your insurance agent or other knowledgeable professionals regarding your obligations in this area.

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Q. IF PAYING WITH AN AGENT CHECK - WHAT YOU SHOULD KNOW
Payment submitted with an application should be made by the insured to the Assigned Risk Plan.
If payment is made by an agent, the agent understands that it will be solely responsible for reimbursement
from the insured, and will have no right to cancel the policy for nonpayment by the insured, unless cancellation is agreed to by the insured. All premium refunds are issued to the insured.

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Q. ARE AGENTS ALLOWED TO ISSUE CERTIFICATES OF INSURANCE IN THE MWCARP?

Insurance agencies are not authorized to issue a Certificate of Insurance on behalf of the
MWCARP in Minnesota. This activity is not in compliance with the operation of the MWCARP.
On page 4 of the Application for Workers' Compensation Insurance, number 7, under
Application Rules and Procedures, it states
: "Agents are not agents of the Assigned Risk Plan
and cannot issue certificates of insurance or bind coverage".
Your agency should request any Certificate that is needed for policies written through the MWCARP
from the servicing carrier to whom the coverage has been assigned. These Certificates must be
issued by the servicing carrier.

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Q. WHAT IF THE RENEWAL PREMIUM IS NOT RECEIVED BY THE SERVICING CARRIER BY THE EFFECTIVE DATE?

The Servicing Carrier will not issue the renewal policy if the renewal premium down
payment is not received by the renewal policy’s effective date. However, the Servicing
Carrier will make an exception if the renewal premium down payment is postmarked on
or before the renewal policy’s effective date and is received within seven (7) days after
the effective date.

If the renewal premium down payment is received more than seven (7) days after the
effective date, but not more than twenty (20) days after the effective date; then the
Servicing Carrier shall issue a new policy to the employer that will be effective the day
after the payment is received. If payment is received more than twenty days after the
renewal effective date the employer will need to reapply for coverage in the MWCARP
by submitting a new application.

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Q. WHAT TYPES OF PAYMENT PLANS ARE AVAILABLE?

The payment plans available to policyholders in the MWCARP are as follows:

Estimated Annual Premium (EAP)
• EAP less than $2,000 (100% down payment)
• EAP $2,000 - $9,999 (50% down payment with 3 equal quarterly installments)
• EAP $10,000 or more (35% down payment with 8 equal monthly installments)

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Q. WHAT ARE THE GENERAL CANCELLATION AND REINSTATEMENT PROCEDURES?

A policy will be cancelled with notice for the following reasons:

• Non-payment of premium with a 30-day notice;
• Refusal to permit completion of payroll audit with a 60-day notice;
• Other reasons approved by Commissioner and/or Plan Administrator with a 60-day notice;
• Any time at the policyholder’s request. However, the Servicing Carrier
will not honor requests to cancel policies before the date of request, except
in cases where there is duplicate coverage.

The Servicing Carrier will reinstate a policy without a lapse of coverage if the basis for
cancellation is removed before the cancellation is to take effect. However, if the basis
for cancellation is removed after the cancellation has taken effect, the employer will need
to reapply for coverage in the MWCARP by submitting a new application.

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